Vivid Video's DVD sales are down 35 percent over last year, Chief Executive Officer Steve Hirsch recently revealed. That's disheartening for porn traditionalists, considering Vivid is one of the largest, most respected adult-content producers in the world.
The company generates roughly $100 million in annual revenue. Three years ago, 80 percent of that revenue came from DVD sales; now, the figure is less than 30 percent, Hirsch said. The good news is that Vivid's revenue from digital endeavors has picked up tremendously: The company's bottom line now is almost evenly split between websites, pay-per-view (television and online) and DVDs, with a small percentage coming from merchandising and mobile endeavors.
"The DVD market is holding up for us, but there's nowhere near the money from two to three years ago," Hirsch said. Fortunately, Vivid is doing "extremely well" on the Web. "Two months ago was the first time Internet sales were higher than DVD sales," he revealed.
Acid Rain owner Mitchell Spinelli has had a similar experience. "Three years ago, maybe 10 percent [of our revenues were from online sales]," he said. "Last year, it was 20-25 percent, and it keeps going up every quarter." That's why Spinelli is devoting a larger percentage of his company's efforts to digital, or "new," media.
Neither Hirsch nor Spinelli is ready to sound DVD's death knell, but Extreme Associates owner Rob Black is. He said "there's really no need to [follow the standard formula and] shoot six scenes and all that other stuff" and then tie everything together into a cohesive finished product. A younger, more tech-savvy audience - which grows every day - wants to consume everything, including porn, in small, bite-sized pieces. Young consumers also want it delivered to them wherever they are, whenever they want it, and frequently.
Black particularly likes the aspect of digital production that allows him to churn out content at a record pace. "I can shoot content on Monday and have it up on HotMovies by Wednesday of the next week," he said. That kind of turnaround, he noted, completely beats the pants off the months required to produce and distribute DVDs. Black said he doesn't even need to worry about repackaging Extreme's library of 400 to 500 titles into new DVDs to extend its life in creative new ways, since he can generate income from that content by uploading it to his own pay sites.
It's working so far, Black said, and within the next few years, he expects to be as successful online as Extreme was with DVDs in the 1990s.
Sadly, not everyone has had the same success or developed the same outlook. Although he once thought DVD enthusiasts were a dying breed and digital distribution would save the industry, legendary producer-director Andrew Blake reversed his digital-only course less than a year after he embarked upon it. The money isn't there yet, he said, but it will be one day - if the adult industry can solve the problems of cheapskate Internet users and scam-artist website designers. In the meantime, although he didn't abandon the online space altogether, he returned to the arena that always has represented his bread and butter: DVDs.
Increasingly, the term "digital divide" doesn't apply just to the gap between Internet-connection haves and have-nots. More and more frequently, it's being used to describe the flexible gulf between traditional and "new-age" pornographers. Some prefer tried-and-true real-world distribution methods, and some sing the praises of digital distribution, but most seem to remain firmly ensconced astride an imaginary fence that is becoming more rickety with every passing day. All of them make cogent arguments for their points of view.
In upcoming features, AVN Online takes a look at the situation from a variety of perspectives.
Art featuring Jenya and Liza courtesy of Met-Art
