Websites an X-rated headache
2008-01-12 20:51
Las Vegas - After years of booming
sales supported by videotapes, DVDs and the internet, the adult
film industry is being challenged by easy video-sharing websites offering explicit content for free.
"We're dealing with rampant piracy, tons of free content,"
said Steven Hirsch, co-founder of privately held Vivid, the
best-known studio making sex films.
Vivid once earned 80% of its roughly $100m a
year from DVD sales, but last year that fell to 30%,
Hirsch said.
The internet challenge, a topic of discussion at the
biggest adult film expo of the year in Las Vegas this week, has
already presented itself to the music industry and other
mainstream entertainment.
Much of the internet competition for the US porn world,
largely based in southern California, comes from websites like
Toronto, Canada-based XTube.com, whose format is modelled after
Google's YouTube.
Some of the videos on the XTube site come from commercial
studios while others are posted by amateurs.
"We're not pirates. We are providing a service that people
think they can use to pirate," said Lance Cassidy, one of
XTube's founders.
The website has 200 000 free videos, typically 30 seconds
to two minutes long, and about one percent of visitors buy DVDs
or video streams, resulting in millions of dollars of annual
revenue, sales director Curtis Potec said. About two thirds of
XTube's viewers are gay, Potec said.
Vivid to sue video-sharing sites
"We've had tons and tons of people tell us this is the
future of the adult industry," Potec said. "Most of the money
is ads, on any site, mainstream or adult."
Scott Coffman, president of Adult Entertainment Broadcast
Network in North Carolina, says his company started a
YouTube-type site a year-and-a-half ago to generate revenue
through advertising and drive traffic to pay-per-minute sites.
AEBN limits free clips to three minutes. Users make about a
quarter of them.
"They don't convert that well when you give away so much.
There is a fine line between giving away something small, a
teaser ... and giving away the whole thing," Coffman said.
He said his company has revenue of about $100m a
year and is facing a lawsuit from Vivid accusing AEBN of
piracy.
Vivid's Hirsch says he will sue other video-sharing sites.
"This industry is going to have to get together and look at
these guys that are putting out the stuff for free ... so they
are going to have to get in line and start paying for it,"
Hirsch said.
"If that doesn't happen and we see all of this free content
out there, people are not going to be able to afford to produce
movies anymore."
Aided by porn studios
Videotape, fewer prosecutions, DVDs and internet
advertising created an unprecedented boom the US sex film
business since the 1980s.
Many studios post short clips on internet video-sharing
sites as advertising to sell more movies.
"This is something we constantly discuss in our office. Is
it too much," said Garion Hall, chief executive of
Abbywinters.com, an Australian company featuring lesbians.
Hall said only one out of 500 viewers clicks over to his
site from free clips and of those only one in 50 subscribes.
Some adult industry executives say a solution may lie in
future distribution deals with big companies such as AT&T Inc, Verizon Communications Inc, Comcast Corp and Apple Inc.
An Apple spokesperson said the company would not comment if
it had held past talks or was interested in distributing adult
product. A spokesperson for Comcast, the largest US cable
provider, said the firm offered adult content in its
video-on-demand service but said she knew of no talks for
mobile adult distribution.
Sales of sex films to mobile devices occur in Europe but
have yet to take off in the United States.
"We won't make money through adult content," said Verizon
Wireless spokesperson Ken Muche.
AT&T did not comment.
Jay Grdina, president of ClubJenna Inc, a division of
Playboy, says sharing previews is a mistake. "We're getting
bitten by our own sword," he said.
Grdina, former husband and on-screen partner of Jenna
Jameson, one of the industry's most famous porn stars, said he
has met companies such as Microsoft and Apple to seek wireless
and other distribution deals that could allow easy downloads to
devices such as iPods.
A spokesperson for Microsoft said they were not in talks to
distribute adult content.
"The revenues are massive," Grdina said. But "the biggest
fear is share price: what are the shareholders going to say?"