Steve Hirsch Paints Bright Horizon at AEE Keynote Seminar

LAS VEGAS—It would not be unfounded to say a sense of reinvigoration pervaded AEE 2011, and perhaps one of the most epitomizing instances of this came via Vivid Entertainment head Steven Hirsch’s fireside chat-style keynote seminar Friday afternoon opposite journalist Damon Brown.

Titled “Still on Top: How the Largest Adult Film Company in the World Survives in a Challenging Market,” the seminar touched on many of the key business innovations Vivid has implemented over its 26-year history, including pioneering the contract star model, cornering the market on celebrity sex tapes, adapting early to the mobile sphere and so on.

Now, by no means, certainly, was any pretense intimated that the industry was back in prime fighting shape; the title of the seminar alone acknowledged that, and Hirsch underscored the point by saying that adult had been “hit with the perfect storm” of piracy, a devastated economy and major shifts in technology.

At the same time, he asserted, “Things are stabilizing, and they look pretty good.”

The new industry pillar on the horizon, as many have already projected, will be the IPTV platform, Hirsch maintained: “There is no question that there will be a time, and it’s not far off, that IPTV will be the main way we consume content.”

He went on to attest that DVD sales currently represent less than 25 percent of Vivid’s revenue, and within the next five years, he expects to see that number decrease to less than 10 percent. Blu-ray, meanwhile, amounts to what he called a “transitional technology” destined to fade away once IPTV becomes the standard.

And what of the 3D boom—how does Hirsch see that factoring in? “3D is a little different,” he said. “People like to take their glasses off when they watch adult. When it gets to the point of being able to see 3D without glasses, it will take off, which I see as about seven years out.”

Another exploding market, the touchscreen tablet/handheld platform, presents what Hirsch said at this point constitutes an “add-on business” for Vivid. “It was something that we knew was going to happen, and we wanted to have our mobile site designed to be able to watch on your phone and so forth,” he explained.

The minor barrier of such mobile devices, he expounded, is that American carriers don’t allow adult content to be presented “on deck” via apps. He pointed out, however, that, “It doesn’t really matter if you can get an app or not; people will use their browsers and go anywhere they want. People are able today to access on their phones.”

On to the aforementioned topic of the Vivid Celeb sex tape line, Hirsch credited the internet with creating the landscape in which such a product could even exist.

“Access has changed,” he said. “The internet really changed everything. Ten to 15 years ago, the way people found out about celebrities was to go out and buy a magazine. Now people feel much closer to celebrities. Not everybody is an actor or actress, but everybody has sex, so people can watch these and compare themselves to their favorite celebrities. And with what happened with Kim Kardashian, people began to feel that doing an adult movie wouldn’t hurt their career, that it could help it.

“Demand is a good thing,” he continued, “and whenever there is a demand, it means we can offer these celebrities an amount of money they’re comfortable with.”

Hirsch said that every single day, Vivid will “get a call from somebody saying they have a tape of some celebrity doing something,” and that 98 percent of them get turned down. “We know how to do these things,” he boasted, “and we know how to do them better than anyone else.”

He revealed that Pam & Tommy Lee: Hardcore & Uncensored remains the best-selling of the Vivid Celeb releases, but said, “Kim Kardashian could certainly catch up.”

Of course, the flip side of the coin in this particular case maybe more so than all others is the ever-more-overwhelming specter of piracy and tube sites, with celebrity sex tapes surely embodying one of the most targeted types of content for illegal downloading.

“The tube site business is here, it is real, and it’s something that we have to deal with,” Hirsch conceded. “We want to use tube sites to promote our product, but we also send out more DMCA [Digital Millennium Copyright Act] letters than anyone else.”

Hirsch disclosed that Vivid had been approached by tube site YouPorn to strike some sort of deal, but declined because “we were uncomfortable with underage kids being three clicks away from hardcore porn.”

In order to effectively combat piracy, Hirsch said, “The laws need to change. When we find a clip out there, we send out a letter, they have 48 hours to take it down, and on the 49th hour, it’s back up again.”

One possible ray of hope, he noted, is “a bill winding its way through Congress that would set up a board to take down sites showing content they don’t have rights to. There are a lot of issues concerning privacy, etc., surrounding it, but we’re for it.”

Looking ahead to the future, Hirsch contended that the rule for success would ultimately be “a lot more about quality than quantity. The day of the generic adult movie is over. We have to zero in on these things people want to see and will pay for: celebrities, parodies, big features.

“You can’t be afraid of the future,” he summed up. “As an industry, if we stay on top of content and technology, we’ll be OK. In five years, there’ll be fewer companies, but they’ll be stronger, and we’ll carry it on.”

Pictured: Damon Brown (l.), Steve Hirsch (r.) Photo by