The
current recession is proving extremely challenging for adult filmmakers,
who are not only wrestling with anemic consumer spending, they're also
competing with a nearly infinite supply of free, amateur videos from
countless user-generated sites, not to mention a glut of traditional
inventory.
This is the first time I can say that we're absolutely feeling the
effects of the economy, says Steve Orenstein, president and founder
of Wicked Pictures: There was a line we used to use about this
business being recession proof. When people talked about the economy,
we'd say our business is fine. But look, now you'd have to be blind and
deaf not to see that there are problems.
Orenstein hasn't cut any pictures out of the production pipeline -- he
still plans on making 48 films this year because, he says, cutting back
on pictures would only cut back on his profits. He is, however, looking
at ways to reduce expenses.
At the retail level, all the store owners I've talked to say their
rental sales are off 10 percent to 15%, says Paul Fishbein, founder
of Adult Video News, an industry trade group. Producers say sales are
down at least that much. We've identified the reasons we think sales are
down. First and foremost, there's a glut of product. The laws of supply
and demand have been turned upside down. We're on par to put out 15,000
new releases this year, which is just insane. Secondly, there's a battle
with pirated or free material on the internet -- much like the music
industry, adult [movie] producers are trying to figure out how to stem
free or pirated content.
We're finding consumers don't want to pay $30 or $40 apiece for DVDs
when they can subscribe and get DVDs in the mail. Prices are often
higher for adult DVDs, and sometimes people don't want an extensive
library of adult titles -- there are some movies that are great to see
once or twice, but you don't want to own it. It's really changed the
dynamics of the industry. Studios must innovate or start distributing
digitally, says Tony Medrano, vice president of business development
at SugarDVD.
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