These days, the average consumer of adult material has a lot to choose from. The market offers up a multitude of pornography, from high end, High Def features to good old low-rent smut. The enthusiastic filth fan can pick from sex acts of all types, and — courtesy of the constantly advancing tech world that sleeps about as much as rust — said content is available in a wide array of formats.
So, all of that’s a good thing, right?
Maybe not. The astonishing amount of adult product has created a glut of material that’s threatening to choke DVD sales. “It’s tough out there” is a common lament of late from adult salespersons — even those for some of the higher end companies.
Are we speeding toward an international porno industry free-for-all that’ll leave only the best companies standing? Is it capitalism run amok? Or is it simply a case of the industry hitting a speed bump in the natural progression of the business?
Pure Play Media Sales Manager Craig Jelin has kept close tabs on the situation.
“Product is still the priority of any business,” he said. “The content of the product, the quality of the product, everything involved in that. It's still going to be the key component for selling in the marketplace. What's good for us is good for widgets. That's the key thing.
“You start with the right product, you start with the quality product, do everything you're supposed to do to produce a good quality product and produce good content, and have a brand that has appeal in a marketplace that is saturated with every type of merchandise or concept ever thought of. It starts with the studio; it starts with the brand; it starts with the production value of what you're doing. All these things are key in today's marketplace.”
The sheer speed of the growth of the adult industry has certainly had a major effect on the current marketplace.
“How many startups of new DVD companies were there last year?” queried Jelin. “What is it like, 150 new startups or something? That's a lot of people producing product, and not necessarily good product, but that's a lot more product fighting for that shelf space. Working on a lot less margins than companies like myself and other companies have to work on. We have fixed costs that we have to meet. It’s a little different working in your garage than working in a structured corporation.”
The challenge of the micro production company has had a ripple effect not only among adult producers, but distributors as well. Kim Gallagher, National Sales Manager for International Video Distributors backs the trend up.
“My biggest problem is that there are so many new companies coming out, and stores only have a limited budget and a limited number of pieces they can buy each week, so trying to gain market share is very difficult,” she offered. “It’s difficult to make sure the stores you're dealing with are getting the top products from the top companies.
“At this point, all of the new releases that come in are put up on my Website every day, and stores can log in and order what they want. They're kind of doing so without the guidance of a sales rep. So really all these new companies that are coming out, they have to make good box art.”
But, from the distributor’s perspective, it’s not all bad news.
“In some ways, it is very good because we have so much product,” she said. “Stores that can stock many copies and many things, it's great for them because they get to try a lot of new products, but most people are on budgets, and have only so much space that they can put new products in. That’s where it becomes difficult.”
But what about the retailer? The brick and mortar establishment that actually deals one-on-one with the consumer. Tom Berger should know; he’s CEO of Fairvilla Megastores, a Florida-based, three-store chain.
“We've done some of our own studies, and I'm not really sure I'm willing to accept the standard answers or excuses,” he offered. “There comes a period of time where there obviously has to be a saturation point to the market. Whether or not we've reached that saturation point, I think, has an awful lot to do with marketing. You can't just count on people turning 18 every day and buying product.
“Our competition isn't just with the DVDs,” he continued. “I think there's some things happening with distributors selling out to selling large libraries for streaming videos, and I think certainly Vivid's latest deal [the company’s download-and-burn offer] has an influence, where the manufacturer is going into direct competition with the retailer. I think those are questionable influences in the flow of the market. I think those are some problems.”
Berger sees the problem as not being confined to adult.
“It isn't just the choice of entertainment within the adult entertainment world that we're in competition with,” he stated. “It's the plethora of entertainment and entertainment values which are accessible throughout all of the electronic medias.”
Berger added, “I think the problem is that in our industry we sat back for a long time and haven't talked about marketing and haven't thought about marketing. If we don't create any excitement in the retail environment, we have no one to blame but ourselves if they decide to go buy a DVD online, or download flash porn for their iPod.”
Howard Levine is National Sales manager for massively successful Vivid Entertainment, a company he said whose bullish Vivid Girls sales have yet to be touched by the wretched excess.
“I think that there's a proliferation of cheap product out there, but it doesn't really affect the good features that are out there,” Levine agreed. “Our sales on the Vivid girls stuff is pretty steady. The sales on the Tera Patrick stuff is way up. The sales on the Jenna stuff has not gone down at all. I do large numbers out the door.”
Levine backs up the notion that the individual consumer can’t be ignored. This is, after all, a living, breathing entity with the ability to reason, not just a statistic on a flow chart.
“I think people are getting sick of the low-end stuff. The people that sell stuff for a dollar sell it to everybody for a dollar,” he said. “If you buy the stuff for a dollar, and you put it in your store and try to sell it for $10.95 or $12.95 or $15.95 and your customer comes in and sees it at $12.95 and actually buys it, and then decides to get a pack of cigarettes or a pack of gum at the local liquor store, or gas station down the street and sees the same stuff in there for $3.99, then they're not coming back to your store.”
The fact that some brick and mortar operations stock inferior/cheap product is “a major problem,” Levine offered. “They can't get the price for it anymore, and the customer is a little bit more savvy than he was a couple of years ago.”
Increasingly, the whole thing boils down to plain old shelf space.
“I have to believe that irrespective of how much product is produced, in reality is there's so much shelf space available, that's not gonna change,” agreed Pure Play’s Jelin. “Universal retailers are shrinking. Again, you have competition from the Internet in terms of other content that's available or entertainment that's available in the adult industry. And all these things are obviously going to continue to have a factor on the amount of product that can get into the marketplace.
“Ultimately, I have to believe that the people that are producing the right content, the right product, producing quality product, is ultimately going to survive.” The road to survival is paved with discount porn, Jelin stated.
“It's like a Kmart sale: 10,000 pieces for $8,000 dollars. What the fuck? Throw in the other mediums, the overall accessibility of adult oriented entertainment, and everything has an impact. Every damn thing is impacting the DVD business as we know it and have known it.”
And, according to Levine, that includes what’s happening at the pump.
“I think the thing that really is hurting, more than anything else, is the gas prices,” he stated. “A guy that had that extra 20 or 30 bucks to spend, he's getting his six pack of beer and his pack of cigarettes — that’s not going to stop — and he's got to fill up his car. He doesn't have extra money now. He doesn't have the extra dollars to go buy a DVD.”
Again, it all goes back to the little man, the humble, hard-working masturbator in search of self-recreation.
“That's our core customer, that working guy,” admitted Levine. “That's a problem for him. I don’t think people have stopped shopping. People really love the shopping experience. It's just getting to the store and plunking down your extra bucks, and gas at $3.50 a gallon hurts.”
Gas aside, how will porn in great numbers and the fast-moving technical innovations affect the future of adult?
“If you look at companies, I guess Vivid is an example of a company that is looking at a new channel of delivery, which is a direct to customer source of distribution,” said Jelin, referring to Vivid’s newly-announced Burn-to-DVD program. “You have to look at these new channels and maybe think that ultimately they could have an impact in terms of new distribution.”
“Will it replace lots of brick and mortar stores? Will that be the substitute for that loss of business?” asked Jelin. “Personally, I don't think so, but who knows? Let's just say that that particular method of distribution, if it is viable, is a fairly long time away. But maybe not. I'm just saying you look at what some studios are doing, you look at the marketplace, and you start to think to yourself, what do you need to do to be competitive in this marketplace?”
Levine makes it even simpler:
“I don't see good product as going away. Good product still sells. Product that sells, sells.”