June 8, 1999    
 
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Telegraph. Telephone. Teligent.

Management, Strategies, Trends
 

GDP: the sex sector

By Richard C. Morais

Below is a rough estimate of the world's legal porn business. The key word: legal. Economists increasingly talk of a "sex sector": a massive, broadly defined and mostly underground economy that includes activities like illegal prostitution. Prostitution, according to new European Union reporting rules, must now be included in national statistics. The Centre for Economics & Business Research Ltd., a London-based think tank, figures illegal prostitution is a $2-billion-a-year business in Britain alone, averaging $16,500 a year in tax-free income for 115,000 prostitutes. Since the cost of inputs is minuscule, this sum drops to the bottom line of national income statistics.

The global playground


Market segment 1999 world sales* ($bil)
Adult videos $20.0
Sex clubs 5.0 1
Magazines 7.5 2
Phone sex 4.5
Escort services 11.0
Cable/satellite/
pay-per-view TV
2.5 3
CD-ROM/DVD-ROM 1.5
Internet (sales and memberships) 1.5
Novelties 1.0
Others 1.5
Total $ 56 Billion 4
*Estimated. †Retail sales. 1 Majority accounted for by approximately 2,500 U.S. strip clubs. 2 Includes Playboy, Penthouse, Hustler and numerous other titles more explicit than Hustler. 3Includes The Playboy Channel, Spice, Adam & Eve and hotel pay-per-view. 4Illicit markets not included.

Source: Private Media Group, Inc.

Lin Lean Lim of the International Labor Office in Geneva points out in her book, The Sex Sector, that businesses (like tour operators and go-go bars) feeding off the prostitutes make the real money. Add such service providers to the pot, and the sex sector is a global economic force that's probably in excess of a half-trillion dollars. Says Lim: "Like it or not, legal or not, the sex sector is an economic activity of such massive proportions in many countries it must be measured in terms of GDP."

Consider Thailand, the fleshpot that attracts some 500,000 sex tourists every year. A study by a Thai university estimated the sex sector at around $25 billion, or 12% of the country's gross domestic product. Some 4.6 million Thai men use an estimated 700,000 prostitutes annually, a third of whom are minors and children. Consider this decadent twist: A chief surgeon in Bangkok, according to press accounts, claimed Thailand had become the preeminent country in the world for sex changes, with 35,000 transsexuals on surgeons' waiting lists. The doctor argued the sex change business, if properly developed, could help Thailand's economic recovery.

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June 14, 1999
Table of Contents:
Forbes

INVESTMENT GUIDE:
Cover Stories
Money and marriage

Married, with benefits

Couples' therapy

Kids on the payroll

The macho jinx

Mine and thine

Till death do us part

How much insurance?

The wired pair

Flings
Swindles of the year

Innkeeping fact and fantasy

Stocks & Bonds
To the lifeboats!

The ultimate buy-and-hold

Bond trading for the masses

Monkey business

Natural selection

Cyberinvestor
Beating the IRS in cyberspace

E-crash!

E-hardball

Investigate, invest

Estate Planning
Dear John

Death traps

Making teachers smile

Hard Assets
Looking for the next Van Gogh

Schoolboy dreams

Real Estate
Hold off buying a bigger house

REITlets

Trading places

Family Finance
House fight

But she promised me the Limoges

Global Investor
Europe, restructured

Foreign intrigue

Funds
Buy a loser

Crash taxes

Taxing Matters
Final deductions

From acorns, mighty oaks

MANAGEMENT, STRATEGIES, TRENDS:
Wall Street
Libertarian for all

Amazon.chicken?

Companies
Cereal seller

Stocks
Doctor, please

People
Who you gonna call?

Trends
Safety down under

Companies
Plunderkind

High wireless act

Bowing to Jack Welch

It's raining money

From CIO to CEO

Gap attack

Clients to die for

Cool down!

Marketing
Madison Ave. bound?

Smut stocks

INTERNATIONAL:
Wasteland no more

Dutch colonizers

Of cars and lemons

ENTREPRENEURS:
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Growing Pains
When reality bites

Up & Comers
From software to suds

Contrarian consultant

At Work
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INVESTMENT COLUMNISTS:
Portfolio Strategy
Adaptability

MONEY AND INVESTMENTS:
Streetwalker

TECHNOLOGY:
Technology
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A brief on briefing.com

Staying Healthy
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Software Horizon
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COLUMNISTS:
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Management Strategies
Firing your dealers

DEPARTMENTS:
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Digital Rules
CEOs For The Next Century

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