Friday, Jun 20, 2008    Text size: 

LOS ANGELES — Adult DVD sales were slumping prior to the U.S. economy’s recent dive. Once hailed as a recession-proof industry, clearly many studios are feeling the squeeze and are tightening their belts — and checkbooks.

Now, mainstream is picking up on the sales slump.

Hollywood’s B2B bible Variety wrote, “The drop in porn rentals and sales is worrisome on several fronts: Till now, porn has been a recession-proof business. Further, with the country already in a dispirited mood, the fact that porn has gone limp may indicate a true plunge in consumer confidence.”

Some industry insiders are confident that the current state of sales and production is only cyclic. And as with many industry shakeouts the most creative, high-quality companies will be the ones left standing when the ground stops shaking.

“Like any industry that reaches a certain level within the marketplace there are shakeouts from time to time,” Adam & Eve Founder and President Phil Harvey told XBIZ. “We’ve reached a point where the industry is releasing about 15,000 titles a year and that appears to be all that the market can bear.”

Harvey’s company has enjoyed success in novelty toys and adult production for more than 30 years. On the upside, Harvey said Adam & Eve is still producing VHS tapes, a sign that old content delivery methods aren’t 100 percent dead.

A number of companies who offer a diverse portfolio of products have managed to maintain a steady stream of revenue — even as sales of hard goods yo-yos.

“The state of the nation, the war, across the board — people are effected by these things. People aren’t purchasing anything beyond necessities and when you add in the glut of free porn the buzz about the industry downturn is true. But we’ve had a phenomenal year,” Digital Playground’s Adella told XBIZ. “There will always be a need for adult entertainment. Companies need to focus more on production value. This downturn will force studios to clean house.”

Digital Playground has recently been in the news for its commitment to produce Blu-ray titles, a development that will keep them ahead of the curve as the new market develops.

“One thing that can help retail stores is to stock Blu-ray product,” Dan M, sales manager for Anabolic Digital, told XBIZ. “This is a format and quality that can’t be bootlegged or illegally downloaded. It’s an invaluable investment for a company that allows a healthy profit margin.”

Gonzo production house Anabolic Digital has released a series of Blu-ray titles and plans to release additional titles from its back catalog.

“From our end, things are steady because when a certain area of business is down another is up,” continued Dan M. “We’ve seen an increase in sales, not a phenomenal amount, but we are in the steady side of up. We’re releasing two new titles every month. We produce great content and we have two of the best directors in the industry — Ivan and Tony T.”

Even diehard industry veterans are feeling the pinch.

“Yes, there is a recession,” Wicked Pictures Vice President of Special Projects Joy King told XBIZ. “I think we’ve definitely experienced a slowdown over the last six months. When gas prices hit $5 dollars a gallon the average consumer’s entertainment budget has to be adjusted.

“This is going to be a difficult time for the industry. The most important thing for companies to do right now is to stay focused and stay true to your company’s mission statement. The industry has tendency to tear themselves apart and a lot of people are hurting right now,” remarked King.

To help combat slowing sales, Wicked has released some of the company’s best-selling titles in combinations packs. According to King, these blockbuster combo packs have sold very well.

“Releasing a product like this helps us move product without spending money on new productions. By doing this we’re maintaining the quality of our products. We’d never jeopardize the quality of our movies,” King said.

Despite instilling new marketing strategies and cutting costs where possible, some industry insiders believe the online offering of free adult content has helped contribute to the problem.

“I don’t blame gas prices or the economy for the recent downturn,” Jeff Mullen president of X-Play and All Media Play told XBIZ. “I blame the glut of free online porn. It is the biggest problem facing the industry, without a doubt. Unless we address the issue of free porn we are all in trouble.

In order to combat a constricting market, Mullen has tapped the vein of mainstream kitsch and is known as the adult industry’s go-to porn parody man. Through production house X-Play, Mullen has successfully released “Not the Bradys XXX” and the “Britney Rears” series. He’s currently editing “Not the Bradys XXX 2” and “Not Bewitched XXX.”

“We’re continuing to sell large amounts of our movies. And one of the reasons for that is we don’t allow our movies to be shown for free anywhere,” Mullen added. “All we have to do is look at the music business in the 90s and we would’ve learned what our fate is going to be.

“Every producer in this business should be pissed off about the glut of free porn,” added Mullen.