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The Truth About California's Adult Entertainment Industry White Paper 1999

The Truth About California's Adult Entertainment Industry White Paper 1999
Dear Legislators:

On behalf of the adult entertainment industry's trade association, the FREE SPEECH COALITION, we offer you our 1999 White Paper entitled "The Truth About California's Adult Industry." Our report is a combined effort of industry representatives in an effort to inform you about the actions and workings of California's multi-billion dollar adult entertainment industry. We shall entertain many of California's most basic questions about adult industry.

But first, what does this report cover? Past White Papers have specifically addressed motion pictures, live entertainment and health issues in the industry. This year, we provide information on the "adult" portion of the Internet and discuss the "mainstreaming" of the adult industry also.

Initially, we need to define just what "pornography" is. Legally, the word "pornography" has no meaning whatsoever. As defined by the United States Supreme Court in Miller v. California (1973), "obscenity" is not a synonym for "pornography." Pornography is communication fully protected by the First Amendment. In fact, Webster's dictionary defines pornography as "writings, pictures, etc. intended primarily to arouse sexual desire." Therefore, much of society's poetry, music and any other art forms can be interpreted as "pornographic." Obscenity is material outside of the protection of the First Amendment, criminalized by California and Federal law.

Unfortunately, prosecutors and other would-be censors often use these terms interchangeably, creating a false image - an image that more often than not insinuates (if it does not claim outright!) that "pornography" involves children, violence and/or rape. As regards the legitimate adult entertainment industry, this is completely untrue and unfounded. By the actual definition of pornography, everything from adult movies to Calvin Klein ads to Tom Jones songs could be deemed "pornographic," simply because all could be seen as "intended primarily to arouse sexual desire." This is a far cry from the rigorous, three-tiered obscenity standard required by the Constitution. The erotic entertainment provided by the adult industry may be dismissed as obscenity by some individuals; yet it is not necessarily obscene simply by the nature of its sexual content. That is why Henry Miller's Tropic of Cancer, James Joyce's Ulysses and the film Carnal Knowledge were all initially convicted as obscene by courts, but all of those rulings were reversed on appeal.

While community standards play a significant role in determining what is legally obscene, just because one community is offended by a book or film does not render the communication illegal. Indeed, not withstanding the extremely conservative standards of certain communities, less than one-tenth of one percent of all commercial adult entertainment has ever been charged as being obscene. Moreover, most of those titles would not even be accused of obscenity in 99% of the rest of the country. Remember, despite the misuse of the term by the media, as well as some legislators and prosecutors, "pornography" is legal; "obscenity" and "matter harmful to minors" are not.

We have prepared this report to dispel other myths and replace them with facts, in the hope that this material will be used as an educational tool and provide insight into an industry regulated but seriously misunderstood by government. In this report, you will find specific information about the following aspects of our industry: I. Industry Statistics \nII. Employment \nIII. Underage Workers and Child Pornography \nIV. Content and Consenting Adults \nV. Working Conditions \nVI. The Adult Entertainment Industry and Insurance \nVII. The Adult Entertainment Industry and HIV \nVIII. Substance Abuse in the Industry \nIX. The Myth of Rape and Sexual Abuse \nX. The Internet and New Technologies \nXI. The "Mainstreaming" of Pornography \nXII. Legislative Proposals

\r\nSincerely,

\r

\r\nFREE SPEECH COALITION \nGloria Leonard, President \nJeffrey J. Douglas, Executive Director \nKat Sunlove, Lobbyist

I. INDUSTRY STATISTICS

The information used in the video portion of this report is derived from several sources: a survey of 5000 retailers who answered an annual national questionnaire composed and analyzed by Adult Video News (AVN), the trade publication of the adult video industry, with additional information provided by Paul Kagan & Associates and the Video Software Dealers Association (VSDA), the trade association for the entire home video industry.

The VSDA estimates that over 60,000 retail outlets in the United States carry home video. Adult video cassettes, laserdiscs and DVDs are carried in over 25,000 retail outlets across the United States, including such major chains as Virgin Megastores, The Wherehouse, Tower Video, Palmer Video, Movies Unlimited, West Coast Video and others. In addition, hundreds of small boutique and large mail order companies sell adult tapes, laserdiscs and DVDs directly to consumers. Further information came from a special survey of mail order and Internet content providers.

