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July 28, 2014

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Q+A: Vivid Entertainment’s Steven Hirsch talks celebrity sex tapes, state of the porn world

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Steven Hirsch of Vivid Entertainment at the 2011 AVN Awards at the Palms in Las Vegas.

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Vivid Entertainment head honcho Steven Hirsch on Thursday, Jan. 12, 2012, in Las Vegas.

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Steven Hirsch of Vivid Entertainment.

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At this week’s invasion of porn princesses, their XXX-rated filmmakers and adult-novelty manufacturers for the annual AVN Awards and Adult Entertainment Expo at the Hard Rock Hotel, there is no sign that the billion-dollar industry is slowing down. It’s recession proof, with signs of growth.

To start our four-day overview, Steven Hirsch, founder one of the adult-entertainment industry’s most prominent companies, Vivid Entertainment, takes a look at the industry’s state and what he expects for its future. He talked with me while juggling his celebrity sex tapes and new network radio show and planning his big-budget movie releases at the annual Las Vegas convention.

Steven has just released his fourth-annual “Top 10 Hottest Couples” wish list of celebrities he would like to add to his successful Vivid-Celeb series, and he has the big-bucks budget to pay whatever it takes. Prince William and Kate Middleton have topped the list for the third consecutive year, followed by Katy Perry and John Mayer and Beyonce and Jay Z.

“The young royals remain our top choice,” he said. “Kate’s pregnancy and birth to Prince George only made the couple more popular. They project natural good looks and good health, and their stature on the world stage is unparalleled. We know our chances of getting them to star in a sex tape are slim, but that’s what wish lists are for.”

Vivid has amassed global sales of bestselling sex tapes featuring celebrities including Kim Kardashian, Pamela Anderson, Kendra Wilkinson-Baskett, Tila Tequila, Montana Fishburne, Chyna and, most recently, VH1’s “Teen Mom” Farrah Abraham.

His new list has Kim and Kanye West slipping to fourth place from second last year; Angelina Jolie and Brad Pitt have moved up from 10th to fifth; the Beckhams, David and Victoria, are new entries in ninth; and Ellen DeGeneres and Portia De Rossi are in 10th.

One of his biggest bets in the next month will be the opening of his Vivid Cabaret Club in New York for Super Bowl weekend with his porn stars hosting and dancing. He’s planning to roll out his “meet and dance with your favorite porn star” club concept across America.

I asked Steven, who arrives here today for 2014 AVN/AEE, to talk about the state of the adult industry, expansion plans and the future of porn.

Steven began, “The industry is changing, and this is the beginning of our 30th year in business. We’ve certainly come a long way from the days that we were peddling VHS cassettes out of a basement at the Chicago CES show to where we are now. DVDs, for Vivid at least, have become less than 10 percent of our business, so we’ve had to find ways to boost our income and move into different potential revenue strengths.

“Pay TV has had amazing success in a very short period of time. We have 60 million addressable homes here in the U.S. that carry Vivid TV or the Vivid video-on-demand product, and it’s growing every month. So that’s one way that we’re able to distribute our movies and get them out there that’s not by traditional DVD with all the illegal piracy issues that dented our business.

“We continue with our Vivid.com business, which has been successful and continues to grow. It’s certainly been impacted by the immense amount of free content out there, whether pirated or not. We’re still dealing with the free competition, but if we continue to produce unique content, be it celebrity sex tapes or our superhero parodies and keep it off some of these free sites, which is less difficult than it was a few years ago, then we can continue to build the Vivid.com audience.

“For us it’s important to continue to integrate all of our businesses together, whether it’s Vivid TV along with Vivid Radio, which was just launched a few months ago. It’s very exciting. We are the only adult channel on Sirius XM, which has over 30 million subscribers. It’s a way for us to promote the brand, promote everything else that we’re working on whether it’s TV or clubs.

“We started the launch of Vivid clubs; in Charlotte, and then a club in Miami, followed by L.A., and we will open the newest Vivid Cabaret in downtown Manhattan for Super Bowl weekend. It’s very rare that you see a new adult club open up in Manhattan, so we’re very excited about that. We’ll be bringing a bunch of new girls, Vivid will be broadcasting live, we’ll be filming for Vivid TV, and that’s really how I see the business going forward, by integrating all of these things together.”

Is the business bigger than it’s ever been? Is it diversifying because it had to fight piracy and expand again? Is it more mainstream? Is it more acceptable?

The industry is now more mainstream and more acceptable. More people than ever are watching and accessing adult content. Clearly there continues to be a huge amount of interest when it comes to adult content, a huge amount of demand. No question it continues to increase as people become more and more comfortable with adult movies. For the most part, people are at that point now.

In terms of being able to turn that into a viable profitable business, that’s a different story. I think what we’ve seen is that the traditional adult companies who produce movies, and in the past have put them out on DVD and that’s their main source of income, we see many fewer of those companies. They’ve either been consolidated or gone out of business.

