Porn Industry May Decide DVD Format War

It's a dirty little secret that's not all that dirty (or secretive) for those who follow technology trends.

The porn, or "adult industry" — to use today's preferred nomenclature — tends to serve as something of an oracle when it comes to predicting which technologies eventually make their way into the marketplace and which ones don't.

If you want to know where consumer technology is heading, look to porno and war, or so the axiom goes.

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Twenty-five years ago, it was the adult industry that played a major role in shaping the future of American home entertainment, at least for the following 15 years or so.

Suffering from stagnant theater and video-booth revenues, the industry made a bold decision to shift toward a new method for distributing its content.

In the process, porno cozied up to a budding VHS format in lieu of what many considered to be its superior Betamax cousin.

Granted, Sony (the progenitor of Betamax) had a lot to do with that ultimate decision, essentially refusing to let its burgeoning format be sullied by pornography hawkers.

But nevertheless, when the adult industry gave the thumbs up to VHS, the result of the format war was pretty much a foregone conclusion.

What followed is now common knowledge. The explosion in the early 80s of VCRs and home-video rentals did for the adult industry pretty much what TV did for pro football.

Today, of course, there is a new format war at hand, one between two high-definition discs whose similarities far outweigh their differences.

Nevertheless — whether it be out of habit or simply a wish for the whole thing to be over and done with — many have started looking toward the adult entertainment industry to get a better feel of which way the high-definition winds are truly blowing.

As was expected, the 2007 Consumer Electronics Show saw even more posturing and politics between the Blu-ray Disc and HD DVD camps, with each side announcing a new set of alliances and predicting that the end of the war was imminent.

Indeed, the success of this high-definition duel, as many have noted, will likely hinge on the partnerships that each coalition creates both with the consumer electronics and film industries.

And while today's home video market environment is far different from that of the 1980s, the adult industry is again poised to play another leading role in the final outcome. That is, if it can choose.

Porn outsells Hollywood

Although the vagaries of entertainment accounting have become legendary, it is universally acknowledged that the U.S. adult-film industry, at around $12 billion in annual sales, rentals, and cable charges in 2006, is an even grander and more efficient moneymaking machine than legitimate mainstream American cinema (the latter's annual gross came in at $9 billion for 2006).

During this year's AVN Awards — AVN (or the Adult Video News) is a glossy magazine that's basically the Variety of the U.S. porn industry — the media network released its annual survey of the U.S. adult entertainment industry.

The figures were impressive. Total revenue for 2006 came in at an astounding $12.92 billion. Overall, delivery costs were down for the year, according to AVN, a fact that supposedly accounted for the industry's continued growth.

On the video side of things, while the adult industry saw a significant decrease (15 percent) in sales and rentals last year, the sector managed to remain the largest (28 percent) in the adult entertainment market, accounting for $3.6 billion in 2006 — this, despite increasing competition from alleged Internet-based methods of pornographic distribution.

And with video sales remaining the industry's main breadwinner, it was only a matter of time before the first high-definition adult film made its way to the public. The industry, not so surprisingly, chose HD DVD.

Like with a 108-inch LCD television, it wasn't really about practicality as much as it was being first to market — and finding a cheap way of doing so.

In December of last year, Wicked Pictures released the industry's first HD DVD title, "Camp Cuddly Pines Power Tool Massacre."

Vice President of DVD Production, Jackie Ramos, characterized it as a movie about people having sex ... and then getting killed.

"Camp Cuddly" also happened to be one of Wicked's more popular titles (it had already seen a DVD release earlier in the year) and the company felt there would be continued demand for the movie in glossier high-definition iteration.

Are HD breasts better breasts?

"A lot of people are, like, you sure you want to see porn in HD?" said Ramos at this year's Adult Entertainment Expo. "We happen to feel that they do. We didn't negate ... we still haven't negated Blu-ray, but it was much more cost effective to go with HD DVD."

As Ramos puts it, Wicked chose HD DVD primarily because of Blu-ray's prohibitive expense and lack of market share, as well as the fact that it is generally cheaper and easier to produce using the format.

