"Now I've been dragged kicking and screaming into the Internet business," Stagliano said, "when I was quite successful just selling pieces."
The mixed feeling Stagliano has about the effects of the Internet on gonzo reflects a fairly general opinion among the pioneer producers of this adult genre. Quite simply, everyone is trying to adapt to a playing field that is in constant flux — especially for the veteran producers who are not so computer-savvy.
Stagliano formed Evil Angel in 1982 as the name of a small adult newspaper he began publishing that year. A year later he produced his first video under the Evil Angel Productions umbrella and formed it into a manufacturing business in 1989. The big change came that year with his first "Buttman" movie.
"They credit that movie with starting gonzo," he said, "because I did something a little different with that first 'Buttman' movie. That was called gonzo because there was recognition of the camera by the performers. That was the original definition of gonzo. Now it seems to be something else."
What gonzo has become today is a ubiquitous presence on the Internet, which seems to have been made for that type of content, according to Stagliano.
"There's a lot more gonzo-type things being shot because the Internet format is just to focus on the girl and the sex," he said. "There almost is none of the longer, more elaborate scenes and much less story on the Internet than there is in regular movies. At the beginning I had a lot of story in my gonzo scenes, but back then gonzo had a different definition and a different market."
The chief result of gonzo's online proliferation is intense competition for the Internet customer. New companies are producing gonzo content every day and the number of new movies released each month is mind-boggling, according to people on the affiliate end of the business, like John Desjardins, director of online operations for Evil Angel Cash.
"From a marketing standpoint, the flood of product is the most important thing," Desjardins said. "People are shooting gonzo out of their houses. When I think gonzo I think of someone just grabbing a camera and shooting people having sex. And when the Internet came, amateur websites are what followed. People surfing just wanted to get to the good scenes. So the Internet provided a way to get gonzo out there on a massive worldwide level. And now with video-on-demand you can distribute it faster."
David Joseph, president of Red Light District, agrees that the Internet's chief effect on gonzo production has been to increase the product and the competition drastically. As head of one of the more established production houses, Joseph admits that he was amazed by the sudden changes in the marketplace.
"My brother [Dion Giarusso] and I started putting gonzo online five years ago, and people saw the success we had," he said. "The companies already in gonzo when we started — Evil Angel, Anabolic, Diabolic and one or two others — were the only competition then. If you look at how many gonzo companies started before us, and how many started after us, the increase is unbelievable. Basically, anyone can do it."
Along with the explosion of free content online, Joseph claims there are other factors that have changed the gonzo landscape. He believes there may be as many as four times more manufacturers today than there were just a few years ago.
"Everybody who picks up a camera thinks they can start a porn company," he said. "And when every distributor supports them it takes away from the pie."
Although individual company profits online may be shrinking, the Internet has had an unexpected effect on gonzo distribution, too, and it's not all detrimental. In the past year a fair amount of Internet companies have moved into DVD distribution, which has resuscitated flagging DVD sales.
"It's a new phenomenon," Stagliano said, "and a problem if you're in the brick-and-mortar business like I am. It's competing the prices down. At the same time, it's an opportunity for me to sell my stuff on the Internet. It's just a shift in the market, from a time when DVDs and VHS were pretty much the whole porn market, to where now the Internet is accounting for about half or more of the total porn dollars.
"But it's a lot easier to sell movies in the form of a DVD than it is to market a website, which is a complicated process. Companies like mine and Vivid made so much money just selling pieces, and now we're getting severe competition from companies that are much more savvy on the Internet, which is a different and more complicated kind of business to run."
The overall picture of gonzo DVD sales is not as bleak as it sounds, however, because people buy as many or more DVDs than ever before, according to Joseph.
"It's just that the pie is being split up among more companies," he said.
Despite all of this, Stagliano believes that those who predict the imminent death of DVD gonzo content due to online competition are just not facing the facts.
"The Internet still does not compete with the DVD as a delivery system," he maintains. "It's still easier to look at a movie on a DVD than it is to download it on the Internet. Most people still don't have computers hooked to their home entertainment systems, so they can only watch DVDs on their big screens. And even when Internet-ready TV happens in three to five years, the delivery system still will involve a download and carrying capacity, so the product won't be as easy to view as a DVD.