The information used in the dance sections of this report is based on statistics collected from targeted cities and specific clubs. Performers have also provided input.

VIDEO:

FACT: In the United States in 1998, adult video rentals and sales made up 28.9% of the video market in stores which carry adult products, for a volume of over $4.1 billion. This figure includes transactions in retail outlets but does not include mail order. Nearly 34% of the nation's rental and sales transactions involving adult tapes took place on the West Coast, with more than half of that in California!

FACT: In stores in the Western Region of the United States (California, Arizona, Oregon and Washington), adult video made up 35.6% of the sales and rentals in stores that carry both general release and adult video. This means that many if not most video retailers depend upon adult product to stay in business.

FACT: Approximately 2800 retail stores carry adult video for sale and/or rental in the State of California. The average store in the State of California stocks over 700 different adult tapes for rental. This excludes tapes stocked for resale.

FACT: During 1998, in the United States, stores reported a total of 686 million rentals of adult tapes, more than three-quarters of which were produced in California. Nearly 110 million of those rentals took place in the State of California. If each of those rentals were for one day only, a minimum of $27 million sales tax dollars would have been generated for the State of California. This excludes any tax generated by purchase, or additional money generated by multiple rental days!

FACT: The wholesale sales value of tapes sold to retailers from distributors in the United States in 1998 totaled $819 million, with over $120 million in wholesale sales to retailers in California.

FACT: Pornography produced here in California is the most sought-after in the world. In Europe, where the distinction between "adult" and "mainstream" is not as pronounced as in the U.S.A., California based artists and their products are in great demand. At the Cannes Film Festival, for example, California adult movies are regularly the top award recipients of the Hot D'Or awards. The AVN Awards, which annually honor the finest adult films and videos, are the subject of intense international interest and acclaim.

FACT: At the national video conventions, such as the Consumer Electronics Show, Video Software Dealers Association Show and the East Coast Video Show, attendance at the "adult" portions is extraordinary. Tens of thousands of people visit the adult sections each day. It is typical that the adult section reaches the maximum allowed capacity, with thousands of people waiting outside. At the East Coast Video Show, the adult section is a favorite not only with the attendees. When the adult section was held in separate quarters one year, the "mainstream" exhibitors complained strenuously because of the fall off of interest in their exhibition.

DANCE:

FACT: In the exotic dance arena, there are an estimated 7500 full-time dancers with another 5000 part-time.

FACT: Dancers run the gamut from students to single mothers to exotic dance professionals. What do they all have in common? They enjoy the financial independence and the excitement of erotic dance.

FACT: There are over 175 legally operating dance clubs in California.

FACT: The dance industry creates over 20,000 jobs in California, while providing almost $1 billion in revenues.

FACT: The dance industry brings in an estimated $500,000 to local governments in much-needed tax revenue, most of which goes towards law enforcement.

FACT: Much of the dance talent has the opportunity for job promotion and thus income expansion in other adult entertainment areas.

MAIL ORDER:

FACT: Mail order provides a means for distribution of adult products with minimal intrusion into the community, and substantial privacy for the consumer. A survey of mail order providers conducted by the Free Speech Coalition established that in 1998, there was $200 million in adult video sales, plus additional millions in sales of magazines, lingerie and novelties. The sales of these products generate tax revenue and employment in California which sites most of the product manufacturers.

FACT: Mail order and related shipping in California generates so much revenue that following the U.P.S. strike, the U.S. Postal Service assigned a special sales staff to encourage the adult industry to keep using the U.S.P.S.

INTERNET:

FACT: The Internet, or more specifically, the World Wide Web provides a new medium for the distribution of adult products, information and services. The FSC survey reveals at least $875 million of video sales, plus incalculable hundreds of millions spent on retail sales of adult-oriented products other than video, as well as memberships and services such as teleconferencing, chat rooms, e-mail, and other information services.

