The Business of Pornography
Most of the outsize profits being generated by pornography today are being earned by businesses not traditionally associated with the sex industry
Men are by far the largest consumers of porn. Most of the hard-core material being sold depicts sexuality from a traditional male perspective, with women's bodies as the central focus, little subtlety, and an emphasis on the mechanics of sex. Some American women, however, are consuming a good deal of hard-core material. During the late 1980s, a survey by Redbook magazine, famous for its recipes and household tips, found that almost half of its readers regularly watched pornographic movies in the privacy of their homes. And a recent survey by the Advocate, a leading gay magazine, found that 54 percent of its lesbian readers had watched an X-rated video in the previous 12 months.
Valley girls. The offices of Vivid Video are in Van Nuys, Calif., the epicenter of the sex industry. Located in the middle of the San Fernando Valley and founded with the slogan "The Town That Started Right," Van Nuys has long been known as a solid middle-class community, home to the "Valley girls" whose distinctive idiom is often parodied. Great Western Litho, which prints the box covers for hard-core videos, is now one of the town's largest employers, along with Hewlett-Packard and Anheuser-Busch. The Mid-Valley Chamber of Commerce never mentions in its community guide that hard-core videos are one of the area's major exports. And yet from an inconspicuous set of buildings, across the street from a quiet residential block, Vivid Video has become one of the two or three leading adult-film companies in the world by adapting the old Hollywood studio system to the mass production of porn.
Steven Hirsch, the founder and president of Vivid, has long hair, a good tan, a firm handshake, and a brand-new black Ferrari parked outside his office. As he talks about pay-per-view buy rates, brand recognition, and foreign licensing rights, he seems no different from the aggressive young Hollywood executives a few miles to the south. He started his company in 1984, at the age of 23. He thought that all porn films looked alike--and that he could make better ones. He signed actresses to exclusive contracts, heavily promoted his stars as the "Vivid Girls," and put them in films aimed at couples, with dialogue and a plot. His formula soon proved a success.
In addition to creating a sex-star system, Hirsch has made Vivid one of the top hard-core film companies--along with VCA Pictures, Leisure Time, and Metro--by exploiting new avenues of distribution. Vivid's films appear on Playboy's cable channel, and in partnership with Playboy, Vivid has launched a new pay-per-view cable service called AdultVision. It offers porn films 24 hours a day, seven days a week. Adult movies on pay-per-view have become a large source of profits for cable companies; a "cash cow," one executive told Variety. When an adult film is sold on pay-per-view, the cable operator typically gets to keep 70 percent of the revenue.
Last year, Americans spent more than $150 million ordering adult movies on pay-per-view. Most of that money was earned by the nation's major cable companies: Time Warner, Continental Cablevision, Cablevision Systems Corp., and TeleCommunications Inc. The porn services like AdultVision and its main competitor, the Spice Channel, often attract more viewers than channels offering Hollywood movies. Some of the adult services give cable operators 5 percent of the revenues gained by selling various products that are advertised between porn films. There are cable companies that rank in the Fortune 500 that now earn money through the sale of love oils and lingerie.