"Maybe someday these drawbacks will be overcome and finally make the DVD irrelevant, but I doubt it. People still want to have that product in their hands, and not have to deal with electronic media. Also, Internet content shot in high definition will have a horrendous download time."
Like Joseph, Stagliano admits that the Evil Angel sales are "down a bit, which I attribute to the Internet and the expansion of the business in general. But we're still doing fine." Desjardins corroborates this, saying, "Our sales are not hurting. The revenue streams are just coming from somewhere else now. It's just a new way of doing things."
It's a sign that, even the older companies that were less skilled in the online arena have begun to adapt successfully to the new business models of Internet marketing.
"We've made some moves in the last couple of months," Joseph said. "Our Internet site, ClubRedLight.com, is a brand-new state-of-the-art site that we think is one of the better ones out there right now. People who want to pay are getting good content on that site. And as for DVDs, we're going with some new packaging ideas. We're going to try to give the end user a little more. We hope this will allow us to take a little bit more of the pie."
Evil Angel also is adapting to the Internet, initiating a process of re-encoding its movies for placement on its own VOD site "because formats change all the time on the Internet," according to Stagliano.
"We're also redesigning our paysites," he said, "and we'll launch those in the coming months. With better quality images and a larger on-screen picture, we should be doing well on the Internet when all that is launched."
Another form of adaptation for the gonzo producers has a very dark side. The Internet has bred new ways of scamming companies unfamiliar with the online terrain. Stagliano refused to go into specifics, except to say that his company has been burned in the past.
"The Internet is populated by more people who are willing to rip you off," he said. "I've heard a lot of stories about people in my business trying to set up websites and getting ripped off. The people who put together the Internet, who do the encoding and the marketing, know things that we older guys who run the video companies don't know. So it's easier to figure out ways to embezzle or steal money than it is in the standard market of selling DVD pieces. The Internet is a business that has its own expenses, and some people pad the expenses and buy stuff for themselves. They also can pay suppliers more money than what they're supposed to be getting paid, because a business owner like myself doesn't know the market price for that particular service."
The Internet not only has taught gonzo producers to be more wary, it also has caused them to change the way they shoot content today, according to Stagliano. His early "Buttman" movies always contained at least the vestiges of a story line, which he claims has disappeared from today's gonzo videos.
"The question is, how much effort has been put into telling some kind of story, and on the Internet, it's virtually none," he said. "There are very few edits in an Internet scene, whereas an old 'Buttman' scene might have had an elaborate story." Joseph, however, claims that the Internet hasn't changed at all the way Red Light District shoots its gonzo content.
"We move with the times, whether it be HD or something else," he said, "but we still shoot things with an eye toward quality — good lighting, good sound, good box covers."
Red Light District hasn't changed its distribution strategies in this online age either. The movies debut on DVD and do not appear on the Internet until 30 days later.
"I know everybody says that online customers and DVD customers are two different buyers but I'm not so sure yet," Joseph said. "I don't disagree with it, even though we're still holding back. It's just that right now it seems to work for us to hold back for 30 days. Our DVD sales are still very good."
Looking to the future of gonzo online, Joseph foresees changes in content delivery centering on new and improved iPods. Stagliano, on the other hand, predicts that online gonzo will move toward smaller and smaller niche groups.
"Like, you can do a whole site devoted to women in bare feet crushing bugs," he jokes. "There's a demand for it. It may only be 20 people, but those people are willing to pay $100 a month; so you can do your site, because there's a delivery system now that makes it economical to have a small customer base and still be able to make money. On the Internet it's relatively cheap to do a lot of specialty sites that would be too costly to put on DVD. The market has really changed in that respect, and that specialty stuff is much more prevalent."
Looking to the future may be the sworn duty of company owners, but some of the veteran gonzo producers can't help but gaze upon the past with some nostalgia, because it was a time before the Internet complicated everything.
"When we started, there were just a few of us in the company," Joseph said. "I was in the warehouse, doing the shipping. My brother did the sales, and Vince Voyeur handled part of the production. It was easier then than now. It's just a different time, a whole different world."