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Adult Seeks Financial Lifeline

12 Jan, 2009 By: Erik Gruenwedel

Brother, can you spare a dime for … porn?

Other than the apocalypse, adult entertainment has long been considered immune to societal and economic hurdles, including the current recession.

That layer of invincibility is apparently weakening due to an onslaught of content, much of it free, on the Internet. Despite generating $12 billion in revenue in 2007, sales of adult DVDs fell 22% in 2008.

Now Joe Francis, CEO of Mantra Entertainment and creator of the infamous “Girls Gone Wild” DVDs, and Larry Flynt, publisher of Hustler magazine, are asking the new Congress to provide a $5 billion financial bailout (“to see us through hard times”) for the adult entertainment industry along the lines of what is being sought by U.S. automakers.

"Congress seems willing to help shore up our nation's most important businesses, we feel we deserve the same consideration,” Francis said in a statement.

Flynt even suggested Americans are too stressed by the economy to be sexually active. He said a federal stimulus to the adult industry would help rejuvenate the American libido, not to mention his bottom line.

No doubt lighthearted, the ploy does underscore the capricious nature of adult consumers, more interested in easy access and quantity than quality of the product.

Indeed, it’s estimated that roughly 50% of all Web users visit adult sites, with the number of unique visitors to adult sites (including GirlsGoneWild.com and Hustler.com) growing to more than 75 million per month.

Steve Orenstein, president of Wicked Pictures, said DVD sales of his larger budget productions, The Wicked and Fallen, continued to do well despite the economy.

“For 30 years in this business, I’ve used the term recession-proof on many occasions,” Orenstein said. “Unfortunately, the current economic situation makes it impossible to say this business is still recession-proof. Everyone is feeling it on some level.”

Veteran performer Stephanie Swift said the declining quality of content also contributed to the general malaise in adult entertainment.

“There are too many girls in the business who don’t care what they’re doing,” Swift said.

At last week’s AVN Adult Entertainment Expo in Las Vegas, exhibitor attendance was down 11% and fan attendance (those who paid the $80 entrance fee) was expected to fall as much as 20% after the final tallies, according to spokesperson Sean Devlin.

The show, which attracted 25,000 visitors in 2008, generates 90% of its traffic from walk-in registration, compared to pre-registration.

“With [the concurrent Consumer Electronics Show] reportedly down 22% in attendees, that impacted us,” Devlin said. “That’s a very significant potential audience that just wasn’t in Las Vegas this past weekend.”

As a result booths were smaller, Devlin said, with some previous solo exhibitors sharing spaces and giving away fewer freebies.

“That’s how exhibitors saved money this year,” he said. “Considering the economy and the state of the industry, we feel pretty good about the show.”

So did FyreTV, a Miami-based distributor of subscription-based ($9.95 monthly) adult streamed content through a free proprietary set-top box.

After sharing a booth last year, Fyre hosted a larger stage presence this year, complete with live shows and a MC to showcase its new wireless “BoXXX.”

Fyre founder and CEO Estefano Isaias said the wireless innovation resulted from beta tests that he said revealed that most users have Ethernet access in their living room or office, but not in the bedroom.

"That is where they generally prefer to [watch adult content],” Isaias said.

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