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Vivid Aiming for First-Ever Blu-ray Adult Title

28 Oct, 2006 By: Erik Gruenwedel

Vivid Entertainment earlier this year became the first entertainment company to offer download-to-own DVDs of its content playable on a standard DVD player.

The Los Angeles-based adult-entertainment giant, which helped make Jenna Jameson a household name, now aims to release the first adult title in either Blu-ray Disc or HD DVD in early 2007.

“We are very interested in [the two formats],” said Steven Hirsch, co-founder of Vivid. “While adult is always looked at as the new driver in technology, at some point it has to be affordable. [Blu-ray and HD DVD are] not there yet, although we are willing to take a chance because we feel the market will be very soon.”

Vivid produces about 60 new titles each year in addition to 24 compilation releases per month. With reported annual sales exceeding $100 million, it is renowned for using the old studio contract system, which includes employing nine female performers under exclusive contract.

Hirsch said cost could be an obstacle in releasing titles on Blu-ray, which would cost $50,000 per release for the authoring fee, compared to $10,000 for standard DVD. In addition, replication for Blu-ray is about 10 times the cost of a standard DVD.Hirsch said the average adult title sells about 5,000 units annually.

“If you want to be in that business, you have to take chances,” Hirsch said.

He said initial download-to-own DVD sales through a subsidiary of CinemaNow have been fine but “weren't off the charts.” Hirsch attributes this primarily to consumer comfort level with the new technology and the disparate nature between brick-and-mortar shoppers and Internet users.

“I think it is two different markets,” Hirsch said. “People who traditionally go into DVD stores aren't necessarily the people who feel comfortable downloading or burning content to a DVD.”

He said DVD continues to be the company's main revenue driver, accounting for 40% of annual sales. That percentage is down from 80% five years ago and 60% last year. Other revenue originates from cable TV, international, Internet and wireless.

“The DVD business is a very mature business,” Hirsch said. “It is a new-release business. Everyone has their catalog titles. There is still some residual business, but nowhere near what it was.”

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