As Moxie usually points out, what's killing the market is lacklustre business practices. He's fond of saying that a proper management team would double or triple (or more) the earnings of most porn companies...and I think he's 100% correct in his assertion.

Let's take marketing, for example...how many porn studios do you know that run an opt-in email list with a regular monthly newsletter? How many have their own forum where they can interact with the fans and get valuable feedback on their products? How many post censored previews or behind-the-scenes interviews on YouTube? How many have an official studio MySpace page? How many run retailer incentive programmes? How many run proof-of-purchase or coupon incentives for loyal customers? Downloadable .pdf magazine/brochure? On-site trailers (either downloadable or Flash player)? Competitions and prize draws? Free desktop wallpapers and other such stuff? You don't have to be able to get your contact girl on Howard Stern to be able to successfully market your brand.

Moxie has already covered the fundamental business failings, and I have also discussed the fact that the industry is doing nothing to combat online piracy (sometimes all it takes is a simple email with words like 'DMCA' and 'Name Server' to get your stuff removed and prevent further uploads of your material to piracy forums).

Most porn studios are feeling the pinch due to lazyitis, in my humble opinion. Time to either get good or get gone.