SELLING THE SIZZLE
In our current down economy, there is one indie film genre that is actually attracting new investment dollars: the porn biz. That’s according to The Atlantic, which, in an article by Tom Johansmeyer, tells the story of AdultVest, which bills itself as the adult industry’s first hedge fund and investment community. The fund won the Alternative Investment News Hedge Fund Launch of the Year Award, beating out a the Teacher Retirement System of Texas.
As the piece makes clear, the fund’s CEO, Francis Koenig, sees opportunity amidst all the financial carnage and technological disruption of the current entertainment distribution system.
From the piece:
Relatively small, fragmented, and unaccustomed to outside investment, the U.S. porn industry (which generated roughly $12 billion in 2007) is somewhat buffered from today’s credit crunch, but it has its own problems. Video sales have been falling by 15 percent a year since 2005, and online content doesn’t deliver the returns it used to, now that Web sites such as RedTube and PornHub basically give it away. Struggling companies need investors to help right their operations, and those that are thriving in a brutal market need funding for growth.
Enter Koenig and AdultVest. He sees the porn downturn as temporary and believes that technological improvements will trigger a turnaround. One example: iPorn, a start-up in AdultVest’s portfolio that is developing an application to deliver porn to the Apple iPod. “The industry’s not going anywhere,” Koenig says. “You’ve got 6 billion people on the planet,” he laughs, “and they’re all horny.”