Its Official. Porn is not recession proof....

[softball]

But then I never thought it was....


In good times and in bad, sin sells; booze, tobacco and sex (http://www.kiplinger.com/magazine/archives/2008/02/virtues_of_sin_stocks.html) have all weathered countless economic storms over the centuries. This recession is a little different, though. It's been extremely challenging for adult filmmakers, who are not only wrestling with anemic consumer spending (http://www.bloomberg.com/apps/news?pid=20601087&sid=axQqT3KVk60A&refer=home), they're also competing with a nearly infinite supply of free, amateur videos from countless user-generated sites, not to mention a glut of traditional inventory.
"From my experience, as long as I've been in this business, this is the first time I can say that we're absolutely feeling the effects of the economy," says Steve Orenstein, president and founder of Wicked Pictures, and a 29-year veteran of the adult-entertainment industry. "There was a line we used to use about this business being recession proof. When people talked about the economy, we'd say our business is fine. But look, now you'd have to be blind and deaf not to see that there are problems.".....
If you are blind, perhaps someone will read this to you. If you are deaf, please respond with your success stories....

http://blog.wired.com/business/2008/07/turns-out-por-1.html

[RawAlex]

I think that it is hard to seperate out the economic issues from other issues.

the DVD market continues to suffer as there is a move to online delivery. online delivery suffers because of torrents and tubes. I am thinking people are still interested in porn and still want porn, but we are faced with a sea of free options out there that is hurting the overall market, regardless of the economy.

[DannyCox]

Wicked was late getting into the Internet game. Many of the larger Video companies thought that the Internet was just a flash in the pan back in the 1990's, and now they are paying for it. Their product is also quite vanilla where tastes have become a bit more extreme or niche. These people are finally realizing (too late) that it's not just about who has the "hottest chicks", but about what people really want.

People will always pay money for sex, be it real or virtual, but it's the method of delivery that changes.

"Video killed the radio star"

[gonzo]

Wicked was late getting into the Internet game. Many of the larger Video companies thought that the Internet was just a flash in the pan back in the 1990's, and now they are paying for it. Their product is also quite vanilla where tastes have become a bit more extreme or niche. These people are finally realizing (too late) that it's not just about who has the "hottest chicks", but about what people really want.

People will always pay money for sex, be it real or virtual, but it's the method of delivery that changes.

"Video killed the radio star"

It is about what people want. And the biggest mistake I made in this business was just not believing that people would pay for this online as much as they do. I used to think that why would they look at it online when they could buy a magazine. Method of delivery changed.

Ive just shifted my role at work from advertising to marketing. So look for a whole new slew of webmaster tools,weekly newsletters and marketing infromation from AEBN.

I posted in the Oprano traffic forum a thread for instance that tells you the top 5 stars searched for in our system.

Here are 5 hot movie series at AEBN
Throat Gaggers
Drunk Sex Orgy
Its Huge
Party Hardcore
All American Military (gay)

Why series? Because people that are interested in series are repeat customers which make you more money.

This morning Im compiling information on the gay video that we have exclusive rights to. I know that the gay market isnt totally saturated and those consumers spend a lot of money as well.

What I havent understood in the past is why they buy. Doesnt matter now with this kind of information at my fingertips.

So if your looking to try making some money in the gay market keep an eye out for the AEBN newsletter and of course here on Oprano.

[EmporerEJ]

Wicked was late getting into the Internet game. Many of the larger Video companies thought that the Internet was just a flash in the pan back in the 1990's, and now they are paying for it. Their product is also quite vanilla where tastes have become a bit more extreme or niche. These people are finally realizing (too late) that it's not just about who has the "hottest chicks", but about what people really want.

People will always pay money for sex, be it real or virtual, but it's the method of delivery that changes.

"Video killed the radio star"

I wouldn't be too quick to count that gold yet.
The "other side" of the industry has a huge stockpile of content. They also have a completely different idea of it's value, compared to "internet Pioneers."

When the "old boys" are dumping DVDs at less than $1 wholesale, you realize they have devalued that content to the point of giving it away as an advertising method. Anyone able to show them a way to make any level of income from it will have as much content as they can possibly handle.

