The porn industry is very much in the same situation that the music industry was about 10 years ago. Unfortunately, film production tends to be even more expensive than music production.
Mass, unbridled piracy has caused most of the large porn studios to fall into financial ruin. Very few studios producing feature films on DVDs some years ago have been able to convert to the online business successfully. Although you may see the studio names out there, they have mostly been taken over, and lumped together by other corporations, and basically only exist in name.
While our membership website business has stayed fairly stable over the past years, DVD sales have plummited about 80%, which was our main source of income. Because of what occurred to the music industry, it wasn't a surprise that the same fate awaited the porn (and even mainstream) film industry. But the worldwide economic crisis accelerated the process more quickly than anyone had imagined. Piracy has become a multi-billion dollar industry, which most of the internet giants facilitate.
The internet has been a double edged sword for the porn industry. At one time, it was very beneficial. However now that it facilitates piracy more than anything else, it has become a disaster.
I have to add that the what is destroying the porn industry, is also having the same effect on most other media as well.
So, your question about the top five reasons for porn's decline isn't that easy to answer. It's more about one thing fueling another. If I could put it simply, I would say:
1. The advance in internet technology which allowed films to be easily pirated.
2. The economy, which fueled the consumption of piracy.
3. Again the economy, which turned piracy into an extremely lucrative business.
4. The absolute failure of any government to protect the film industry (even mainstream) from piracy.
5. A corruption in the mindset of many people who disrespect intellectual property, and think that anything which can be digitally copied should be free of charge as a birth right.
Excellent, lucid answer. We publish gay/erotic literate fiction, and it's almost impossible to succeed as, years ago, we might've. However, in mass pop-culture I see agents and casting people on both coats in the USA more ready to audition adult film actors than ever before. You can certainly foresee more explicit narratives in feature film on cable and now even on network t.v. Inevitably, these incredible stable of actors whom you use will be tapped for 'legit' (as it's called.) The answer is to manage them; fairly and properly, as well as providing them with opportunities in mass market media. It's definitely on is way.
How much has your business declined in recent years? In descending order list the top five reasons why your business has declined. ( is it piracy, other porn producers, the internet, the economy etc. etc.)