II. EMPLOYMENT

VIDEO:

Adult products are often the primary profit center for non-chain video stores. Adult videos carry higher rental fees, rent for longer periods, and are more likely to convert to sales. Without adult product, many of California's 2800 retailers that carry adult videos would not stay in business, costing Californians thousands of jobs.

The adult video business is made up of producers (who create product), manufacturers (who duplicate and distribute their own products as well as other producers' product), wholesale distributors, retailers (including Internet sites) and mail order companies. In California alone, AVN has identified 175 manufacturers, each of whom employs an average of 16 employees, making for 2800 jobs. An additional 60 wholesale distributors and mail order outfits exist in California, with an average of ten employees each (600 jobs). Moreover, these figures do not include the numerous California producers and publishers of adult magazines, novelties and websites, all of which are economically significant industries in their own right.

In February of 1997, US News & World Report stated that adult entertainment was estimated to be an $8 billion economic giant. AVN and other industry professionals estimate that the figure is at least $2-3 billion higher than that.

Several hundred performers residing in California are employed in the adult movie industry, as are thousands of technicians, directors, editors, producers, makeup artists, art directors, designers, photographers, line producers, lighting technicians, cinematographers, artists, computer experts, camera operators, caterers, drivers, janitors, builders, Foley artists, musicians, etc. Each of these employees pays state income taxes.

Many of the fine technicians and artists who work in the "mainstream" entertainment industry have previously worked behind the scenes in the adult movie business, showing that the adult industry provides a training ground for people wanting to work in Hollywood. Many continue to work both in mainstream and adult productions.

DANCE:

FACT: Many entertainers earn 5-6 times the state's official minimum wage.

FACT: Dancers choose their own working environment and work schedules, many times opening their own businesses.

FACT: Dancers enjoy a level of financial independence not found by women in other areas.

FACT: Female dancers earn 3-4 times the amount of money earned by their male counterparts.

INTERNET:

FACT: California leads the country in hosting adult websites.

FACT: These are sources of high paying, technically sophisticated jobs. Furthermore, young entrepreneurs are attracted to these businesses because of the low capital investment for start-up. The adult website industry keeps these creative, talented people in California, and attracts similar technicians and entrepreneurs from around the world. Each website generates more employment in the shipping industry, and many provide employment for models and dancers, and provide new means of distribution for photographers and graphic artists.

III. UNDERAGE EMPLOYMENT AND CHILD PORNOGRAPHY

VIDEO:

Congress has found that commercial child pornography does not exist in this country. In the 15 years that Adult Video News has been published, it has never received one tape depicting child pornography. The regular, commercial adult movie industry, operating in California (and in all 50 states) employs only consenting adults over the age of 18 and produces material for consumption solely for consenting adults over the age of 18.

Since 1990, the FREE SPEECH COALITION has worked with the Federal government to create a workable regulatory system designed to prevent minors from working in the adult entertainment industry. That law [18 U.S.C. §2257] requires, in essence, that no one can work in the industry without having copies of their passport or driver's license, and a declaration under penalty of perjury of their age and true name, on file with the production company's custodian of records, and available for inspection by law enforcement. When fraud perpetrated by underage performers has been detected, it has been dealt with immediately, and tapes containing underage performers have been immediately recalled. (See Legislative Proposal #1.)

Additionally, the FREE SPEECH COALITION offers a reward of up to $10,000 for information leading to the arrest and conviction of anyone involved in production or distribution of child pornography.

Those who would censor adult material always lump mainstream, Constitutionally-protected adult materials together with child pornography (as well as obscenity, violence or matter harmful to minors). The media often takes such a connection as fact and consequently reports incorrect information to the public. It is a fallacy that those who operate production and distribution businesses in the adult industry also traffic in child pornography. No one from the modern commercial adult industry has ever knowingly been associated with the manufacture, distribution or sale of material depicting children.

Indeed, when testifying before an Assembly committee, attorney Jan LaRue of the California Law Center for Family and Children, an expert anti-pornography advocate, testified that there is no connection between child pornography and the modern adult entertainment industry.

DANCE:

In the dance and theater circuit, most jurisdictions, entertainers must show proof of age via California or U.S. identification cards. Additionally, some cities and counties like San Diego and Sacramento are about to or have established requirements for the licensing of exotic dancers.

