Mainstream Takes Notice as Adult Companies Diversify

Jan 20, 2012 4:00 PM PST

LAS VEGAS — Adult companies are changing the way they do business and mainstream has taken notice.

In a recent Las Vegas Review-Journal article, various adult entertainment company reps discussed their plans to diversify “in order to stay viable and relevant” as “technology expands and the recession takes its toll.”

The report notes that as it becomes more difficult to profit from traditional pre-recorded adult entertainment offers, forward looking companies are finding niches they can fill.

For example, multiple XBIZ Award winner and BurningAngel.com owner, Joanna Angel, leverages her websites by selling branded merchandise and making paid promotional appearances.

“We’re trying to make our brand as strong as possible,” Angel stated. “Porn is not easy right now.”

“[Adult has] gotten a lot smaller. There’s not as much excessive money in the industry,” Angel added, noting that consumers have gotten much savvier. “The key now is you have to do everything. There’s no one thing that will make you money.”

Vivid Entertainment founder and co-chair, Steven Hirsch, explained that the company has branched out from its core DVD business to encompass new distribution channels, including mobile websites, in response to a five-year decline in DVD sales, dropping from 70 percent of Vivid’s revenue to 20 percent today.

For Vivid, the celebrity sex tape market is a primary focus, where licensing rights can exceed a million dollars.

“We go after every possible revenue stream available. The days of just producing a traditional adult movie are over.” Hirsch stated. “When it’s all said and done, those who are still strong will be left standing.”

Acquisitions are one way in which adult companies are diversifying their operations.

Such is the case of the recent Manwin buyout of Digital Playground, adding substantial new content assets to its impressive technological infrastructure and contributing to the company’s reported 10+ percent annual growth.

Technology also plays a role in shifting consumer demand to more live offerings as well as those targeting mobile platforms.

Pink Visual President Allison Vivas says that while the demand for mobile porn is on the rise, changes in technology do not mitigate the negative effects of piracy and tight credit, along with the glut of legal content freely available on the web. 

“It’s an interesting point in time for the adult industry,” Vivas said, explaining that the industry is becoming more mainstream while adjusting its business model towards more advertising supported free sites. “We have the perfect demographics for men’s products and our research says that our customers are looking for more mainstream advertisers.”

As for the live content arena, it’s another area that Pink Visual intends to target.

“We have never been heavy into the live stuff,” Vivas said. “But seeing as it’s a trend, we plan to get more involved in that.”

With the adult entertainment industry continuing its mainstream migration, it’s doubtless that other publications will take growing notice.

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