State of the Industry (2009) - Meltdown

[Snowman]

Originally Posted by haynese The Economist explains the porn downturn very well: http://www.economist.com/world/unite...ry_id=14416740

Good find Hay.

The article is well written, but covers familiar ground for the "State of the Industry" thread readers here. Nonetheless, it is nice to see a serious business publication acknowledge the industry as legitimate "big" business.

Some little gems from the article:

• Nina Hartley claims she was getting booked for one scene a week, now it's down to one a month.
• She's maintaining a relatively high rate - $1200, but the article notes rates have fallen for younger performers without star quality now that production has "collapsed."
• The downturn in porn is affecting the local LA economy.
• Mark Kernes of AVN estimates industry revenues were $6 billion in 2007 and mostly from DVD sales and rentals.
• Diane Duke of the trade industry free speech coalition estimates revenues have fallen 30-50% but one un-named producer said sales were down 80%.
• Kernes estimates porn valley not too long ago was making 5000-6000 movies a year. He believes that number has been cut in half now -- to about 3000-4000 (which would still work out to about 291 new releases a month).
• Kernes states female talent without star power would command $1000 for a bg scene in the recent past, but now are getting $800. In my experience, a vanilla bg scene could often be had for less, even at the industry's peak.
• Male talent is suffering even worse. Guys who used to ask for $500 a scene are now getting $300.
• Here's how Hartley sums up the "State of the Industry" -- "Pornography in general has become “like potato chips, everywhere and cheap, to be consumed and tossed,” says Ms Hartley. It’s not the same as in the golden age when she joined. “The industry will shrink and stay shrunken,” she reckons."

[AussieWill]

Haha, the Nina Hartley economic barometer.

Here's the possible direction of porn in the coming years..Hedonism will flourish. Pornography will become more bizarre. These trends will meet with social and political backlash, as mainstream behavior will simultaneously become more conservative. Look for both groups, pro-pornography/hedonism and anti-pornograpy/conservatism, to become more intolerant of the other as social mood declines.

[Snowman]

In light of the current state of the porn industry, Playboy's new CEO, Scott Flanders is betting on the revival of Playboy Clubs as the key to the company's future. Right now, there's only one operating Playboy Club, at the Palms Casino in Vegas, but Flanders stated his intention to open clubs in the "double digits" over the next few years. First up is a new club in Mexico, then Miami then Macau in 2011.

*** But the biggest upside, in his view, can't be found in the tired magazine, hard-core sex videos or Playboy TV channel that were his predecessor's focus. Instead, he sees the future in a throwback to the company's past: Playboy clubs. *** Playboy has no plans to shut the magazine but has hinted at drastic cuts in frequency, circulation and pages. Playboy TV has room to grow, Flanders said, and the company's subscription Web sites have held their own against piracy and competition from free sites. ***

To read the full article from the Chicago Tribune, click here:

http://bit.ly/1aCR72

[quagmire]

CNN piece from 10/28
Recession Hits Porn Industry
http://nalert.blogspot.com/2009/10/r...-industry.html

[AussieWill]

Originally Posted by quagmire CNN piece from 10/28 Recession Hits Porn Industry http://nalert.blogspot.com/2009/10/r...-industry.html

More than one porn great has been thinking of moving into a normal profession recently.

[Snowman]

Originally Posted by quagmire CNN piece from 10/28 Recession Hits Porn Industry http://nalert.blogspot.com/2009/10/r...-industry.html

Good little clip that summarizes the problems we've been talking about here for several years. Unfortunately, I still don't see any viable solutions to turn things around.

Is porn just doomed?

[CougarXR7]

Boy...

I've been away from this board for quite a while, and things just seem to only get worse in the industry. I used to eagerly anticipate new titles being released by RLD, Private, and Zero Tolerance once a month. Not anymore- they've slowed down quite a bit. I've hit my local vid store a couple times and see the same old titles sitting on the shelf. Where's the new stuff?

Not only has output suffered, but quality as well. Private used to be the gold standard for porn. Now they're churning out the same sort of brainless, amateurish junk as their lesser counterparts. Some of their more recent films, such as "Sex Secrets Of The Yeti" were just plain stupid. I couldn't believe that they would lower themselves to producing such garbage. Their women always used to be gorgeous, but lately I'm noticing more skanks slowly creeping into their productions.

These girls will have no choice but to diversify if their portfolio if they wish to survive:

Escorting

Paysites with exclusive content

Mainstream modeling work ( swimsuit, lingerie, fashion catalogs, etc. )

Dancing

Working behind the scenes in porn production- editing, camera, still photography, etc.

Unfortunately, I don't see as many viable options for the males as I do the women. Some may produce their own films or work behind the camera, but not everyone may have that chance as the porn market continues to shrink.

It's sort of hard to imagine Bree Olson making your sandwich or Erik Everhard changing your oil to make ends meet, but in today's economic climate it's a definite reality.

