Adult-entertainment industry fighting recession, Internet piracy

By Levi Chronister

Friday, Jan. 7, 2011 | 2:05 a.m.

During the past two years, the adult-entertainment industry was struck by a deadly combo — the recession and the rise of Internet piracy.

For many companies, including some of those exhibiting at this year’s Adult Entertainment Expo at the Sands Expo, the former issue has been easier to overcome than the latter.

“The sales definitely went down. The (video-on-demand) has picked up a little bit, but not quite as enough to make up,” Evil Angel’s Karen Stagliano said. “The last couple of months have been better than the same months the previous year. It’s looking like it’s going to be a little better than last year.”

If this year’s expo is any indication, the industry’s outlook is looking up.

Last year’s convention brought 28,000 fans to the Sands, while 30,000 are expected for this year’s event.

AEE spokesman Sean Devlin said that the number of exhibitors has increased from last year, as well. “Things are looking good,” he said. “We’re real happy with where the show is at.”

Production companies are starting to be happy with where they’re at, as well. While sales figures for many have yet to return to pre-recession levels, the future is looking brighter as the economy recovers.

One company that’s hopeful about 2011 is Pink Visual, which has turned some of its attention to options such as mobile websites and an iPhone augmented reality app in an attempt to give consumers a product that is worth spending their money on and more fitting for private consumption.

“We put a reasonable price tag on it — we’ve lowered our pricing for mobile versus web — and try to make our content more accessible in ways consumers want it, so that they can get into our sites from any device,” Pink Visual President Allison Vivas said.

“The mobile device also brings back the personal privacy level, because the family computer has really become the family computer, and the mobile devices are things that are more private and kept with a person at all times,” Vivas said.

Another way companies have tried to keep consumers coming back and paying for content is by living up to the old adage that “you have to spend money to make money.”

According to Joanna Angel, adult actress and owner of alt-porn company Burning Angel, rather than combating canceled subscriptions by cutting production costs or dropping membership prices, her company decided to offer even more content for its fans.

“We can’t lower our costs or we literally will go out of business,” Angel said. “We couldn’t do that, but we did — which was kind of silly as the economy was struggling — launch a bunch of new sites, which was a costly endeavor. So now when you join Burning Angel, you get access to eight different websites. We want people to feel like they’re getting a lot for their money.

“It’s really scary, but since we started updating the site more often and adding more content, we didn’t lose as many subscriptions as we might have,” she said.

Girlfriend Films also has decided to fight the recession by throwing more money at it. Company President Dan O’Connell said he doesn’t believe in taking the money the company makes and living the crazy lifestyle many may expect of a porn executive.

“We continue to grow, but I’ll always attribute that to our marketing and the details we put in our movies and our marketing and our PR efforts,” O’Connell said. “We’re spending more money in those directions, but it’s also increasing our sales. I’ve always been a guy who has believed in putting all the money back into marketing and PR and growing the company as opposed to taking the profits out and spending them with wild abandon.”

With revenue expectations looking up as the country continues to come out of the recession, these companies are beginning to focus on the second issue that has hurt their profits during the past few years — Internet piracy.

Evil Angel and Girlfriend Films each employ a full-time person to find pirated films and clips online and get them taken down.

Pink Visual also has focused on getting its copyrighted materials removed from free sites and is trying to help other studios learn what they can do to fight illegal downloading.

In October, the company hosted its first Content Protection Retreat to, according to the conference’s website, “bring together content producers and intellectual property rights holders to examine ways to combat content piracy.” It was such a success that a second retreat has been scheduled for February.

“It shed a lot of light on the education component,” Vivas said. “This industry’s a little bit behind. We still have studios that have to go through registering copyrights, companies that have thousands of productions and have spent millions of dollars in producing videos but have not copyrighted them. There are a lot of the basics that have to be done.

“From a success standpoint, I think we’re a fast-moving industry so within a year, I think most companies will be on board and value having an anti-piracy strategy and doing the basics to enforce their copyrights.”

Even having the basics taken care of doesn’t mean consumers won’t find ways to post and view movies online for free. Some people may never be interested in paying for the majority of adult films, but production companies are trying to make sure their products are valuable enough that consumers will be willing to fork over the spending money they do still have.

“You just really have to make sure someone would rather pay for your content than watch any other content for free, almost like a real movie,” Angel said. “I really want to see ‘Black Swan,’ and if someone said I could pay $8 to see it or I could get the new Fokkers movie for free, I’m really going to rather pay $8 to see ‘Black Swan.’