The Gay Video Market

Gila Morgan
For a long time, many video stores saw the product of gay studios as something that catered to a niche market and stayed away from it, largely because of the money involved.

Today, little by little, many "straight" adult video purveyors and even mainstream retailers are beginning to enter the GLBT market, largely because of the money involved.

It's no secret that gay men and lesbians comprise an affluent and free-spending market. One mailing list firm calculated that in 2003, the gay market accounted for more than $485 million in purchasing power: $27,000 per person in disposable income after taxes.

And even with the "gayby boom," many gay households don't include children, liberating those consumers to spend on entertainment.

However, many retailers shy away from gay product because they don't realize how large the gay market is, and they're scared off by the inflated price of high-quality gay videos, which can run $15-$20 more than comparable straight product.

Janet, a vice president of sales for Pulse Distribution, the exclusive distributor for Falcon Studios, said she's worked with companies that "wanted Falcon but were hesitant to shell out to get it."

What these retailers don't understand and distributors and production people do, is that gay people want high-end product and are willing to pay top dollar for it.

"Let me put it this way, when was the last time you saw a gay man wearing clothes from Wal-Mart?" Keith Webb, vice president of Titan Media, asked XBIZ.

In contrast to heterosexual men, Webb said, who "will jerk off to just about anything with tits attached to it," gay men are picky. "They do not want $10, four-hour compilations. They want high-end movies and are willing to pay $60-$70 for them."

Stan Loeb, owner of Paladin Distribution, agrees that the gay consumer is more discerning than his straight counterpart. "Heteros just want cumshots," he told XBIZ. "Put a hundred cumshots in a movie, and it will sell." The GLBT consumer, Loeb said, "is just a more intelligent buyer," demanding videos with story lines and production values high enough to feed viewers' fantasies.

The demand for quality, Loeb said, is what allows him to charge $28-$38 for films that retail at $31- $40, compared to straight lines that top out at $16 per unit. "We have no such thing as catalog product," he said, nor does Paladin routinely discount the lines it offers.

While there are low-end gay videos, Webb said, they don't sell well. "A lot of straight buyers just don't know what gay men want to buy. They end up buying low-end gay product because of the price points." In fact, one mistake some retailers make, Webb said, is "investing in too much cheap gay product and then being disappointed when it doesn't sell."

Accordingly, a retailer who wants to sell gay product needs to know the market. In absence of a gay employee to help put together a section, Webb said, "go to a reputable high-end gay distributor like Paladin and ask them what's selling. Check the sales charts and buy [what] you see consistently in the top 10."

And, incidentally, become as brand-conscious as the people to whom you're marketing. "Gay men love labels, are very brand-conscious," Webb said. "Gay consumers, for the most part, are very loyal to stores and brands."

Virgin Megastore executives understood that when they introduced DVDs from COLT Studio Group in most of the chain's stores that sell adult. "Adult product has always been an important part of our product mix, and the gay community has always been an important part of our clientele, so it made sense to start carrying gay product," Bob Bell, Virgin's DVD product manager, told XBIZ.

Bell added that, similar to companies like Vivid, "COLT has become a mainstream brand, so they fit very well with our product mix."

Reaching Out
Once a retailer has committed to selling gay product, it's important to present it properly. According to John Rutherford, COLT's president and creative director, a common mistake retailers make is to "mix up all the gay and straight titles together in a mishmash of product. Gay consumers don't want to look at straight titles when shopping for their product." Keep gay videos in the same area, he said, separating high-end, well-known brands and less expensive product.

Also, Rutherford said, "a clean, well-presented gay area with toys, magazines, DVDs and the like is more appetizing for gay customers."

Webb concurs. "You've got to make them feel welcome in your store by letting them know you have a gay section and are proud of it. Don't hide gay in the back corner like you are ashamed to have it in the store. The gay customer these days is more and more comfortable and proud of [his] sexuality and will react to a gay-positive environment."

Marketing gay product also means reaching out to the gay public. "You've got to let the community know you have the products, and you've got to let them know you value their business," Webb said. "Whether it's supporting a local HIV/AIDS charity event or having a gay-friendly staff, you've got to let your gay customers know you support them."

Another strategy, Webb added, is to "find your local gay bar and local drag queen. Work with them to sponsor a porn night at the local gay bar and give away some DVDs as prizes."

COLT, which has branding down to a science, finds numerous ways to reach the public with its diverse product line. "We work very closely with our retailers and distributors to help promote live COLT Men appearances in their stores and work with their local gay bars to help market, promote and present our products in a fun, safe and sexy way," Rutherford said.

Virgin's Bell confirmed that Virgin Megastores have held in-store events featuring COLT performers and that Virgin has become a presence in gay pride festivals around the U.S.

In short, Webb advises, "let the gay community know you have the stuff they want and that you want their business."

Big, Getting Bigger
The gay market is not only large, producers and distributors say, but it's expanding as more GLBTs are willing and able to express their sexuality.

"With time we've seen that customers feel more comfortable entering adult stores and less afraid to ask for gay titles," Rutherford told XBIZ. "With the gay rights movements across the globe, we have also seen an increase in awareness and comfort for a closeted gay consumer to be more willing to buy and view products in stores."

And those consumers are out there, Rutherford added. Especially outside urban centers, he said, there are more closeted gay men, many of them married to women, who need gay videos as the outlet for their fantasies.

"With all the news of politicians coming out recently, it only proves that there are a lot of men who are not being completely honest about their sexual preferences," Rutherford said, "so this can only mean more men would be interested in gay products than we might expect."

Webb concurred, saying that "there are still an awful lot of gay men married to women," though he warned that a retailer thinking about introducing gay product should make sure the customer base is there. "You can't just put gay into a store and hope that the homos will come flocking," he said.

Interestingly, Webb added, women — both heterosexual and lesbian — comprise 8-12 percent of Titan's customer base.

As the adult industry melds more and more with mainstream entertainment and the gay community is viewed as an important market segment — even Wal- Mart recently entered a partnership with the National Gay and Lesbian Chamber of Commerce — the gay adult market is coming into its own. "It definitely has generalized itself in the marketplace but has maintained a nice exclusivity" based on quality and price, Janet of Pulse Distribution said.

As with any business, it comes down to the bottom line, Webb said: "Stores need to carry and sell gay because it's a sizable niche in the overall market, and they can make money from it."