LOS ANGELES — Backlit by clear blue skies and a sweeping panorama of the L.A. cityscape, Vivid founder and co-chairman Steven Hirsch sat with XBIZ founder and publisher Alec Helmy in the penthouse ballroom of the luxurious Andaz, for a first-ever Icon Interview attended by adult industry veterans and newcomers.
After praising Hirsch for his extraordinary career, as well as his dedication to the Free Speech Coalition, both through financial generosity and personal involvement, Helmy examined how Vivid distinguished its brand early on. The most apparent distinction was its product art, which Helmy described as "miles ahead of the competition in terms of polish."
Hirsch attributed the unique look to "really talented people" he hired, especially an "art director who had never done adult before" and was thus able to offer "a totally different take" that was not "influenced by what had already been done."
"He was really good, and he sort of helped to give us our look, and we had an exclusive photographer, so between the art director and the photographer, we helped define who we were… and we would shoot box covers over and over," Hirsch explained.
The interview then shifted to the state of adult DVD sales. “People have been claiming that DVDs are dead… they’ve been talking about it for over a decade now… so, what’s your take on the continued mass release of DVDs, how many years do you expect it to continue?" Helmy asked.
“I think we’re just about done, in my opinion," Hirsch stated bluntly. "We don’t put out very many DVDs, when the cost is more than the revenue, then it will ultimately be over… I think we’re seeing the end of the DVD business." He pointed out how video stores have slowly transformed into "adult boutiques" with only "10 or 15 percent of their inventory" being comprised of DVDs. To Hirsch, the end of DVDs is a natural sign of technological progress.
"I mean, VHS killed adult theaters and DVD killed VHS and the Internet killed DVDs and free porn killed the Internet and that’s just in the last 30 years," Hirsch observed wryly. "So, I mean, this is just the evolution of an industry. And it’s not that much different than what we see happening in Hollywood."
Pivoting to the topic of online content production, Helmy probed Vivid's business strategies during the 90s, especially after the advent of the Internet. Hirsch characterized his company as being "the first production studio that was really out there" and underscored their rapid proliferation of Vivid pornography by putting "every single movie up, every single picture up, every single behind the scenes, every single interview up."
"So, we had a massive amount of content and I mean, that was the Wild West of the Internet," Hirsch said. "Talk about the good old days. I mean, that’s where a lot of people were making a lot of money."
Helmy then asked Hirsch about the biggest challenges Vivid has faced in competing online, to which Hirsch immediately offered a response centering on the dynamics of free porn.
"If something is free, people are much more lenient, right?" Hirsch replied. "So they’ll allow for a lesser quality. They’ll allow for older content. People don’t care because it’s free. So you really have to come up with unique and interesting content consistently, to be successful on the Internet."
He thinks "the way that we get traffic has also changed," making Vivid more reliant on "organic traffic" in the face of the competitive affiliate marketing landscape. "It’s much more difficult to get traffic," he admitted, "so it’s certainly not easy, but smart passionate people can still make a go of it."
“But, the idea of giving away free porn to entice customers has been a part of the online business model since day one, so do you believe it was bound to spiral out of control the way it has?” Helmy inquired.
"I believe in looking forward and not looking back," Hirsch responded optimistically. "And I believe that there is a place for tube sites if they’re used properly and for us that means putting up clips. Now, we put up clips that are no more than 5 minutes, they’re not full scenes, they don’t have endings and that’s part of it, but it doesn’t really matter because we’re competing with people who put up full scenes, so in my opinion it would work out better for everybody if we just went back to putting clips up, driving that traffic to pay sites."
He acknowledges "it would be better for the tube sites" as well, because "they could act as the affiliate" and receive payment "for the joins that we got." By reining in the length of free porn, Hirsch foresees a strong outcome for both tube sites and producers. "So, in my opinion, there’s still a way that the traditional websites could be profitable, but it’s not going to be easy, it’s going to take effort."
Helmy changed focus to Vivid's celebrity sex tape business. “Vivid has established itself as king of celebrity sex tapes," he said. "Are these sex tapes a revenue driver for Vivid… what can you tell us about how much the business relies on them?”
Nodding, Hirsch noted that celebrity sex tapes have proven very lucrative for Vivid, generating "great revenue," but that their infrequent nature means they cannot be relied upon too often. "Kim Kardashian was a whole different animal and in its own way, sort of broke the Internet and broke the celebrity sex tape business wide open," Hirsch said, comparing its historic impact to the Pamela Anderson and Tommy Lee sex tape. "We sold millions and millions and millions of subscriptions and tons and tons of DVDs. It’s by far the most successful thing we’ve ever done. And, you know, helped launch a family dynasty."
Fast forwarding, Helmy said, "Let’s talk about the present. How would you sum up the current state of the industry?"
"I think it’s challenging," Hirsch said. "I think it’d be hard to disagree with that. This statewide measure on mandatory condoms. It’s an election year. And I think we’ve seen traditionally during an election year, we’ve seen prosecutions ramp up… so I think the industry’s going to have to deal with that on some level. And then of course just surviving out there. But there are people surviving… it’s not a layup like it used to be, but it can happen."
"What do you see as the next bright spot for adult?" Helmy asked.
"Well, I’ve always been a big believer in people want to be entertained, so give them interesting, compelling content and they’ll watch it," Hirsch replied. As far as virtual reality, he still figures people are more inclined to take off their glasses for porn, rather than strap on goggles. Hirsch reminded everyone that "3D" was the buzzword years ago, but eventually faded away. Cams, however, is an area of the business where he sees great potential.
"I’ll also say that the cam business is just going to keep getting bigger and bigger, because as people cut the cord and as your TV is Internet connected as it is now, I think that people will really enjoy watching cams on their big 70-inch TV screen," he said.
Helmy then guided the interview towards future prospects, asking Hirsch how adult can ensure its long-term success.
"Well, I think the first thing we should do is… look at the tube sites and say okay, they’re here to stay," Hirsch stated. He foresees them eventually running low on content due to less porn being produced, which could prove problematic since there is "an awfully big beast that needs to be fed every month." Studios and tube sites can overcome this pressure by working together, since "it's in everbody's best interest" to do so.
Lastly, Helmy asked, "What advice would you give entrepreneurs today who want to go into the business?"
"Well, you have to be ready to not make much money… so you have to be really really passionate about what you do… and understand that it might not happen, but you just have to be in it and enjoy the journey," Hirsch soberly advised. "Because chances are you’re not going to make $100 million being in the business so you have to love what you do."