We also see probably less than half the amount of movies being shot today than were just three years ago. That’s really a result of the producers not being able to figure out how to monetize their content. We’re seeing an immense amount of content on the free sites, although we’ll have to see in the future how that works since there are less movies being produced. At some point, that’s going to affect those free sites.

People have gone into the video-cam, live-talk Internet business, which is viable and growing with the girls running it from their homes. There are huge, huge companies that have sprung up from that. There’s still an adult-dating business from people are able to profit. The business has evolved and moved in different directions as traditional movies went way, way down from what it once was.

So as the business has slowed in terms of the number of XXX-rated movies being made overall, it has grown and expanded far more in a lot of other areas?

Yes. The interest continues to increase. It’s just where you’re seeing these movies produced is changing. It’s no longer the traditional shoot movies in the Los Angeles Valley, put them out there and sell them on DVD. Independent websites pop up all over the world producing their own content. People shoot in their homes, so you see a lot more homegrown movies than ever before.

They used to say that in tough economic times, the gaming industry was recession proof. Sadly, we’re still in tough economic times. Is the adult business recession proof?

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The adult industry is recession proof in terms of people always wanting to see adult movies. That doesn’t change no matter what the times are. But some people in the adult industry were left behind and their businesses suffered as a result of not knowing how to deal with free, how to deal with pirated content.

As a result, people faced difficult and challenging times, but people always want to see adult films in good times or bad times. People love other people to have sex; that never changes, so if you know how to deliver it, then you keep growing.

As far as the onscreen talent in the industry, just like the mainstream studios, there seems to be only a handful of girls who are the guaranteed box office winners, and you have most of them at Vivid.

Yes, I think that that’s true. It’s much more difficult now than ever before to break a new star. Before, we were able to sign a girl to a contract, shoot movies with her, we knew where to get distribution, where the maximal amount of people would see them, and it was a whole different ballgame.

Now, it’s much more difficult for a girl to become a star. Certainly not impossible, but today stars like Jenna Jameson on that level are few and far between.

The ones who are now in the business for quite a while seem to all be street smart when it comes to business savvy. It’s no longer just performing sex scenes. They’re writing, directing and using marketing know-how. Is the girl who goes into this business today a lot smarter, brighter and wiser than who they used to be when it was customers hiding in raincoats and undercover?

It depends on the girl. If the girl is getting into the business and she’s looking at it long term and she wants to make a career out of it, then she has no choice but to be able to go out there on the Internet to promote herself, let people know who she is and become well known so she can use that to parlay into all sorts of business ventures. It’s no longer just about making adult movies.

There’s films, there’s video camming, there’s dancing, there’s all of those things, and they have to be positioned in all of them to be successful. Some girls, though, just come in and just want to make movies. They make movies, they make some money, and they’re in and they’re out, and those girls will always be in the business. They’re not really interested in the long-term maintenance of an adult career.

You and I must surely know that the British Royal Family, even for $10 billion, won’t ever produce a sex tape for you.

Well, we don't know. When we put out offers, that’s one thing, and some of it is just to get attention and gauge to see if there’s any interest there. Realistically, we know that that’s not the case. Then there’s the issue of who would people want to see? What tapes would do the absolute best? Anything with Kate in it would do amazingly well.

We don’t really hold out much hope that the Royals would do that or somebody like Brad Pitt and Angelina Jolie and all the other people we put on our list, but we did that because we felt that those were the ones who people wanted to see.

MTV’s outrageous Tila Tequila is our newest celebrity. When we put out sex tapes, there are things that people do want to see. They’re certainly not on the level as some other stuff, but when you take someone like Tila Tequila, who has a built-in fan base, people want to see that. It’s a funny thing with celebrities, people feel closer to celebrities than ever before because of Facebook, Twitter, where celebrities can interact directly with their fans. We’ve really never seen anything like it; it’s amazing. They tweet what’s going on in their lives and as a result people feel much closer to them than ever before.

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When there’s an opportunity to see them doing something that everybody does, which is having sex, they’re really interested and want to check it out. I think a lot of it is as a result people feeling closer to these celebrities. The “Teen Mom” Farrah Abraham sex tape, which is amazing, became the coolest and most successful last year and she got million and millions of people interested in her. Now with this new Tila Tequila sex tape, which is just full of hardcore sex, people are interested, and if we’re able to get people talking about it or properly promote, then people will want to see it.

What do you think the business is going to look like a year from now?

In terms of Vivid, we want to continue to grow our existing businesses, integrate them all together where everything promotes everything else. That’s the sort of distribution side, whether it’s Vivid TV or Vivid Radio or Vivid Clubs or Vivid.com, we want all of our businesses to promote our other businesses. When it comes to the movie and content side of things, we want to continue to go out and find the most interesting celebrity sex tapes.