Dance clubs also provide additional sources of employment for the stars of the video industry. These stars perform as headliners in the clubs, bringing in hundreds of thousands of fans, annually.

IV. CONTENT AND CONSENTING ADULTS

VIDEO:

The content of every single adult tape manufactured by the legitimate adult video industry on the shelves of every video and adult store in the nation involves only consenting adults. Roughly 90% of the material produced and distributed over the past 14 years contains mainstream sexual acts (oral sex, anal sex, group sex, etc.). Adult movies do not contain rape, coerced sex, sex with animals, violence, incest or child pornography. The other 10% of the material available is classified as specialty material (i.e., foot fetish, tickling fetish, bondage, spanking, etc.) which does not contain explicit sex, but which still involves consenting adults.

DANCE:

All dancers are of legal age and are recognized as consenting adults based on documents which are required to be presented to the club by the dancers themselves.

V. WORKING CONDITIONS

VIDEO:

Like all motion pictures, adult movies are shot either at a soundstage or a location. Performers ("Talent") are scheduled to appear when they are needed, so although some shoots may take more than eight hours, talent is rarely on set for the entire duration. As in mainstream Hollywood movies, adult productions employ production managers, assistant directors, production assistants and other production personnel not only to make sure the shoot is proceeding as planned, but to take care of the talent as well. Catered meals and snacks are served at regular intervals, and scheduled breaks are provided, as well as facilities for the talent to rest and take care of personal hygiene, which is also of the utmost importance when shooting sexually explicit entertainment.

The FREE SPEECH COALITION has put thousands of hours and the majority of its financial resources into talent support services. A health and welfare corporation, called Protecting Adult Welfare Foundation (P.A.W.) wholly owned by the FREE SPEECH COALITION, was established to manage the talent services previously undertaken by the COALITION. P.A.W. operates a peer counseling hotline staffed by experienced members of the adult community, who have been trained by a licensed psychologist. This service has been in place for over five years, and has helped hundreds of industry members to deal with substance abuse, depression, relationship problems and the full gamut of stress-related issues. Likewise, P.A.W. runs educational seminars, offering assistance in estate and pension planning, tax preparation, health education, sexually-transmitted disease (STD) testing, life skills and other support services for the male and female actors in the industry, and is currently seeking access to a credit union for industry personnel.

In 1998, an independent non-profit entity was spun off from the FSC. Dedicated to providing direct medical and psychological services to the adult industry and others, the Adult Industry Medical Healthcare Foundation (A.I.M.) provides a committed, "one-stop shop" for medical testing, health and safety education, 12 step programs, relationship counseling, tracking for HIV and STD testing, as well as support for condom use.

This is yet another example of the modern adult entertainment industry taking care of its own.

DANCE:

Working conditions at gentlemen's clubs vary depending on the age of the facility and the philosophy that the club embraces. In most cases, the clubs are well-lighted, adequately protected by house security, and are tastefully and in some cases lavishly decorated. These clubs have top-of-the-line sound and stage lighting systems, and the entertainment provided is on par with what you might expect at Las Vegas cabaret shows.

As a result, most of the entertainers work on stages, under bright lights, dancing to rhythmic music (usually of their own choosing). They are protected by in-house security at all times. Now that the FREE SPEECH COALITION offers its members health, dental, vision and life insurance, the number of insured dancers is growing.

VI. THE ADULT ENTERTAINMENT INDUSTRY AND INSURANCE:

One of the great accomplishments of the FREE SPEECH COALITION is the availability of the full range of insurance to adult entertainment industry businesses and individuals. As recently as three years ago, no insurer was interested in providing insurance to the industry. Not only was health insurance simply unavailable for actresses, actors and dancers, production insurance for movie-making and even premises liability insurance for warehouses and retail outlets was either unreasonably expensive or utterly unavailable.

Now, all forms of insurance are available, with excellent benefits at reasonable prices. Most exciting of all, members of the FREE SPEECH COALITION have available to them dental, vision and health insurance of the highest quality. For health, we offer not only a PPO policy through Blue Cross, but also an extraordinary HMO policy. The HMO is extraordinarily comprehensive; its services and prices are equivalent to that offered by the Screen Actors Guild. Furthermore, the policies are underwritten by manufacturers through a 4% employer payroll contribution. This means that an actor or actress working several times per month (as is the norm) can get health insurance free!

