The Year It Got Serious: 2

Gregory A. Piccionelli
In part one, we looked at some of the landmark decisions in the areas of obscenity and copyright law and the unprecedented enforcement activity by government agencies such as Cal/OSHA and the Federal Trade Commission, the new 2257 regulations and beyond. In this conclusion, we'll look at some of the good news to come out of the past year, and what the future holds:

The Best Of Times
I am sure that many in the business will find the litany of events above discouraging, if not dismaying. Particularly since the frequency of bad news seems to be increasing, and there are still 38 months left in Bush's second term. God help us. It looks like the adult entertainment industry is going to be on front lines of the global culture war for some time to come.

But the news above was not the only information reported by XBiz World in its first extraordinary year. Actually, there were clear signs that the good guys will ultimately win this war and that our cherished freedoms will survive after all. It just may take some time to get through the rough spots. In fact, on balance, borrowing the words of 'Ole' Blue Eyes,' I personally think "it was a very good year." For example, we should not lose sight of the fact that in the past 12 months, XBiz also reported:

  • Nov. 9, 2004. President Bush's staunchly anti-porn, ultra conservative Evangelical Christian Attorney General, John Ashcroft, resigned, culminating a nearly four-year period in which a much feared broadly based prosecutorial attack on the adult industry never materialized. After hearing the news, all I could do was praise the Lord and thank the Founding Fathers, who I'm sure were lobbying the Big Guy on our behalf.

  • Jan. 20. U.S. District Court Judge Gary Lancaster dismissed the obscenity and conspiracy case brought by the government against Extreme Associates and its owners Rob Black and Janet Romano. The case had been promoted by the DOJ as the first of many obscenity prosecutions that would soon be filed. It was also the first federal obscenity prosecution of a video producer in more than a decade and the first to include counts aimed at both videotape and Internet distribution of explicit content. The prosecution subjected the defendants to potential sentences of up to 50 years and fines of $2.5 million.

The dismissal of the Extreme Associates case was great news for the industry. But better still were the legal grounds upon which Lancaster based his decision. Essentially, he held that the government has no right to intrude upon the privacy interests of consenting adults to view materials that only depict other consenting adults engaged in lawful activities by prosecuting the distributors of such lawful materials. Hallelujah! If the ruling is upheld on appeal, and the impeccable logic underlying Judge Lancaster's decision is followed in other jurisdictions, obscenity prosecutions may, at long last, cease to be a meaningful threat to most distributors of erotic content.

  • June 16. The Free Speech Coalition filed a federal lawsuit seeking a temporary restraining order enjoining enforcement of the 2257 regulations. Shortly thereafter, the FSC and the other plaintiffs won the first skirmish of the 2257 war by securing from the government a temporary promise not to enforce any of 2257's regulations against the plaintiffs or members of the FSC in good standing as of June 25. The agreement was still in place as of this writing. We are optimistic, however, that our agreement with the DOJ will soon be replaced by a court order enjoining the DOJ from enforcing all, or at least the most odious parts of the regulations, for the duration of the litigation. One clear benefit of the litigation effort so far has been to unite the adult entertainment industry like never before.

Also, in the past year, the industry was favorably affected by several important legal victories against significant non-governmental defendants. For example:

  • June. In MGM vs. Grokster et al, the U.S. Supreme Court helped the industry's content creators by ruling that peer-to-peer file sharing software providers cannot promote their products as a means of obtaining free copies of copyrighted material without facing liability for intentional copyright infringement.

  • Earlier in the year, adult online merchants were provided an important victory striking a blow against the tyranny of the credit card companies. In January, the 2nd Circuit upheld a settlement agreement through which online adult entertainment merchants accepting Visa and MasterCard payments between Oct. 25, 1992, and June 21, 2003, would be eligible to collect a significant refund of processing fees they paid to Visa and MasterCard as part of complex litigation settlement agreement.