We did the Tila one, but we have several others that are ready to go. This will be a big celebrity sex tape year for Vivid, so we’re excited about that. We want to continue to create and produce interesting movies, and we will do that. We’re always looking for the next big thing.

How do you make actually make sex different? Or is it the one industry that you can’t upgrade, update and change?

We’ve seen the industry go through all sorts of cycles, romance movies , amateur movies, Gonzo movies, and then it was the super-nasty movies, but things cycle back, and people are interested in the romantic movies again. The other stuff is starting to gain some traction again. Ultimately, I feel the performers need to connect with the audience. If people feel like what they’re watching is real and that there’s something interesting going on there, then they’ll watch.

So it’s all about connecting with the viewer. In the old days, there was no Internet. Now if you make a good movie and there’s a girl and they’re really into it, it’s out there in 2 seconds. On the other hand, if you make a movie and it looks like the people aren’t really excited about doing it, that gets out there, as well. It’s all about that connection with the audience.

This year seems to be the first for AEE and AVN where you are screening movies, and the budgets for them seem bigger. Is this new movie “Underworld” that’s going to be screened in Las Vegas one of your productions?

Wicked has “Underworld,” and it’s supposedly excellent. Our movie is “Behind the Green Door,” which is the first remake of that classic film in over 30 years. That’s our big movie of the year with over 70 nominations, so we’re excited. Las Vegas will screen several movies actually.

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What you’re seeing is some really, really high-end movies being produced and a lot of low-end movies being produced, but your typical movie that you saw 10 years ago with five scenes and a $35,000 budget, you just don’t see those anymore. You see either very high end — that means well over six figures — or very low-end scenes being shot.

The whole business is a multibillion-dollar enterprise, one of the biggest businesses in terms of revenues in the entertainment world. There’s just a massive, huge demand for adult movies. People are more comfortable with their sexuality than ever before, and as a result they feel comfortable watching adult films; men who are alone or couples or even single women who are now going online and checking out adult films or watching them on TV.

How much money can a leading lady, a Tila Tequila, make in the adult business?

If you’re talking about just off a single-movie basis, it’s not all that much, but if you put together all of the opportunities, whether it’s owning your own website, doing your own camming, some of the girls can easily make a couple of hundred thousand dollars or even more per year if they put all the pieces together. Over the course of their career they can wind up as millionaires.

It’s not all that common, and the average girl probably stays in the business for a year or maybe a bit longer. Clearly, though, there are girls who have been in the business a lot longer than that, and those are the girls who are very successful. It’s one thing to make the money and another thing to keep the money and invest the money and use it as part of your future because being in the adult business doesn’t last forever.

Is your company just like regular companies always trying to expand operations with new product, new ideas and new ventures?

We do look for new and innovative ways of distributing our content. We try to stay on top of trends for movies that we produce or distribute. When it comes to distribution, we’re always looking for ways to continue to upgrade it. One of the things we’re focused on this year is over-the-top TV, which is when you buy a smart TV and the apps come up.

We would like a Vivid app to be part of that package. We have several of those deals done, and we will be launching them this year. When it comes to content, we say, “OK, what can we produce that’s different and not out there that people will be interested in?” That’s where we came up with the celebrity sex tapes and superhero parodies.

How has your business gone from being undercover to an accepted part alongside mainstream media?

Our society has changed. Thirty years ago, if you wanted to watch an adult film, you would go into a bookstore or an adult theater. Really the arrival of video changed that; what changed was access. When people could go into their local video store and rent a Disney video for the kids but also rent an adult film, that’s where people started to become comfortable with adult movies.

At the same time, what you would see out in the world whether it was a Hollywood movie, commercials or billboards, is that things became unquestionably more sexual. The Internet opened it up completely 24 hours a day, seven days a week. You can watch anonymously, and people really appreciated and liked that. It broke things open to a point where people don’t think twice about watching adult films. They no longer feel like people look down on them for it.

So what do you expect this week at AEE and AVN in Las Vegas?

It’s one of the times every year that the industry gets together and sort of takes stock of where we’re at. For us, it’s an opportunity to meet with our distribution partners and continue our business and have parties and have a good time. Ultimately, there’s always the award show. We always look forward to that and hopefully win some awards. I’ll probably even walk the red carpet!

Later today, our series continues with an interview with superstar porn actress, director and business mogul Jessica Drake. On Wednesday, rocker Phil Varone explains why he went full blast into the adult-video world here, and on Thursday, AVN Awards co-host Chanel Preston previews “the Oscars of Porn.”

Robin Leach has been a journalist for more than 50 years and has spent the past decade giving readers the inside scoop on Las Vegas, the world’s premier platinum playground.

Follow Robin Leach on Twitter at Twitter.com/Robin_Leach.

Follow Vegas DeLuxe on Twitter at Twitter.com/vegasdeluxe.

Follow Sun A&E Senior Editor Don Chareunsy on Twitter at Twitter.com/VDLXEditorDon.

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