The long-term significance of this cannot be over-emphasized. The availability of quality insurance in our country often impacts life expectancy and the quality of life. Under these policies, early detection of health conditions and preventive treatment, as well as treatment for drug and alcohol problems, will be a mainstay of the lives of the actors, actresses and dancers, to say nothing of the lives of retail employees, warehouse workers and others who could not get access to insurance.

A fundamental mission of the FREE SPEECH COALITION is to improve the quality of life for those people who earn a living in the adult entertainment industry. The effort to provide access to insurance to thousands of people previously without ready access is an accomplishment to be most proud of. It reflects both an industry which is maturing and the recognition of that maturation by the insurance industry.

VII. THE ADULT ENTERTAINMENT INDUSTRY AND H.I.V.

The adult entertainment industry has reacted with remarkable responsibility to the tragic arrival of H.I.V. into the community of adult actors and actresses. Despite the fact that the on-set practices of the industry, as well as the testing programs, delayed the advent of any H.I.V. infection for over 15 years, in early 1998, five members of the community tested positive for the disease. Enlisting the extraordinary guidance of retired actress Miss Sharon Mitchell, a certified chemical dependency specialist, and street-gang and H.I.V. counselor (and founder of A.I.M.), the FREE SPEECH COALITION and its health and welfare affiliate, P.A.W., enlisted internationally-recognized researchers and treatment specialists to create a state-of-the-art testing program.

Every 27 days, each and every actor and actress voluntarily tests for the presence of H.I.V. in their blood by means of the newest, best test available, the PCR-DNA test. Compliance with the testing regimen is nearly universal among performers. These artists have accepted responsibility for their own health - and they inspect certified copies of each other's H.I.V. tests before performances.

It is the ultimate measure of the success of our program that no performer has tested positive for H.I.V. in over a year. There are very few if any industries that have had similar success.

Equally importantly, the industry is addressing not only the health of its performers, but also the health of its audience. many of the major manufacturers of adult motion pictures have announced a policy of accepting only all-condom sex scenes in their productions. Moreover, they are supported in this effort by most of the largest wholesale purchasers of adult tapes. The wholesalers have pledged to give preferential treatment to condom-only productions in their sales effort.

This commitment reflects concern not only for the health of the actors and actresses, but also concern for the health of the scores of millions of people who comprise the adult entertainment audience. An entire generation of the population has learned about sex through the industry's products and services. While adult entertainment is undeniably fantasy material, the major manufacturers recognize that their products represent sexual role modeling for the world. The presence of condoms throughout sexually explicit productions is a great step forward.

VIII. SUBSTANCE ABUSE IN THE INDUSTRY

Substance abuse has a negative impact on all sectors of business productivity in the United States, and the adult entertainment industry is no exception. It is the industry's policy, however, to ban the use of all drugs and alcohol on production sets and in gentlemen's clubs, and to provide an opportunity for counseling and therapy for those industry members who find themselves with a substance abuse problem.

Often, information on industry members' abuse problems comes from other performers or producers who are as concerned about the health integrity of their industry as they are with creating entertaining product. Again, such self-policing measures often prove to be a reliable safety net beneath the industry's other safety policies. The industry has numerous recovering, sober veteran performers who provide support, education and intervention when talent is determined to have substance abuse problems.

Through the efforts of the F.S.C., P.A.W. and A.I.M., the finest quality services are readily available, exceeding anything offered by any other media industry.

IX. THE MYTH OF RAPE AND SEXUAL ABUSE

A common fallacy is that adult entertainment activities like dancing and movies lead to rape. It is likely that the opposite is true. As part of just one of the U.S. Government's most thorough and in-depth investigations into pornography, a study was conducted of a broad sampling of felons in the U.S. penal system which charted their exposure to sex education as well as sexually explicit materials. The results paint a picture that clearly refute the pornography/rape connection. The highest incidence of exposure to adult material was found to be among non-sex-crime related offenders, while rapists, child molesters and other sex-crime offenders showed a preponderant lack of exposure to sex education, sexual experience, and sexually-related materials.