The more modern stuff, in many cases, is more "extreme." And I agree with you there on that having a different value from the old '' 'nilla" stuff from the 80's and early 90's. But there is an awful lot of that content out there, just waiting to be recycled.

Or, adapted for new uses........
:whistling

[Toby]

...But there is an awful lot of that content out there, just waiting to be recycled...

Waiting for what? Wait too long and the ship sails without you.

[RawAlex]

Recycling content just doesn't work out very well. For the most part, recycled content looks out of date, the hairstyles are wrong, the clothes are out of date, and so on. Plus shooting styles change, especially in mainstream porn. Notice all the current reality guys shooting with slightly overdone wide angle lenses? they discovered that at the right angle, you can make people look smaller and penises look bigger. ;)

Plus once your content is out there and on the tubes and torrents, there isn't any long term recycle value anyway.

[EmporerEJ]

Waiting for what? Wait too long and the ship sails without you.

If there's anything we've learned in the entertainment world, it's never too late.
Deep throat still sells. Hell, they keep recycling that.
Porn doesn't age.
That's the part internet people don't get.
I guarantee if you release a Ron Jeremy movie with new marketing, it will sell.
I recently found one of his better works on a compilation disk.
I can imagine re-releasing that clip to great fanfare with the correct marketing.

Ships don't sail without a pilot.

Point being, all that "old" formerly VHS content doesn't change in value. It's still just as valuable now, as it was a year ago.
Sure, there is the "hot chick" of the moment. They change. But Jenna's still big, and her stuff is a decade or more old.
There's no expiration date to content in the can.

[EmporerEJ]

Recycling content just doesn't work out very well. For the most part, recycled content looks out of date, the hairstyles are wrong, the clothes are out of date, and so on. Plus shooting styles change, especially in mainstream porn. Notice all the current reality guys shooting with slightly overdone wide angle lenses? they discovered that at the right angle, you can make people look smaller and penises look bigger. ;)

Plus once your content is out there and on the tubes and torrents, there isn't any long term recycle value anyway.

I disagree.
There will always be a value to content the customer hasn't seen yet. To him, it's "new."
Pick a time, and then pick the other time in history when the hairstyles were the same.

And re-purposing content always makes it new.
From our perspective, any content we encode for use with the machine is "new" to our customers.

Speaking of niches, all that "old" stuff is now called "vintage."
GREAT big audience for that.

[RawAlex]

I disagree.
There will always be a value to content the customer hasn't seen yet. To him, it's "new."
Pick a time, and then pick the other time in history when the hairstyles were the same.

And re-purposing content always makes it new.
From our perspective, any content we encode for use with the machine is "new" to our customers.

Speaking of niches, all that "old" stuff is now called "vintage."
GREAT big audience for that.

Well, it's a little bit like "classic" rock or "oldies night" at the local club. For some it is entertainment, for others it is just going over the same worn out routine. Depends on your taste. But the one thing for sure, there is a time frame in there on everything where it is neither current nor classic, and 5 year old porn falls in that category - not old enough to be truly classic (and most of it isn't) and not new enough to be current. Also, outside of stuff shot on chromes or with very high end equipment, most of the stuff shot 5 years ago looks like crap already, digitally "old".

In niche markets (where not enough content is produced) you can probably recycle more, but straight up porn wears out faster than $1 running shoes.

[Greg B]

I'm having a great year. My biggest mistake was shifting from what I was doing in the first place and that was drawing toons and serializing them. Series work because of the cliffhanger effect. This past 2 weeks have been my busiest ever. I made so much money this month I didn't have time to count it because I was so busy. I've only had enough time to drop a few message board posts now and then. Now it's on to more study to make sure I have my programming skills up and more drawing and blog post writing. The blog stuff is really picking up. I'm amazed at it all. My overhead is low because I make my content and I learned recently I need to stop gabbing and just keep making content. It works and always has. More toons, more money. I'm good. The recession ain't hurtin' me one bit and even those affiliate programs I subscribe too are making more money. I'm doing something right.

