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Behind the Scenes: The Economics of Cam Sites [SpankChain]

The porn industry has undergone several revolutions, and it’s now ripe for one again. Since the advent of the Internet, the porn industry has dramatically shifted the way it produces and distributes content. Then, porn was an estimated $50 billion hard-copy magazine, newspaper, and DVD industry. Now, with widespread free access and rampant piracy, the old kingdom has tumbled down. In its place, the number of adult sites have exploded online, and among them, camsites have emerged as a new model for cashing in revenue.

What started as a niche business in the adult entertainment industry, “camming,” or the streaming of live model performances, raked in $1 billion in 2013 and is continuing to grow, according to the New York Times. It’s become “the engine of the porn industry,” Alec Helmy, the publisher of Xbiz, a sex-trade industry journal, told the LA Times.

But along with new business opportunities come new challenges. Adult entertainment sites face strict government regulations on one side and a lack of support from traditional payment companies like Visa and American Express on the other. Squeezed between both pressures, cam sites accrue high operational costs that trickle down to the models who work for them. This results in all kinds of economic inequality, which in turn perpetuates other imbalances of power. We are looking to change this.

However, if you want to understand how money flows through the industry and results in low cuts for content producers, we must first understand how cam sites work.

How cam sites work:

Unlike pre-recorded films, camming isn’t susceptible to piracy because its value proposition is its personalization and interactivity. Models give live performances through webcams, and clients pay for varying degrees of intimacy. Private showings cost the most; shared viewing lowers fees. Many sites also use a tip-based model, where viewers can stream content for free but pay tips to instruct the model to perf...

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