Decades of psychological studies (none of which were sponsored by, nor were in any way conducted by or associated with the adult industry or its members) have established that it is the inability to fantasize that is connected to the violent acting-out of sexual assault; thus confirming the accuracy of the homily that rape is an act of violence, not of sex.

The conclusion, then, could easily be reached that lack of sexual education and sexual outlets like adult videos, dance clubs and magazines lead to the ignorance, anger and frustration that may prompt sex-related crimes. This conclusion is supported by the dramatic reduction in sex offenses in Scandinavian countries following the decriminalization of sexual materials in the early 1960s. Clearly, then, the viewing of sexually explicit materials is a source of sexual fantasizing for the consumer and not an impetus for rape.

Another misconception about the adult entertainment industry is that women are coerced against their will to perform. The truth of the matter is that the talent in the adult industry, both female and male, solicit their own work, and most are represented by licensed and bonded agents. In fact, many more women want to work in the adult entertainment industry than the industry can accommodate.

Performers often give their own input as to how a scene will be played out, and also have the option of working with the partners of their choice. They are never forced or coerced into working with anyone. No substantiated report of coercion within the industry has been made in over 20 years. There is not one actress or dancer in the contemporary adult entertainment industry who has been made to perform an act against her will.

X THE ADULT INTERNET AND NEW TECHNOLOGIES

An industry dominated by California technology, technicians and entrepreneurs, adult websites provide new mechanisms for access to adult products, information and services. Websites are less intrusive than retail outlets, providing even more privacy than mail order services. The adult side of the World Wide Web is responsible for the commercial development for many of the "new technologies" such as teleconferencing and "streaming" video. This is consistent with the historically significant role played by the adult industry as a testing ground for the most innovative entertainment technologies. For instance, the home video industry was driven by demand for adult product. This trend has repeated with the digital media, such as laserdiscs and CD-ROMs. Now we see this occurring again with DVD, high definition television, and high speed Internet access devices such as cable modems, ISDN and ADN. This is a source for the best kind of investment, technical development, entrepreneurship and employment - all based here in California, especially in the San Fernando Valley.

All responsible parties want to create effective mechanisms for keeping minors away from inappropriate materials on the Web. The adult industry is in the forefront of this effort. Commercial websites need customers who have disposable income and the credit cards to pay for products, information and services. Minors (who lack all these qualities) represent unwelcome traffic, consuming valuable bandwidth, without any payoff for the website.

Of course, the industry creates these products, information and services exclusively by and for adults. The commercial reasons to prevent minors from gaining access are emphasized here solely to establish that there are practical as well as altruistic reasons to keep minors off adult sites.

XI THE MAINSTREAMING OF PORNOGRAPHY

It is noteworthy that the adult entertainment industry, as well as sexually explicit product itself, has become increasingly admitted into "mainstream" culture and institutions. Recent hit movies, such as The People vs. Larry Flynt, Boogie Nights, and Orgasmo, all depict the adult industry in considerably more balanced fashion than has occurred historically. The critical reviews of 8 Millimeter reflect an increasingly common understanding that there is no connection between the modern commercial adult industry and violence, coercion or criminality.

Increasingly adult actors and actresses perform in mainstream Hollywood features and related entertainment. Many major manufacturers are being integrated into the rest of the entertainment world. Vivid Video, for example, is in the forefront of a new "product placement" trend, having already broken through other historical barriers by having billboards promoting their product lines on prestigious Sunset Boulevard.

The adult industry's charitable activities are beginning to be noted. The adult industry has made important contributions to the fight against breast and ovarian cancer through its participation in the annual Revlon Run/Walk For Women.

The adult industry has also historically been generous in support of the Pediatric AIDS Foundation, and one actress, Rayne, has been extraordinarily committed to charity, organizing and hosting charity events for needy children.

The barrier separating adult entertainment from the rest of the entertainment world is crumbling. Besides theatrical releases and direct video release titles emphasizing sexual themes, cable television has embraced ex

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