If there was no consumption, there would be no production.
This is wrong in every respect (with the exception of paid for consumption, of course). If someone downloads kiddie porn for free that consumption is largely invisible. I think only true idiots would post the stuff on a website, which would get taken down quickly anyway (and be highly trackable). So the vast majority of the consumption will be by less visible means, such as Usenet, P2P, and the like.
If there is no money incentive, why go through the risks of recording the illicit acts? It doesn't make sense. If one is predisposed to do it anyway just for the hell of it, it is obvious such a person will not be deterred by lack of consumption, so the kid is violated anyway. 1 download or 1000000 downloads would make no difference, since the perpetrator would not ever know about them.
Child porn isn't something you would use a studio for. It is something that is a home-based business.
My point exactly. It's hard to make a profit at your business if people are getting their copies for free.
So again you prove my point -- it's the *paid for* consumption that drives it, not the free consumption. And most likely, the "third-world hovels", as you put it, make their money locally anyway. They will probably not be able to put together the resources to charge for this stuff online, and if they did, would make themselves easy targets to track down. At which point Law Enforcement will actually have some worthwhile work to do -- finally.
And the "third world" people have a tough problem -- sell your kids and eat; don't sell your kids and starve. And it's not just porn -- it's for "terrorist" operations as well. We here in the Rich West have the luxury of being able to moralize about such things, but if you are in their shoes, what would you do? I often find that one's morality is almost always one of convenience. It's always someone else that's "amoral", never oneself. Funny how that works.
Want to end child porn? Want to end the recruitment of kids turning them into human bombs? Then you have to end the conditions that causes people to have to make the choice between their kids and their food. It's just that simple -- and that complicated.