"Right now, [HD DVD and Blu-ray] are so new that people are confused. They don't know which format they want. Our primary goal was to bring some sort of high-definition product to the consumer. There's something to be said about planting a flag and being first, and we wanted to stay ahead of the curve as much as we can in terms of technology."

In addition to being first, the plan for now, according to Ramos, is for Wicked to continue presenting its most popular titles on HD DVD and eventually move to a day-and-date DVD and HD DVD release scheme.

Again, he stressed that the company was not ruling out Blu-ray.

"At Wicked, we put a lot of work into our bigger titles," Ramos explained. "We put a lot of work into our special features. With HD DVD, we can offer a lot of cool features for fans, which we plan on doing as we move along in the year — picture-in-picture, commentaries, games — it's going to take a little bit of time to do that, but that's our goal."

Jay Grdina, president of Club Jenna (and husband to Jenna Jameson, the industry's most recognizable performer), seems to agree with Ramos for the most part.

"It's hard because I keep flipping back and forth between Blu-ray and HD DVD," explained Grdina. "I just got a PS3, and I'm thinking maybe Blu-ray is really going to take off."

But for the moment, he remains business-minded and bottom-line oriented, like any good adult industry executive.

"For the adult industry, no one is really replicating on Blu-ray right now. The process is really difficult, obviously. The render times are two weeks or more and the costs associated with it are really high."

Grdina even went one step further, adding that even releasing HD DVDs at this point isn't necessarily a sound business decision.

"It's just not lucrative to make HD movies at the moment. Right now, you're basically doing it just to say you have it. The players are still really expensive and most people don't even have a way to watch the content."

While HD DVD certainly seems to have its foot in the porn industry door, Vivid Entertainment, another high profile adult movie studio, announced plans to release on Blu-ray later this year, or at least to begin burning to the format.

Steve Hirsch, who is head of Vivid, said he will also be using the HD DVD format due to its greater market saturation. But he also said the studio will begin burning to Blu-ray as soon as it's feasible (i.e. affordable).

Is Sony blocking HD porn?

But Vivid may very well run into problems with the Sony format.

Indeed, what all the adult industry execs seemed to either be avoiding, or at least not aware of, was Sony's continued resistance to pornographic material migrating to the Blu-ray format.

During an interview with AVN earlier this month, Joone (a pseudonym used by Ali Davoudian, an AVN award winning pornographic film director/producer and founder of the company Digital Playground), said that he was basically forced to use HD DVD because no Blu-ray manufacturer would make his discs.

While it's true that Sony has said it would not "replicate" adult titles on any format — meaning that it won't use its factories to produce Blu-ray porn — the Blu-ray alliance is saying something different.

In fact, the veracity of Joone's claims were called into question earlier this week when Marty Gordon, vice chair of the Blu-ray Disc Association (BDA), was quoted as saying that there is no specific anti-porn mandate when it comes to adult material on the format.

"There is not a prohibition against adult content," Gordon said in a statement this week. "The BDA is an open organization that welcomes the participation of all companies interested in using and supporting the format, including those that represent the full spectrum of genres in the content industry."

Because of Blu-ray's late arrival into the marketplace, many are saying that Sony would do well to play nice with the adult industry, if it wants to have a fighting chance against HD DVD. Gordon's stance on adult content may be indicative of Sony's increased awareness of the role that the adult industry can and does play in such battles.

Even though plenty of people will readily admit to Blu-ray's technical superiority (the format with a larger, um, storage capacity than its rival) history has already shown that the market does not always operate in a strictly Darwinian fashion.

"You have to remember that the adult industry is low-entry," Grdina explained. "It's a low-hanging fruit. You grab it in a few seconds. It's not necessarily about what's best but what is cheapest, what's most accessible."

"I think whatever we [the adult industry] actually pick, the market is going to follow. But that's still very much up in the air."

Copyright © 2006 Ziff Davis Media Inc. All Rights Reserved. Reproduction in whole or in part in any form or medium without express written permission of Ziff Davis Media Inc. is prohibited.