MANASSAS, Va. – When SexZ Pictures CEO Bo Kenney heads off to Cannes in April, it won’t be to work on his tan or to sip martinis with Charlie Sheen on a yacht full of aspiring bikini-clad starlets.
Kenney will instead be shopping cable versions of his AVN award-winning features Corruption and Upload at the 45th annual MIPTV market, the largest global content trade event for buyers, distributors, and producers in the mainstream entertainment industry.
The decision to shop non X-rated versions of SexZ Pictures product to a worldwide market stemmed from Kenney’s frustration over the business model utilized by adult cable companies in the States.
“Cable companies in the United States are no friends to us,” Kenney told AVN. “The Hot network, Playboy, the Vivid network, the Hustler network—they’re no friends of ours. If we sell to those companies we have to take what they deem as a fair share for us. If I make Upload for $350,000, they treat it the same way as an Evasive Angles $10,000 movie. They don’t pay us any more for making a better quality movie. They have a set price that is all they want to pay. As a production company there’s nothing we can do. They have us locked in to where we can’t get any reward for our efforts.”
With adult DVD sales still plummeting, many studios are aggressively seeking out licensing deals with VOD and cable companies. Kenney, who owns a chain of adult retail stores, is vehement about not selling out his high-end features for chump change. "But, if I say 'hey, I’m not giving you my movies,' there are 20 other guys lined up that will sell their movies and take whatever money they can get just to try to survive," he said.
"We’re now paying the price for bad deals that were made years ago," added Eli Cross, director of Corruption and Upload. "It’s made it really hard for anyone else to make any money."
Meanwhile, Kenney cites adult cable channels as the biggest sellers of pornography noting, "Comcast has 380,000 subscribers in Fairfax County, Virginia where I live. Those 380,000 subscribers have 10 channels of adult in their house every day. The opportunity for them to buy 40 to 50 movies a day is phenomenal."
He continues, "If I continue to try to get my movies on cable through the methods that are available, I won’t be in business to sell them because the cable companies are killing the industry right now. They’re strangling us. We give them the content for less money than what it cost to make, and then they take away DVD sales from us on the other end—and kill the stores. We’re stupid. I can’t deal with that scenario anymore. I have to go into a marketplace where I can at least have an opportunity to make back what I invest."
This brings us to booth 06.23 at the MIPTV.
"It’s a shame," said Kenney, "If we got a fair percentage, say 15%, of the cable business, we wouldn’t have to seek out other avenues of revenue. The adult market is so depressed right now that for us it’s like we can take a chance with making our movies fitting to sell to everyone or we can try to sell on DVD. But, even if I sell 10,000 on a big movie it just doesn’t pay for itself. So, we don’t look at the adult industry as a fall back anymore. We look at it as a hold back."
SexZ Pictures has postponed production on Cross’s next big feature, The Blood of Virgins. Boasting a $550,000 budget and 96 page script, Blood may be produced as a non x-rated low budget horror movie.
"With $550,000, a solid B horror movie can be made," explained Cross. "If someone possibly buys that movie for a million dollars, you’ve made more money on that one sale than you ever were gonna make off it as a porn movie. It’s something worth looking at."
Cross is also encouraged by a particular distinction between the mainstream and porn business models. "One thing that is different about mainstream is that the distributors do understand that they have to allow the people that make the movies stay in business—the porn model doesn’t work like that," he said. "In porn, a lot of distributors loved that every week there was a new porn company because they could take X amount of product, never pay for it, and count on the fact that in six months these guys would be out of business and unable to collect—then there’d be somebody else right behind them. Mainstream will let you make a profit and, if you turn out something decent and with value, they will pay you more for it because they do watch the movie before they buy it, which again doesn’t happen in porn."
Kenney has pressed 500 non x-rated copies of Corruption and Upload to take to MIPTV. "I think if the films are judged on their merits, they’ll do well," said Kenney. "I watch what Cinemax and these other stations are running and I know that what we’re offering is better. We feel that unless we’re out there exposing people to what we can do, we’re never gonna get our foot in the door."
While SexZ Pictures will continue to produce adult titles, Kenney makes no bones about his intentions. "We’re gonna do whatever kind of movies we can make money producing," he said. "We’re gonna hold back on The Blood of Virgins, and we’re gonna go to Cannes and see what the world wide market is buying and, if we can make money selling these movies on that marketplace, that’s where we’re gonna go."
SexZ Pictures will be at booth 06.23 at MIPTV. The event runs April 7-11.
