LOS ANGELES — On the eve of the adult industry’s traditionally busiest conference and awards season, CNBC has asked adult’s top leaders to weigh in on the state of the business and what’s in store for 2014.
A virtual who’s who of adult’s major players, including XBIZ President and Publisher Alec Helmy, Vivid Entertainment chief Steven Hirsch, Wicked Pictures’ owner Steve Orenstein, and New Sensations’ owner Scott Taylor, voiced their opinions and concerns about the industry’s constant challenges and pitfalls, as well as some optimistic predictions.
Helmy said, "My general impression is the industry has bottomed out. Companies have figured out how to change their business models to sustain profitability. In terms of the number of players, it's at an all-time low, but those who have survived are obviously the stronger breed."
Companies that diversify and expand with new business models and new revenue sources like pleasure products are likely to be the winners, according to the report.
Vivid’s Hirsch pointed out that the traditional DVD business is all but done, but noted that his company’s revenues are still strong despite a tough year.
If diversity is the key to survival, then Vivid may just be the bellwether. The company continued releasing its bread-and-butter celebrity sex tapes, launched Vivid Radio on SiriusXM, and licensed its name to a number of gentlemen’s club in what was from all accounts a tough year for adult.
Adult’s HIV scares and resulting production moratoriums were also spotlighted as more obstacles to overcome, and as Helmy pointed out, strong companies adapt to the challenges — and are the ones that remain standing.
Wicked's condom-only policy helped the studio weather 2013's production hits.
"When you have three moratoriums in a year and you eat your cache of movies, it has an effect," Orenstein said. "Obviously, there's nothing that has happened in the last year to change our decision to stay with condoms. If anything, it has solidified it."
Pointing to Manwin’s (now MindGeek) acquisition of RedTube last summer, consolidation of smaller companies and buyouts could also be on the horizon for adult, according to some CNBC insiders.
Kassia Wosick, assistant professor of sociology at New Mexico State University, who valued the industry’s worth at between $10-12 billion said that 2013 forced adult to take stock of its business models and the general “moral atmosphere,” but thinks “2014 might be the year the industry comes together."
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