[miz_wright]

I wish our industry were more publicly accessible, with regard to financials and similar. I'd be very interested to see trendlines graphed against macroeconomic factors and how microcap in adult trends against microcap in other sectors.

[EmporerEJ]

I wish our industry were more publicly accessible, with regard to financials and similar. I'd be very interested to see trendlines graphed against macroeconomic factors and how microcap in adult trends against microcap in other sectors.

Some of the companies are public......I own shares in several of them.
And there is (Hopefully) adultvest for the future....
(Once I get the "oily" feeling off my hands)

[boobbucks]

Yeah we have been going steady and actually converting better these past few months. I think people need the release more when times are tough. Plus our big tits fanatics are addicted to monstrously huge boobs. :-)

[Buckwheat]

I b kickin ass with Deecash Bra!

[softball]

deepak wears a bra?

[Greg B]

Yeah we have been going steady and actually converting better these past few months. I think people need the release more when times are tough. Plus our big tits fanatics are addicted to monstrously huge boobs. :-)

Boobbucks, do you have a big tit sponsor program?

[Hell Puppy]

Here's my take... Now keep in mind, I've been in a position to see the influence of the economy on porn sales thru a couple of these.

Now first off, let's state something we should all accept as fact. Sex drive does not change based on economy. People still get just as horny.

What changes is what outlet they can afford. Porn has generally been accepted as "recession proof" because whatever losses you experience due to the economy you gain back in people who cant afford to go out but still wanna get off....it's the cheaper alternative to going out and hooking up.

First big economy crunch I remember while in business was around 1990 or so as Iraq invaded Kuwait. Business boomed, we saw NO impact at all. But keep in mind this was a boom time for graphics and modems. We were all just discovering VGA and real looking pictures on our monitors and modems had stepped up to 9600 and 14400 reaching affordability, so we could download the larger pics. It was the days of McHenry and Giffy Girls, we boomed.

Second one was post-9/11. I personally felt nothing from it on the porn front. There was a general downturn but it was always accepted that it was due to TGPs and tighter processing. By this point the free trial boom period with Crescent, Xpics, etc was done. MaxCash had their business taken over by the FTC for a period and scared the hell out of everyone.

But traffic was still increasing and the sales were there, they just weren't as easy. For those of us who never relied on the free trial to being with, we really saw virtually no impact.

So here we are today....

It's easy to say we're in a recession and that's causing a downturn. But there isn't really enough data to state that as fact. We wont know until whenever the economy turns back around. If sales go back up, ok it was economy. If it doesn't, maybe it was something else.

I believe it's a combination. $4 a gallon gas in the U.S. means there's less free cash in the pocket of the average Joe on the street, that's for sure. He's putting it in the tank and it's rippling all over the economy making prices of the things we have to have go up.

Now I'm not one to jump on the "tube sites are killing us" bandwagon. They're no different than TGP's or any thing else where we've been greedy and given away free content in exchange for traffic. But is the glut of free porn a factor? You bet.

Ditto for bullshit like Deecash is doing. When your money is tight and you finally do hit a mouse trap that makes you give up the credit card and you get hit for $100+ only to find a piss poor members area that hasn't been updated in a year, how likely are you to be a repeat buyer?

Remember above when I said porn and masturbation is a fallback from the expense of going out and hooking up? Well there are more steps on that ladder. If you cant afford to pay for porn or believe it not worth the money, you settle for what you can get for free.

What I think is right now the pie is getting smaller but a handful of large companies are grabbing an ever increasing slice. For the rest of the world it's innovate and adapt or eat the crumbs.

[Greg B]

Great points Hell Puppy.

I think the biggest problem is the price of gasoline. It's an essential. We're a mobile car driving country. I live in Los Angeles and everyone drives to the point no one gets anywhere. I've seen people drive a block. A fucking block to get their mail at the post office! We drive for necessity and for social reasons. Hot fancy cars to show off. We use our cars to annoy others and spread news and for the dumbest of reasons and that just got fucked up because the fun out of driving ends when gas eats into the wallet. Those pennies count. As fundamental an urge to jack off is, people will starve to keep their cars rolling to keep up their image. Being concerned about how others perceive us is man's worse foible.

