DVD Distribution Goes Back for the Future

Bob Johnson

Traditional adult DVD distribution is dead. Wait, no it’s not. Well, it’s waning — unless of course you have a great niche and international reach. The conundrum is enough to make studios; producers and directors abandon the whole hard goods DVD distribution model and go all in online.

It’s a question that’s been bandied about since free online porn infected the industry and caused the sale of traditional DVDs to plummet. But similar to mainstream entertainment, DVDs — and the methods in which consumers get them — are still a viable part of adult producers’ strategies and won’t be disappearing for quite some time.

DVD is still a vital part of our distribution and brand management business but other parts of our business like broadcast, Internet and novelties have seen greater growth over the last three years. -Mark Hamilton, co-owner Pulse Distribution.

Pulse Distribution and Licensing co-owner Mark Hamilton agrees that the biggest impact on DVD distribution has been the availability of free content online, impacting every area of the adult business including broadcast, Internet,VOD and paid membership sites. But he believes there’s still growth potential, evident in the amount of studios that have signed on with his company for DVD distribution.

Pulse currently distributes for more than 120 lines exclusively on DVD for gay, straight and transsexual content providers that include top names like Hustler, Pink Visual, Falcon Studios, Shane’s World, and more.

Hamilton says that from the start, the company decided to represent its studio partners across multiple formats, including DVD, broadcast, mobile and the Internet in a strategic move to buffer a potential decline in DVD sales. A method that’s apparently paid off for Pulse and its clients, opening doors for new distribution channels. “Nothing has really changed in that respect. DVD is still a vital part of our distribution and brand management business but other parts of our business like broadcast, Internet and novelties have seen greater growth over the last three years,” Hamilton says.

The executive also noted that there’s been a significant consolidation in the DVD distribution business over the last few years fostered either by a declining number of self-distributed studios or because studios have decided to focus their efforts on other areas of their business because of the inherent costs of self-distribution. So moving to a third-party distributor makes financial sense.

That idea is also trending for Monarchy Distribution that lends a helping hand to studios, independent producers and even Internet content providers.

Owner Mike Kulich’s take on the state of DVD distribution and near future is that it changes so quickly it’s difficult to keep up. He agrees with Hamilton regarding the pounding DVDs took from free porn. “The value of content has without a doubt decreased because of free Internet porn. You can see that in broadcast — many providers will only pay a fraction of what they used to for a new title — so the key to success is about being creative and making money on every platform that is out there,” Kulich says.

But like the Pulse boss, Kulich believes there’s still gold in DVD distribution — especially since the playing field has shrunk.

“My company has always focused on DVD and broadcast,” Kulich says. “These two platforms are the more traditional form of adult content distribution and in putting all our energy into those mediums has proved to be a huge success. DVD has taken a substantial beating in the past few years but contrary to popular belief, the market is far from dead. It has definitely shrunk, but with more and more studios beginning to take their focus off the DVD market and putting their energy into making money on other platforms. That translates to the opening of more market share, so we have seen consistent sales over the past year in DVD.”

Adam & Eve sales rep Ryan Thomas admits his company has also suffered from declining DVD sales but its distribution model that includes the company’s powerful online presence, catalog and franchised stores help buoy sales. In addition, Adam & Eve uses various marketing promotions to sell off, or give away titles.

With name lines including its own Adam & Eve Pictures (that includes the Michael Ninn blockbuster “The Four,” comps and catalog titles), Skinworxxx, Nina Hartley’s How-to Guides, Candida Royalle’s Femme productions and the Sinclair Intimacy Institute, the company relies heavily on its notoriety to help bolster its distribution efforts.

“Adam & Eve is such a powerful brand. We decided to sell from within first… to have exclusives on our own products. We have multiple in-house video clubs that we, AEP, were not maximizing before, so we started internally, then worked our way out to the wholesale market,” Thomas notes.

Another company using its strong brand to weather the free porn storm is Girlfriends Films. Vice President Moose says that there are still thousands of stores domestically and internationally — including New Zealand and Austria among others — that still want physical DVDs “We had record sales last September and now with our boy/girl lines we’re even beating the competition,” Moose reveals.

Moose agrees that marketing is now a key aspect of keeping DVD distribution alive now and in the near future. He says his company regularly communicates with stores for feedback and institutes a six-month DVD release window before VOD and broadcast to help assure the sale. “We grew big from broadcast and VOD but we still respect the stores,” Moose says, adding that Girlfriends does regular store signings to connect with fans to keep momentum.

Another company that believes fans keep DVDs alive is Vantage Distribution. The company’s lines include DreamZone Entertainment, Amateur Relations, Black Storm Pictures, Brand XXX Pictures, Double Team Studios, Manville Entertainment, Pajama Party Entertainment, Las Vegas, Western Visuals and V9.

Vice President of Sales Adam Hasner says his distribution is continuing to expand and keeping on top of customers’ buying habits is key. “We have been continually fine-tuning our processes and selection to make sure we have what our customers want, when they want it. We work very closely with each of our studios to design a release schedule that aligns with retail demand. The result is a diverse catalog full of quality titles that are easy to sell.”

Keeping fans happy is important to the distro efforts but Moose also cautions against unfair sales practices like “back door” deals that can ruin a distribution effort. “We also only deal with wholesalers who pay their bills. What’s more, Girlfriends is proud of its shipping efforts and new 37,000 square foot warehouse facility where Moose says the company “fills every order and never misses shipping a product.” “We even meet with Fed/Ex and UPS management to assure that our schedules coincide and we can get the best prices,” Moose notes.

Even without a powerhouse name behind it, the savvy distributor can still make its way in the distro game and keep pace for the future with the right strategy.

Kulich says Monarchy has tried to diversify and create meaningful partnerships with everyone in the business. “For instance, we have exclusive deals for certain lines with VOD providers,” Kulich says. “That way, when we put a title up for VOD, it is not lost in the shuffle with 100,000 other titles. We suppor t our providers and it comes back to us in successful sales and profits. We try to be creative with our marketing efforts and release titles that are in demand and that people will actually want to shell out money for. We have very close relationships with our distributors and ask them what is hot, what is selling and capitalize on the popular niches at the moment.”

But what about the future — near and far?

Kulich believes mobile’s continued reach is the next big thing. “With the rising sales of smartphones, tablets, and smart TVs, that is without a doubt where the future of the industry is heading, he says, but he hasn’t given up on tried-and-true methods, maintaining that the current distribution channels are still available if ‘producers capitalize on them. “They can be as successful and as profitable as they were a few years ago,” Kulich says.

Adam & Eve’s Thomas has a different take. He believes there will be fewer production companies in the near future with more shif ting their focus from movies to lube and novelty lines. But the stronger producers, like Adam & Eve, that have the legs to create high- end features, women friendly productions and certain genres will continue to see good sales through regular distro pathways.

Pulse’s Hamilton notes, “There have been significant expectations over the last few years for both Blu-ray and 3D DVDs, and that’s also true for the mainstream DVD business. Although we have experienced some success with these technologies they have not supplanted traditional DVDs and we don’t expect that to change anytime soon. We are confident that the DVD business will continue to play a significant role in generating revenues for adult companies but we always advise our studio partners that for a line to be successful it must have an appeal across all media delivery formats and not just DVD. In the past, a studio could thrive on its DVD business alone. This is no longer the case, even though DVD revenues can still be instrumental in a studio’s profitability.”

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