Virtual Reality Livestreams Come to the Porn Industry by John Gaudiosi @FortuneMagazine December 16, 2015, 11:29 AM EST E-mail Tweet Facebook Linkedin Share icons Several adult entertainment companies have already begun filming 360-degree videos that transport viewers inside the perspective of the male performer. Now the first livestreaming porn channel has launched, allowing users to be in the room with the adult actresses virtually. CamSoda, which works with popular adult stars like Gianna Michaels and Dani Daniels, will host live virtual reality sessions every Wednesday night beginning Dec. 16. The company has built its own 360-degree rig using six GoPro cameras. Daron Lundeen, president of CamSoda, says the six live high definition streams are fed into a super computer that stitches them together to make a 360-degree video feed. The free stream is accessible on any virtual reality device, including Google Cardboard GOOG , Samsung Gear VR, Facebook Oculus Rift FB , and HTC Vive. Lundeen says the adult entertainment industry has long been an early adopter of cutting edge technology, and virtual reality is no different. “Virtual reality is quickly becoming one of the most talked about subjects within the industry for its potential to provide users with a truly immersive and transformational experience,” Lundeen says. Lundeen says that while “live sex” searches are roughly one-tenth the size of “free porn videos” searches, livestream patrons tend to be more sticky. “Their lifecycle is very different because they are interacting with the models and developing relationships,” Lundeen says. “It is very similar to a social network.” According to Piper Jaffray research analyst Travis Jakel, adult entertainment will be the number three driver of all virtual reality content behind games and movies, and the porn virtual reality business will grow into a $1 billion industry by 2020. Piper Jaffray does not break out livestreaming from the rest of the adult entertainment business. Jakel forecasts that 3% of virtual reality users will pay on average $35 for adult content in 2016, accounting for $13 million of the total market—compared to 5% of virtual reality users spending an average of $56.66 on games, accounting for $35 million of the market, and 15% of VR users spending an average of $8.19 on movies, accounting for $15 million of the market. Lundeen launched his company last year with a focus on the mobile adult livestreaming business. He says the company now receives 60% of its revenues from smartphone and tablet devices. CamSoda provides all of its high definition, and now 360-degree streams, for free and users give performers real-money tips via virtual tokens. Since all adult entertainment companies are private companies, getting a real number on how big the industry is can be challenging. Kassia Wosick, assistant professor of sociology at New Mexico State University, estimated that the global porn industry generated $97 billion in 2014. The U.S. market accounted for $10 – $12 billion of that total. The industry has experienced a downturn in profits as a result of the proliferation of free online porn in recent years. Lundeen says the “live cams” business has not been hurt by the “free tube site” business. “The free tube sites have grown the number of users in the adult industry, which has helped the live cams business,” Lundeen says. “In addition, the free tube sites (adult and mainstream) have taught us that you have to give users free content to keep them coming back.” For more on tech and the adult entertainment industry, watch this Fortune video: Subscribe to Data Sheet, Fortune’s daily newsletter on the business of technology.