In the immortal words of Hernando Cortez, when in Cancun, do like the Cancunians. Which in today's lingo could mean anything from shelling out 15 bucks for a hamburger (hotel rates) to $50 for a cigar (hotel rates) to who-knows-whatever for a margarita in the intricate American dollar/peso exchange. Then, again, one must be reminded that Cancun is a tropical resort, not a food stamp line.
The exchange of information, not pesos, though, was the objective of the First Annual AVN Industry Conference. After two postponements (including a lengthy delay prompted by a late season hurricane last year), the conference was rescheduled for early May at this lush oasis, which boasts the second most beautiful beach in the whole wide world - this, according to the Miami Herald - the first being somewhere in Australia. But since it isn't bloody well likely that the adult industry will exchange seasons and take a 14 hour plane ride for the privilege of calling one another cocksuckers on the other side of the world, one will have to take the Miami Herald's word for it.
The docket over the next several days would cover such subjects as piracy, lobbying, the distribution system, marketing and new technologies, particularly the Internet.
Host Paul Fishbein welcomed the contingent of manufacturers-distributors-retailers and attorneys who came from all over the country. Fishbein rationalized that if the record industry can deal with its problems in tropical settings, the adult industry can embrace a similar venue.
"The theme of the conference is change," Fishbein announced. "As we approach the year 2000, expect a new attitude toward the industry coming from the government. The retail market is changing. Mom-and-pop stores are closing. Zoning problems are affecting retailers who also have to weather new technologies like video-on-demand and interactive cable systems. Distributors also have to deal with the new technologies and producers have to get with the program. Producers can't just be content providers anymore, they have to be in control of their own destinies."
Attorneys Clyde DeWitt, Jeffrey Douglas, Paul Cambria (who would get his national exposure on Court TV later on via the Larry Flynt trial) and Bob DiPiano provided crystal ball predictions and tea leaf readings. DeWitt suggested that there stood a good chance of having a Republican president and senate.
"The Supreme Court is one-third divided," DeWitt said. "In three or four years with retirements and new appointments we could conceivably have Chief Justice Scalia." DeWitt wasn't exactly dropping his khaki shorts and firing rockets with the prospects of that scenario.
"On the up side, we've gone eight years without major federal prosecution," DeWitt continued. "Monica Lewinsky demonstrated to politicians that a sex scandal isn't going to turn around a presidential administration if there's no war and no depression. Lewinsky has de-sensitized the world about sexual things."
Jeffrey Douglas discussed the importance of not losing sight of the labeling law even though there has been "eight years of non-enforcement" of it. "An entire generation of this industry has thrived without federal prosecutions," Douglas said. "Even though that's amazing, the people in this room have to realize that the federal government is not your friend. This industry and the First Amendment are at odds, and the Internet is going to provide some interesting challenges to the notion of community standards." Cambria said the industry has made major gains, that there have been no major prosecutions and the proliferation of adult product has made for a more liberal climate.
"Jurors are more comfortable with the material," Cambria said, perhaps prepping himself with Flynt trial soundbites for Court TV. "The last line of defense is the jury." Likewise, Cambria threw cautionary comments in light of a possible Republican administration. "Then, again, it might be too late for [the Republicans].
"America has decided that adult material is okay," Cambria continued. "But those [in the industry] who get sloppy and cut corners will make it bad for the rest. Some people in this business still run their operations like Kool-Aid stands. The adult business is reaching a level of being a part of conventional business."
Cambria also addressed topics near and dear to retailers - particularly zoning and privacy issues pertaining to peep show operations.
"Some zoning cases have gone wrong because the lawyers didn't know what zoning's all about," said Cambria whose subtle message suggested that retailers find an attorney who's conversant with such things. "Whatever you do, go top shelf."
Bob DiPiano opened the floor to the discussion of content and the what-ifs, prosecution-wise, concerning pushing the envelope. One retailer mentioned that he maintains a full-time staff of three screeners to avert dire consequences.
"Shock for shock's sake gets boring," Paul Fishbein offered. "The consumer figures it out. There's something to be said for the marketplace figuring it out."
In a place where buccaneers' coves are tourist attractions, the second day's session of the AVN Cancun Conference got, poetically enough, to the issues of piracy. Attorney Jeffrey Douglas admitted that the Free Speech Coalition's efforts to curb piracy through Trademark Protection Services was a noble experiment that failed. Others have had better results, particularly IVD's Frank Kay.