[Snowman]

Xbiz received this letter from Frank Lefevre of The Love Shack, a "brick and mortar" adult store. It relates to this thread. What I liked about this letter is that the writer offers some ideas on how to solve the current problems currently facing the porn industry. I don't agree his proposals are realistic or would be the least bit successful, but I like how his letter was solution oriented, rather than simply documenting over and over how "Rome is burning." Without further ado, here's one man's perspective on how to solve the porn problem:

To whom it may concern I am writing this letter in hopes it will get to the right people. I am in the adult industry, on the sales end of it, as a matter of fact a brick and mortar mom and pop store. I have been doing this for many years, and now I am simply beside myself. At one time I used to think the people running this industry were simply genius, but now I have to second guess myself, what idiots, you have allowed the Internet to take over your souls. Have any of these companies ever heard of "supply and demand"? Obviously not, you put your movies online for the simple reason that this is the future, and also the greed factor, but now you complain that people can get content for free, and they do once your movie content is online that's it, every Tom, Dick and Harry will and do display it for [everyone] to have for free. Do I, as one person have the answer for this, probably not but I do have an opinion, if you make your video content only accessible in certain places, guess what you can get more for this content, in other words if you produce the movies, sell it to a distributor and then the distributor sells it to brick and mortar stores where this is the only place to get adult porn, you will get the high price for your content. As far as what is already on the Internet, if every large production company pulls their content off now, and don't release no more, then you will be able to police the Internet much better, if you release a new movie and do not release it to the Internet, and the contents end up on the Internet, you have the chance to place criminal charges on whoever placed it there. Sounds like a simple solution but was the Internet the answer, just ask the music industry, all the performers, have their songs stolen every single day, if they were still on vinyl or CDs only they would still [be] getting paid for each copy sold. There is still time to end this dilemma of this thing called the Internet, all I'm saying is if a company produced a movie and only sold it to distributors, and then to a brick and mortar store, and the content was never released online, if it does appear online then you have the right to go after the webmaster, for releasing your content. And then you will get top dollar for your content because it's not everywhere. Get it "supply and demand." I wrote this in hopes you will publish this letter lets make a stand before this industry is ruined. I believe this industry is full of talented people, so stick together and get paid, don't give it away.

A follow up comment from Jeff Mullen of X-Play was equally interesting. It's not solution oriented, but it offers some valuable "Rome is Burning" insight on how porn got into this mess.

The problem that Frank writes about is the absolute single most important issue facing the adult movie industry. It is completely killing this entire industry and it will take a miracle to recover which I don't think it will ever do. Now Frank's concern is all our concern however the problem of free content started first with pirated movies or unauthorized porn as we call it. Now the issue is anybody offering free porn period be it authorized or unauthorized. My company X-Play makes some of the best-selling adult movies currently in stores (Not the Bradys XXX, Not Bewitched XXX, Not the Cosbys XXX, Not Married with Children XXX, Flight Attendants, Not Threes Company XXX etc.) and we pay a private company money each month to remove any pirated content of ours that they find on a wide variety of internet sites. The solution that Frank suggests while noble would not be very effective because copyright laws of the US have no effectiveness anymore. The government will never lift a finger to prosecute somebody ripping off adult content. It just will never happen even if your 10 year old nephew is watching somebody 69 right now on his laptop. The moment one of our movies hits the stores, it is uploading illegally within hours and made available for everybody to watch for free. You would think it would be easy to prosecute these offenders however lawyers have confounded the issue in courts by making intellectual property theft a difficult case to argue. How could something be stolen if it is not in a tangible form they preach. What resulted is many production companies saw their sales decline and in an effort to survive 'dumped' much of their content for pennies on the dollar into the open market and in lousy VOD deals. (Not much different then when some companies wholesaled lousy comp DVDs at .79 cents each a few years back). What has resulted is an entire generation of porn-lovers that watch for free. Sure porn will always be around and it has never been more popular than it is right at this very moment, but the concept of paying for it is a lost art or one that is slipping away by the day. I don't know what the solution is but anybody that blames the economy for bad sales is off their game. It didn't have to get to this point but if any of the big wigs in this industry want to get together to see what we could do please count me in. I am amazed that we didn't fight this harder as there were MANY things we could have done but now might be a time too late. Sad deal for everybody even the consumers because they will see a world without quality new content sooner than they think. Whoever figures this out will be the next billionaire.

[Snowman]

Originally Posted by CougarXR7 It's sort of hard to imagine Bree Olson making your sandwich or Erik Everhard changing your oil to make ends meet, but in today's economic climate it's a definite reality.

These days if there are any job openings at Subway or Jiffy Lube, they get 100's of applications and there's a good chance someone else more qualified would get hired. At the fast food restaurants that I go to in my area, I see the same faces year after year now. These people are clinging to these entry jobs as if it were their career.

[Snowman]

Originally Posted by CougarXR7 Boy... I've been away from this board for quite a while, and things just seem to only get worse in the industry. I used to eagerly anticipate new titles being released by RLD, Private, and Zero Tolerance once a month. Not anymore- they've slowed down quite a bit. I've hit my local vid store a couple times and see the same old titles sitting on the shelf. Where's the new stuff?

This is pure economics. When so called porn "fans" no longer buy porn, no revenue is generated from the studios. Without a steady revenue stream and the prospect of making a healthy profit, producers stop shooting and will eventually exit the industry. Other business opportunities begin to look much more attractive. Thus, the supply of porn will continue to whither and perhaps dry up all together unless this situation changes.

I've come to the conclusion that consumers will either need to be forced to buy it, perhaps through very strong DRM copy protection schemes or adopt a new attitude voluntarily where they support the producers that create the entertainment they enjoy. I'm very skeptical either of these things will come to pass. It actually seems more likely to me that porn will die because as an industry they just can't get it together and the fans don't truly respect the producers.