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FEATURE

The Gay Triad

The Gay Triad

November 17, 2006
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" does close proximity contribute to greater cooperation or more intense competition within the industry? "

Like the spires atop the Golden Gate Bridge, there are three San Francisco companies that sit at the very peak of one of the adult industry's most lucrative genres: gay films. Raging Stallion, Titan Media and Falcon Studios are widely regarded as America's leading producers of gay content. What accounts for their success? How do they stay on top? What challenges lie ahead? XBIZ spoke with top executives at each studio to get their take on these and other issues.

One key element that all three studios attribute their success and longevity to is an obsession with quality, viewing it as the cornerstone of their success. None of them is shy about touting their achievements. It may sound self-serving, but when you have their track records, it's more than mere bluster.

"Keeping the quality high, consistently on every single project, is key," says Chris Ward, president and main director at Raging Stallion. "We are the only studio that offers a 100 percent money back guarantee on all of our movies — if you don't like it, you can have it for free."

Raging Stallion has been honored with numerous awards and accolades because of that policy and commitment to quality.

"Our recent hit 'Arabesque' was the top-selling gay movie of 2006, with more than 22,000 units in the first nine months. Our release mix contains mainstream and hardcore products, with a mixture of two-disc blockbusters and standard one-disc feature films."

Keith Webb, vice president of Titan Media, echoes Ward's sentiments on quality, saying that getting the newest and hottest models, and hardcore sex that pushes the envelope, are essential to staying on top in the gay adult market.

"We have also always been on the cutting edge of technology," Webb said. "We were the first major gay studio to release our entire catalog on DVD. This put us 2-3 years ahead of other studios as they struggled to figure out DVDs. We were the first major gay studio to have online digital sales of our content through our own website."

Falcon Studios president and CEO Todd Montgomery said that taking some of the taboo out of gay sex has helped his company stay on top.

"We've consistently stayed true to our brand in terms of quality and production values, innovation and really showing that there is no shame in sex between men," Montgomery said. "If you were to compare Falcon's titles from its beginning 32 years ago through today, you'll see that there's been an evolution in the brand where models look different; genres and themes change over the years based on the taste of the directors. But you'll also see a level of detail to quality regardless of those changes over time. I think that's the one thing that's kept us differentiated and a brand leader."

Room For Improvement
Of course, Montgomery admitted, there's always room for improvement.

"The company had kind of stagnated a little bit in recent years," he said, explaining that as a former management consultant, he was recruited by Falcon's board to help restructure the company after founder Chuck Holmes' death. The company also was late to embrace DVD as the next vehicle for adult content.

"We were a bit adrift," he said. "The company was one of the first on the Internet but really didn't have a clear strategy for the Internet. Falcon was successful at times despite itself, simply because it had such an amazing brand and a vast library of content. The whole world's changed now with the advent of the Internet and new technologies, and consumers' behaviors are changing so quickly that you have to adapt quickly."

One of Falcon's solid business offerings is that it makes high-quality movies and has a handle on online and brick-and-mortar distribution.

"The areas where we have not done as well — and we're doing better, but not as well as I'd like — are digitally distributing our content to the end user," Montgomery said.

Falcon currently offers video-on-demand online but plans to unveil an enhanced video site by the end of the year. In November, Falcon will launch its upgraded e-commerce platform for purchasing DVDs, toys and other products. The site also will serve as a portal to the new VOD service and eventually to a revamped membership site.

Competitive juices flowing, Montgomery said the goal is "not just parity but brand leadership," and he commends Raging Stallion, Hot House and some of the other studios for their online efforts, noting that although they've created much better user experiences for their customer, he feels confident that Falcon can deliver a superior product to anything that's currently out there.

As one of the oldest gay studios in the nation, Falcon owes its existence to founder Chuck Holmes' visceral reaction to what was available at the time.

According to Montgomery, the story goes that in the early 1970s, "Chuck saw a film where he could see that the guy, when he was in a certain sexual position, had dirty socks or dirty feet. It just disgusted Chuck, and he thought, 'I can do something better than that.' And so he did."

Holmes started producing loops at a time of great risk to adult filmmakers.

"It was predominantly a very underground business," Montgomery said. "People would smuggle loops across state lines because at that time they could land you in jail."

Falcon, of course, prospered. Over the years it has nourished the careers of such gay adult icons as Titan founder Bruce Cam, Hot House's Steven Scarborough and COLT's John Rutherford. Holmes also became a prominent benefactor of the gay and lesbian community. His estate's million-dollar gift to the San Francisco Lesbian, Gay, Bisexual and Transgender Community Center was the largest individual donation to any LGBT group in San Francisco at that time. As a result the center was renamed in his honor.

Size isn't Everything
With a background in TV and solid adult work at Falcon, director Bruce Cam was ready to go his own way. His company Titan Media got off to an auspicious start when its maiden effort, "River Patrol," took the award for 1995 Adam Gay Video of the Year. From a garage with just three employees, Cam helped grow Titan into a powerhouse worthy of its name. The company recently moved into a new 15,000-square-foot studio and office space in San Francisco's SOMA district. But even in gay porn, size isn't everything.

