Like it or not, I've often thought that porn is a leading indicator of internet trends, and the overall trend in porn seems to be towards low-budget, low-quality disposable stuff designed for a quick buck with no long tail (yeah, that sounds so wrong in this context...). It's also interesting that the industry has gone from being sleazy and underground to professionalized, corporate and semi-respectable - they hold conferences, award shows and so on. But the market is fragmenting so fast that I wonder whether it can properly sustain itself as a distinct industry much longer.
The porn biz never embraced DRM, but that decision has also meant giving up long-term revenue as porn is avidly pirated. Also, the trend towards reality TV, widespread availability of webcams, and IDIY (Internet amateurs) are moving inexorably towards the death of the porn star and porn studio, to be replaced by camsluts; there are a lot of exhibitionists out there and distribution is no longer an issue, especially since porn does not particularly depend on long-form productions like movies do. a 'hot' video lasting 5 minutes is way more desirable to consumers than a 'lukewarm' one lasting an hour.
I don't keep up with the adult web very much but my impression is that while established pay sites are holding their own for the time being, there's a rough 3 way split: 1. mini-studios that do their own video for members, 2. mini distributors that buy in most of their content from model/photographers and resell it, and 3. those who give it away but use the porn as a draw to affiliate programs for sex toys, underwear etc., or sex-dating services. Conversely, I think there are sex-dating services that are free and use the traffic to market porn and/or sex toys.
There's a lesson her for HN readers. What if, instead of consumers finding web apps they like and paying for them (or generating enough traffic to monetize ads), app development tools become so flexible and streamlined that they become consumer-facing, and the majority of people are happy to create their own mashups? That vision is years away now, but ten years ago it wasn't obvious how much havoc cheap digital cameras and streaming video were going to wreak on the porn business as they are doing now.