Perhaps the best evidence that these are still "the best of times" can be gleaned from the fact that despite an unprecedented onslaught by the intolerants of the world seeking to destroy the adult entertainment industry, acceptance of and demand for erotic content have never been greater. For example, all over the world, more satellite and cable channels are carrying adult content than ever before. Throughout the year, XBiz World brought us numerous stories documenting this apparently unstoppable trend toward greater mainstream acceptance. For example:

  • 2005. Mainstream producers such as HBO and Showtime continued the trend of producing documentaries that portray the adult industry in a very favorable light. For example, two such productions airing in the last year, "Pornucopia," a six-hour documentary about the industry and "Katie Morgan — A Porn Star Revealed" were both widely viewed and critically acclaimed.

  • Earlier this year, the documentary "Inside Deep Throat," containing explicit sexual footage from the original film was in general distribution playing in non-adult theaters throughout the United States, often in rotation with the original X-rated film.

  • While music sales and motion picture box office sales continue to slip, total adult DVD unit sales and video-on-demand sales are growing at an accelerated clip, as are in-room sales of adult content in hotels and other hospitality venues.

All the good news adds up to this: The adult entertainment business is finally being treated as a serious business. Even XBiz World's great success is, in a way, emblematic of this fact. As one mainstream journalist commented to me after reading his first copy of XBiz World, "I didn't realize that the adult entertainment industry had its own version of Variety."

Indeed, the merging of mainstream and adult production — a positive trend that has been going on for some time — also seems to have accelerated in the past year. For example, while mainstream motion picture producers continue to embrace adult themes and content, the quality of production of high-budget adult features such as "Pirates" (Digital Playground) and "Darkside" (Red Light District) now clearly rival their Hollywood counterparts. As a consequence, such high-quality adult content is beginning to appear on mainstream retail shelves in significant numbers.

The Future
In the short term, there is going to be a lot of messy, expensive but critically important litigation that will significantly determine the future of the industry. These important cases will include, for example, the upcoming trial challenging the Child Online Protection Act (COPA), the government's appeal of its loss in Extreme Associates, expected challenges to the Michigan and Utah child protection registry laws; numerous civil and criminal Can-Spam cases; the Acacia lawsuits, and of course, our continued 2257 challenge. But amidst all the litigation, several trends will continue unabated:

  • The continued globalization of the adult entertainment industry, including double-digit growth in many parts of the world;

  • The continued adoption of new technologies by adult companies, such as high-definition DVD and VOD distribution;

  • The continued growth in mobile phone distribution of adult content;

  • Greater convergence with the music industry, through mainstream artist exploitation of adult (Snoop Dogg, etc.) and adult industry exploitation of mainstream artists (Skin Musik, etc.); and,

  • The beginning of the convergence of the adult entertainment business with the computer gaming industry.

In sum, despite a lot of bad news this year, and the likelihood of a lot of bad news in the years to come, you can be confident that while the censors will try, they cannot change human nature. Humans are beautiful creatures, often even more so naked, and you can bet, we will always want to look. Moreover, you also can rest assured that those who have tasted freedom will always prefer it to servitude. The Religious Right is not going to put the porn genie back in the bottle.

Consequently, I see a bright future for the adult entertainment industry once we get over a few fairly serious bumps in the road. To get from here to there, I will leave you with the same general counseling I provide all my adult entertainment clients: don't do anything stupid, don't be too greedy, be considerate of the concerns of parents, keep kids away from adult materials, and keep kids out of the production of adult materials, without exception. Never even possess any material that could be child pornography. Stay informed. Follow the industry's trusted news outlets, such as XBiz, and seek out and follow the good counseling of a qualified adult entertainment attorney.

Do all of the above and I will be willing to bet that you will be around for the truly great days of adult yet to come.

Gregory A. Piccionelli is one of the world's most experienced Internet and adult entertainment attorneys. He can be reached at Piccionelli & Sarno at (310) 553-3375 or www.piccionellisarno.com.

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