There's no excuse for credit crunches because anyone can get a credit card still. Even if it's a pre paid card. So again, I'm not seeing slumps, I'm seeing changes. I think the surfers are getting smarter in what they choose to buy. My traditional sources may dip but newer ones flourish. I think the blogging is helping alot. It's the biggest boost in sales I've had since the old TGP2!

[Hell Puppy]

Great points Hell Puppy.

I think the biggest problem is the price of gasoline. It's an essential. We're a mobile car driving country. I live in Los Angeles and everyone drives to the point no one gets anywhere. I've seen people drive a block. A fucking block to get their mail at the post office! We drive for necessity and for social reasons. Hot fancy cars to show off. We use our cars to annoy others and spread news and for the dumbest of reasons and that just got fucked up because the fun out of driving ends when gas eats into the wallet. Those pennies count. As fundamental an urge to jack off is, people will starve to keep their cars rolling to keep up their image. Being concerned about how others perceive us is man's worse foible.

There's no excuse for credit crunches because anyone can get a credit card still. Even if it's a pre paid card. So again, I'm not seeing slumps, I'm seeing changes. I think the surfers are getting smarter in what they choose to buy. My traditional sources may dip but newer ones flourish. I think the blogging is helping alot. It's the biggest boost in sales I've had since the old TGP2!

Just like in the early 70's we're paying the price for having the car be such a large part of society. That round ended up with smaller more efficient Japanese cars unseating the Big 3 automakers in America.

This one may last a lot longer as cars are already pretty small and efficient in terms of gas. Hybrids aren't the answer, operational cost of the lifetime of the vehicle doesn't add up. You basically pay up front in the price of the car what you save in gas. You're better off with the basic 4 cylinder stick shift versions of the same cars.

I think we have a race on our hands. Oil production should max and then start to decline sometime in the next 15 years. Hydrogen or other technology and the infrastructure to support it is still likely 10-15 years or more out.

You think it's ugly now, wait til all of the easily accessible oil on the planet is gone.

Atlanta is much like LA, there's no choice but to drive. Only in recent years have they bothered to think about putting sidewalks in the suburbs. Mass transportation? It carries a stigma that is largely accurate because the powers that control it design it to move people too poor to buy a car rather than move people who work from home to the job centers.

But hey, at least we can now legally pack heat on Marta! If it went where I wanted to go, I might actually use it more often now.

[gonzo]

This from Xbiz

LOS ANGELES — The downturn in the adult business discussed by Variety Editor-In-Chief Peter Bart in April (http://www.xbiz.com/news/news_piece.php?id=92776) is the focus of an article on the Wired magazine website.


"In good times and in bad, sin sells; booze, tobacco and sex have all weathered countless economic storms over the centuries," the article said. "This recession is a little different, though. It's been extremely challenging for adult filmmakers, who are not only wrestling with anemic consumer spending, they're also competing with a nearly infinite supply of free, amateur videos from countless user-generated sites, not to mention a glut of traditional inventory."

The Wired writer spoke to Wicked Pictures president Steve Orenstein, who has not cut back on Wicked's production schedule, although the company is cutting expenses.

"We haven't laid anyone off or cut any salaries, but we're trying to be smarter — cut the things we probably should have cut 10 years ago," Orenstein told Wired.

Adult Video News founder Paul Fishbein told the writer, "At the retail level, all the store owners I've talked to say their rental sales are off 10 percent to 15 percent."

By contrast, SugarDVD vice president of business development Tony Medrano said business is growing.

"We're finding consumers don't want to pay $30 or $40 apiece for DVDs when they can subscribe and get DVDs in the mail," Medrano said.
The story also pointed out that SugarDVD started streaming video a year before mainstream DVD rental company Netflix did, and also offers a pay-per-minute service.

"We constantly have to innovate," Medrano said. "We need to get out in front of consumer demand."
The article is available here (http://blog.wired.com/business/2008/07/turns-out-por-1.html).