Thanks to an old friend and alert reader, I am this morning pointing you to the Marginal Revolution blog, in which George Mason economics professor Tyler Cowen wonders a bit about the porn industry. I don’t want to pick on Professor Cowen unduly, inasmuch as he’s asked the question politely and has attracted a lengthy comment thread that is mostly free of the usual anti-porn ignorance and bigotry (although the porn-is-an-addiction idiocy rears its stupid-head, and commenter Clayton Cramer does drop in to trumpet his longstanding kink-is-evil bigotry — but I repeat myself). However, Professor Cowen did disclaim having much knowledge of the porn industry, and he expressly invited his readers to call him clueless. With due respect, I’ll bite.

Professor Cowen, your post was a little bit clueless. I left a comment there, but it’s worth more discussion here:

[post title] Why Is Pornography Scarce?

Er, it’s not. Not even in the sense in which Econ professors use the word. It’s a glut, a golconda, an exploding cornucopia, it’s everywhere, it’s easy to find, it’s cheap, it might as well be free, it’s easy to get and cheap to store and anybody who wants any and isn’t terminally lazy or stupid already has lots, more than they can ever hope to look at. Unless they’ve recently suffered a house fire or a porn-hostile woman.

So, what’s actually scarce? New porn, fresh porn, different porn. It’s scarce because it doesn’t stay new for long, it’s scarce because ninety percent of everything is crap and so lots of even fresh-made porn isn’t fresh, it’s scarce because (short of stacking fetishes until you’ve got one-legged panty-sniffing midget girls mud wrestling with shaved sheep) it’s tough to make porn that’s new and different. “New and fresh” requires art, craft, skill, all the other things that are in short supply in any industry. And, oddly, unit volumes are so low in porn that art, craft, and skill tend not to be rewarded.

After noting with interest that Playboy is selling its entire set of back issues on disk for about six hundred bucks, Professor Cowen writes:

Have you noticed that storage is really, really cheap these days? Have you studied the durable goods monopoly problem? Once you’ve accumulated a stock of durable material, at some point you will sell off successive units very very cheaply. Have you noticed that costs of electronic reproduction — call it marginal cost — are really, really low these days? Have you noticed there is a massive stock of accumulated pornographic images?

…

Call me clueless, as I have very little direct knowledge of pornography. But I don’t understand why buyers demand such a regular flow of material. Why don’t they just buy a single dense disc of images and keep themselves, um…busy…for many years? I believe also that fetishes are fairly stable and predictable. You don’t need to see “the new porn” to know what you will want to get off on.

First of all, Playboy is unique in the industry. Most porn sellers don’t offer “a single dense disc of images”, or when they do, they don’t price it attractively. In my comment at Marginal Revolution, I speculated as to some of the reasons for this apparent market failure.

Second of all, there is some fetish drift. People’s tastes do change over time. Guys don’t view pornography so much to see the movie on the screen per se. Rather, they view it in order to use the images on the screen to stimulate the somewhat different movies in their own heads. Those movies grow, and change, and shift, over time. Some of the change is stimulated by the porn that’s been seen lately. But lots of the change happens because of what’s happened in the guy’s sexual life, or the new woman he’s been lusting after, or a random comment the hot co-worker made, or any of a thousand other non-porn stimuli. As the internal movies change, most guys find that the external movies need to change also.

But the real confusion comes next, when Cowen reveals that he’s really only talking about a tiny fraction of the overall porn market:

As I observe the sector, buyers cough up new money all the time, and they buy relatively small units of output, and at relatively high prices.

Please “splain” it to me, as they say…

Um, “as I observe the sector”? I know it wasn’t intended to be, but that’s side-splittingly funny.

The “porn sector” is notoriously difficult to observe. Nobody even knows to within an order of magnitude what the gross revenues of the sector might be.

But that’s not what’s so funny. What’s funny is an Econ professor confusing the tiny “observable” fraction of a huge and largely furtive market, with the market itself.

The people who buy new porn are relatively visible. They have credit cards, they make people semi-rich, you can observe the money even if you can’t see the transactions. Porn marketing — which is splashy and observable — is directed at them.

The people who buy “a single dense disc of images” — or who would, if they could find one on the market — aren’t as observable because they account for fewer transactions and less gross money.

And the vast, huge, horde of people who don’t buy porn at all — but who use porn, collect porn, save porn, horde porn, most of which they get for free over the internet — they are part of the market too. Hell, they define the market. True, they are mostly paying a price of “zero” (or, rather, zero-plus, the “plus” being the not inconsiderable cost of a good internet connection), but they are still market participants. To be honest, they are the eight-thousand-pound gorillas of this marketplace, stomping around crushing the dreams of the naive newbie pornographers who think “hey, everybody loves porn, how could I not get rich?”

So, to sum up, Professor Cowen looks at a tiny fraction of the people in the porn marketplace, notes that it’s the most visible and most lucrative set of porn consumers (the part of the market he can see), and wonders why that tiny subset with a market preference for fresh porn in low volume isn’t buying stale porn in high volume. And the answer, of course, is that people who want stale porn in high volume — and there are lots of ’em — can already get it in job lots, for a price of cheap-to-free.

Postscript: To the folks who are happy with their massive collections of older porn (whether they collected it the hard way back in the day, bought it on “one dense disk”, or, like most folks these days, hoovered it up off the internet), it’s often a mystery “why anybody pays for porn”. In Professor Cowen’s comments that question came up, and to answer it, several folks trotted out that tired old war-whore, the “porn is an addiction” theory. That deserves its own rant, but I did point out over there, and want to say here, that it’s a silly explanation for why people are willing to pay money for new and fresh (and scarce) porn. Wanting fresh porn, and paying big bucks for it, when you could have stale porn for free, is no more a sign of addiction than wanting fresh food, and paying big bucks for it, when you could have canned food for pennies from Wal-Mart. Are people who pay big bucks for greenhouse-grown vine-ripened tomatoes in January “addicted to food?” Naw, they just like fresh tomatoes, and they think Del Monte canned stewed tomatoes suck, even priced at three bucks a case at Costco. They have what the economists call a market preference, not an addiction.