"In New York [City] we were finding Falcon videos selling rather cheaply," said Kay. "We realized that the tapes were being duplicated and it was all happening out of New York. It was happening in pretty high volume.
"We hired an attorney named Jules Zalon," Kay continued. "He's done a fine job with this. About two years ago, we raided six stores in Manhattan. We had sheriffs, private investigators, myself and Zalon. We didn't shut down the stores but we shut them up for hours. We took boxes and boxes of property out. A few cases have settled and paid very large fines. A few stores have been closed up. One of the main suppliers' lab was shut down. He has since sold his lab to someone else. Someone else is doing [pirating] now.
"Recently myself, Steve Hirsch, Russ Hampshire and Command Video have filed suit against another place in Kansas City. This guy was duplicating 500 movies. They weren't just Vivid's or Pleasure's or VCA's. They were everybody's. But the four of us put down our money to hold him [Zalon] on retainer. We went in there with search and seizure. Sheriffs were there. At that point we busted these guys and closed them down.
"I think there will be some financial rewards with this case," Kay said, "but I don't think that's what this was all about. We were just trying to close him down and set some precedents that we were going to fight back against this."
Another issue addressed was piracy on the Internet. As facts are continually proving, not only are adult companies having their content duped and put on Websites, but companies are pirating adult tapes for mail order distribution, using the Internet to market illegally duplicated tapes. High-profile adult companies such as Vivid have also encountered problems with other URL's trading off their names.
"They're building their business on your product," said Vivid's Steve Hirsch. "People are using your [company] names to bring in traffic and taking your identity. You have to address this quickly and check out every variation of your company name that might be used on the Internet."
"When people are that bold you have to be aggressive," said Douglas. "If you sleep on your rights, you lose them. You have to be as knowledgeable about the Internet as the other guy or else you'll be outplayed, outstripped and left gasping. Internet pirates don't believe what they're doing is illegal or criminal. To them civil liability is imaginary. This is definitely a violation of intellectual property," Douglas said.
"There's a whole generation of lawyers now specializing in intellectual property. You have to have them to function. New technologies are creating new levels of criminality."
Attorney Paul Cambria said his firm has affiliated itself with an intellectual property lawyer who has 20 years of working with Disney.
"As we would have 20 years of experience doing obscenity cases, and know every little in and out," Cambria said, "they know every little in and out. It's very important to have the right team."
The subject of lobbying on a national level was also addressed. "In California we hired a lobbyist five years ago," Jeffrey Douglas said. "In the five years we've had a presence, it's extraordinary what's been accomplished," Douglas said. "But paying for litigation costs you many times what you would pay for a lobbyist. This is the best money you will spend, but we need to organize and spend it in lots of states. If there were lobbyists in each of the states and one in Washington D.C., we'd save a lot of grief. We need an outcome maker who has your best interests in mind."
AVN's Paul Fishbein said a lobbyist in Washington is a great idea. "It's obviously difficult. It's obviously a nightmare, but it's something that should be your goal."
The subject continued into the third day with debates about the industry having an active lobbyist in Washington, D.C. Bert Levesque, general manager of Zane Entertainment Group, made some significant points. Levesque was a former lobbyist in the oil industry.
"If you want to do this, you're looking at 2 to 3 million dollars period," Levesque said. "Believe me or not. I'm telling you what I know. I'm very passionate about this issue. If you want to broker time which we should, focus on local issues, state issues - you get into national issues, you haven't seen sharks until you've been to D.C. They will eat you alive and you will come out with nothing. That's a personal opinion."
An agreement was reached that attorney Paul Cambria and the Free Speech Coalition continue a search for a Washington lobbyist.
On the subject of Internet piracy, it was felt that resources and allies like webposse.com were invaluable and should be cultivated.
The respective roles of the manufacturer and distributor relative to product glut were also discussed. Attorney Clyde DeWitt took up on behalf of the retailers.
"Most of what I do is represent retailers, and retailers are the ones taking all the shit in this industry right now," DeWitt said. "Trying to get retail locations is impossible. I bet there's retailers who would love to open other locations but zoning prohibits it. The retailers are little people fighting against forces all over the place. They can't get stores opened, they can't expand their stores, they can't advertise. They can't even put signs up in some places except 'books.' And it's getting worse. Unless something is done to counter the force that's closing down all the retail businesses, what you're talking about is just going to get worse. You've got a glut of product, and you've got a ton of people who want to buy it and you got no store to go to get it."