"An indicator of a successful, well-run company is how you treat your employees," Titan's Keith Webb said. "We have more than 25 full-time employees with full medical benefits, paid vacation, same-sex partner benefits and a fully paid profit-sharing program for all our employees."

SOMA also is home to a number of gay adult producers, including Raging Stallion and Falcon.

But does close proximity contribute to greater cooperation or more intense competition within the industry?

"This is a business like any other business, and there is always going to be competition for the same pool of resources," Webb said. "We try to maintain mutually respectful relations with all the other companies. But we are running a business, not running for prom queen. There are many inflated egos in this industry that take things personally, instead of realizing that this is a business and we are just acting appropriately. Our loyalty and commitment is to our customers, our employees and the gay community."

One trend that Webb decries as terrible for the gay community is the explosion of bareback films that "glorify unprotected anal sex, eroticizing the highest-risk sex act known — internal anal ejaculation. It is like playing Russian roulette with your ass," Webb said.

Titan's future plans are grounded in the studio's longstanding enthusiasm for new technologies.

"We made a strategic business decision about seven years ago that we were going to be an Internet-based company and market directly to our end customer," Webb said. "The Internet gave us the means to target and reach our customer directly. This was the single most important decision in our company's history and is what helped launch us to the top. Most other companies relied on U.S. wholesale sales as their main source of income. We targeted our end customer as our main source of income and diversified our income streams across many channels early on." The focus now, according to Webb, is exploiting new ways of getting Titan's content directly into customers' homes, like IPTV and broadband VOD.

"We also will be exploring new ways of creating content such as green screen and digital animation," Webb said. "We have already done several small green screen segments in our films and people did not realize we had done so. Green-screen and other technology can offer us the flexibility to be more creative with our content and go places we have never gone before. I think that someday we will have models come into the office, and they will have a full body scan. We will then be able to take that scan of the model and digitally generate an entire film without the model having to perform at all. Could you imagine that? An entirely computer-generated live action and hardcore film that looks realistic."

Falling Price Points
Raging Stallion's Chris Ward also emphasizes his studio's focus on the Internet and new technology.

"Raging Stallion is at the forefront of Internet activity with a whole range of memberships sites — SexGaymes.tv, RearStable.com, RagingStallion.com, HairyBoyz.com, FistingCentral.com — and an extensive affiliate marketing engine, GunzBlazing.com. We also have one of the largest content feed networks, HardGay Feeds.com."

Ward points to the recent re-launch of RagingStallion.com, with its new state-of-the-art shopping cart system, as an example of the studio's role as a leader that "intends to stay one step ahead."

After the site went live in May, Ward says that many other major studios immediately went into redesign on their sites.

But Ward is hardly content to rest on his laurels. "Our marketing department needs to be expanded," he said. "It takes a major marketing effort to take a great movie and turn it into a blockbuster hit. The fact that we have a release every nine days makes fully marketing our movies difficult."

The success of "Arabesque" was a defining moment for Raging Stallion. "From both an artistic and financial level, we are all very proud of 'Arabesque,'" Ward said. "It was great to see cash flowing in right beside the huge number of excellent reviews."

Raging Stallion also distributes its own product.

"We have the largest in-house distribution system of any of the major studios, with sales staff focusing both on the U.S. and Europe," Ward said. "We release 36 major movies per year, the largest output of any gay erotic studio."

The company occasionally picks up other titles for distribution as well, and it plans to sell movies from all quality companies on its new site, GayDVD.com, Ward said. But overall, Raging Stallion sticks to selling its own titles.

"I've had many companies come to me asking for distribution, but I do not think that distribution is a good business to be in right now," he said. "Major distributors are hurting because the Internet has given customers and stores a way of directly dealing with studios. Also, price points have continued to fall. What used to sell for $69 now sells for $49. So there is little room for middleman profit. Distribution also carries a huge responsibility — producers depend upon you for their oxygen. I do not want to be a paramedic in a time of increasing competition and reduced sales."

Looking Back
Looking back at Raging Stallion's origins, Ward says he owes his career to two people: "Steven Scarborough [of Hot House], who taught me how to make movies, and JD Slater, who convinced me to start my own studio," he said. Slater, a veteran performer, composer and musician (his scores are an integral part of Raging Stallion films), founded the studio with Ward seven years ago.

"We worked with Hot House for several years after Raging Stallion was founded — Steven was a source of constant support," Ward said. "Over time, however, we became competitors and, to be honest, there was a period when relations between Raging Stallion and Hot House became strained. We are rebuilding our relationship and have come to a good place."

Like all segments of the adult industry, producing and selling gay films is very competitive. But one thing that Falcon, Titan and Raging Stallion all agree on is the positive impact of being headquartered in the City by the Bay.

"San Francisco is the gay capital of the universe and has contributed greatly to our success," Webb said. "From the overall liberal attitude of the community to the never-ending pool of models, San Francisco has more to offer gay companies than any other city in the world."


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