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in Filmmaking
on Jun 2, 2007

Matt Richtel in The New York Times today looks at how the internet is transforming the adult entertainment industry. As the porn business has always been something of a trendsetter when it comes to adoption of new technologies and viewing patterns — the adult biz was instrumental in popularizing home video in the ’80s, for example — the article is worth reading for independent filmmakers. It discusses how the ‘net is now beginning to inflict record-industry-scale losses on the porn industry while also noting how the porn companies are responding to the threat.

From the piece:

After years of essentially steady increases, sales and rentals of pornographic videos were $3.62 billion in 2006, down from $4.28 billion in 2005, according to estimates by AVN, an industry trade publication. If the situation does not change, the overall $13 billion sex-related entertainment market may shrink this year, said Paul Fishbein, president of AVN Media Network, the magazine’s publisher. The industry’s online revenue is substantial but is not growing quickly enough to make up for the drop in video income.

Older companies in the industry are responding with better production values and more sophisticated Web offerings. But to their chagrin, making and distributing pornography have become a lot easier.

“People are making movies in their houses and dragging and dropping them” onto free Web sites, said Harvey Kaplan, a former maker of pornographic movies and now chief executive of GoGoBill.com, which processes payments for pornographic Web sites. “It’s killing the marketplace….”

“The barrier to get into the industry is so low: you need a video camera and a couple of people who will have sex,” Mr. Fishbein said.

The article winds up with an interesting discussion of the benefits of free clip distribution on the web.

Manny Ulele, the founder of a Las Vegas-based video production company and Web site, said the use of these teaser videos was turning the online pornography business into something of a science. (That is not his real name, but one he uses for business purposes.)

Mr. Ulele said his company could pay $500 to $600 a day to get its short clips listed prominently on popular video clearinghouses. He said that fee could be justified by the rates at which people follow through: 1 in 1,000 viewers of the free content click onto his site, he said, and 1 in 600 of those might buy something — a subscription, DVD or other product.

Over all, he said, his Web site has around 10,000 customers paying $30 a month to download or stream video clips.

“The perception of the consumer is that there is free porn,” Mr. Ulele said. “But most of it nowadays is controlled.” He added that he and other operators understood what length of video clip, and what kind of clip, would hook viewers.

“We’ve been fine-tuning it for years,” he said. “We’re able to determine exactly what works and what doesn’t.”

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