"One of the biggest issues that retailers have gotten back to us at AVN," said Fishbein, "is limited shelf space, that the biggest problem they have is they want to keep a larger selection of adult material but have to get rid of stuff that may do well because they need more shelf space. Has anybody considered going to sleeve packaging, going to a more compact package? Everybody's afraid that if they do it, their competitors won't."
Fishbein's academic question drew the most heated response of the conference. "I got the biggest response from anything I've said... it's a joke," Fishbein laughed.
Goalie Entertainment's Eddie Wedelstedt took the podium and offered a stirring summation of the conference's discussions.
"The problem that you have in video today comes from this. In our retail stores today... movies are flat over last year at this time. Rentals are down... sales are down. We're no different from Blockbuster. Look at their figures from last year at this time. Blockbuster made a tremendous deal where basically the movie studios are financing their product. They're stocking their stores.
"Let's say there's 3,000 adult bookstores in America. I would say half those stores are stuck with the shelf life they have. They can't even move a wall. I'm not saying we're not making money, but we have to adjust, we have to do different things. All of a sudden, now, there's this thing out there called the Internet, and you're going to get fucked unless you do something now!
"There are guys who are knocking you off and selling your product. That's the competition for all of us. You need to join hands and look at this. We have to stop and think what we're going to do to protect us. It's time to stop the bullshit and sit down... in Texas, eight years ago, we got a lobbyist, and we beat laws before you guys did in California. But it doesn't come cheap. We [the old-timers] fought battles for a long time and expect to keep fighting them. You have got to have someone [a lobbyist] who everyone likes and gets along with, so they will chip in and work with that person."
As the sun sank slowly in the west and the weary travelers were getting ready to pack up for their relative destinations, the final day of the conference entertained topics from the floor. One addressed the role that Free Speech has played in garnering positive media support.
Paul Fishbein: "The Free Speech Coalition, for a relatively small amount of money, uses a PR firm to get media. You received tons of positive media this last year for the industry from local TV stations and newspapers. As a media contact, people will call me, and I'll say things like it's on cable TV, it's available on pay-per-view, a new generation of kids turning 18, etc. - most of the media is really positive. The wire service picks it up, and it goes out over the Internet wire services. Little bits of information sink into the nation's consciousness - positive, good information. The organization doesn't spend a lot of money.
"When the Sacramento stuff was happening the first time, we got tons of media. All of a sudden Nina Hartley and Juli Ashton are on national television fighting a certain bill. The perception of the adult industry has come around in the last 10 years."
The conference itself drew these kinds of reviews.
Ed Wedelstedt: "What we're trying to do here is make it so we can survive for the future. It was a good group here. We have to have a guideline where we're going to go and where we want to take this industry. We'll work on the pirating. It's us. We have to plan our own destiny, join hands and join forces so we can work together."
Steve Orenstein of Wicked Pictures: "It was great. I had my doubts coming in - 19 years in the business and I can honestly say that this time spent with this size of a group of people in the business feels really good. Usually you have a meeting for an hour. Everyone screams and says their piece and leaves. Here it was three hours, four days in a row, where things got a little chance to sink in. What comes out of it, we'll see when we leave. I think it's been very positive, I'll be anxious to see the next one."
Bernie Oakley of Adult Diary, Inc.: "I got to meet people that I didn't know I didn't know - there were figures in the industry here I never go to meet during the normal course of a convention. It's been great. I think just having the open conversation between people who are pretty strong competitors on a daily basis talk about common issues has really been good. I'd really be surprised if anybody could be negative about this conference. I agree having it this far away completely cut you off, so we could sit here and concentrate on what we were doing - and then have some fun at night."
Retailer Bill Murphy of the Fairvilla stores in Florida: "It was a very good experience to get everybody in the same room so they could look each other in the eye and say what they wanted to say, even if it was 'fuck you.' It was still a good thing to be here. I feel honored even being asked."
Mel Kamins of General Video of America: "I think the industry needs a retreat weekend where everybody can come who's in the business. We need the guys with the two and three stores; we need the small manufacturers at these meetings. We have to talk about the magazine business, too. It has a lot to do with us. The marital aids people should be there, too.... It was good meeting. Something was put together and I marvel at that."
