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Media overestimates porn industry’s girth, say indie producers

Photo: Models at the Playboy Mansion (2004, Xeni Jardin).

A number of adult industry bloggers are taking aim at what they believe to be sloppy math in media reports about porn industry profits. Next week, the annual Adult Entertaiment Expo takes place in Las Vegas, and at issue today is a state-of-the-biz story in the New York Times by David Cay Johnston (reg-free Link), which states:

The sex-related entertainment business grew in 2006 by just 2.4 percent, roughly the rate of inflation, to just under $13 billion (…)

ORLY? In a forum called Adult DVD Talk, Oren from Anarchy Films disagrees:

An average gonzo cost about $13,500. Than editing hard and soft is about $1,200. Design a sleeve is about $600, authoring is about $700, sleeves are about $500, replication is about $1,500 for 3000 pcs. So if you do the math right you looking into a $18,000. A good distributor will bring you back about $19,000 in the first 45 days of release. To keep a company going you need to release about 50 movies a year with an invesment of at least 1,000,000 in cash. (do the math).

Tony Comstock, founder of real-couples adult film company Comstock Films, continues that argument on his blog:

If the average gonzo flick (the mainstay of the industry) costs $18K out the door, with 12,000 +/- titles/year, that puts the total annual production, post-production, replication and packaging costs somewhere around $216M/year. The Times is asking us to believe that $216M investment is generating annual revenues of $13B. How’s that for a return on investment! Even with promotion and overhead you’ve got to like those numbers!

The only problem is, the figures that actually make sense and are supported by any evidence are Oren’s. Look at any porn video and it’s easy to see the producers didn’t spend a lot of time or money on it.

But the numbers reported by the Times are complete fabrications that have be reported as fact without the journalist even taking the time to run them through a calculator.

If Americans are spending “90 cents on porn for every dollar they spend on Hollywood movies” where are the $12M/picture stars with homes in Malibu and East Hampton? Where are the the $10K/day cinematographers or the $2000/day steadicam operators? Where’s the craft-services table piled high with an endless supply of Heineken and Perrier? They’re nowhere to be found because there’s not enough money in porn to pay for them.

Yes, I know, I know. The money flows to a secret cabal of ultra-discreet distributors. As PBS reported, “That’s why you don’t see most of them running around in the Rolls they keep that in the garage and take out on weekends.” Talk about a porn fantasy!

Link to the full post on Tony’s blog. Here are two Forbes items which offer alternate estimates of the porn industry’s size: Link 1, Link 2.

Update: Here’s an interesting snip from Luke Ford’s blog, back in July 2006. The guy he’s interviewing is Greg Zobary, of Zeborary Insurance Services — a broker who covers porn productions:

Luke: “Do you think there are any millionaires in the industry who are solely employees?”

Greg: “No.”

Luke: “Do you think there are any billionaires in the industry?”

Greg: “No way.”

Luke: “Maybe this isn’t a $12 billion a year industry.”

Greg: “It’s a $400 million [DVD] industry, maybe $500 million. The industry went out and promoted these figures that included strip club revenues, hotel revenues, etc and came up with this [$12 billion] figure, hoping it would lead to the legitimization of the industry. What it has really led to is a bunch of idiots who watch this stuff and think that porn is the new gold rush. They jump in and produce a few movies and think they’re going to get rich. Everyone I’ve seen who’s done that has walked away with no money. We no longer insure these people. They don’t stick around.

Link.

Update: Cory Silverberg, About Sexuality editor for About.com (which is part of the New York Times Company), says:

This has been pissing me off for over a year now, great to read its being challenged a little more loudly.

The multi-billion dollar numbers really got going with an AVN state-of-the-industry “study” in December 2005. Like others, I’ve been bitching about this for a long time, since the figures represent a pathetic circle jerk between AVN, porn production companies that have PR people, and mainstream media like NYT, Forbes, etc… The proof of this?

The stats from AVN, which is what the MM always quote are not based on any verifiable sources. In fact the AVN stats cite New York Times articles, and when you go to the articles, guess who they cite to back up the multi-billion dollar claim? AVN!!!

From a Dec/05 blog post of mine:

“This week they have released figures proposing that adult industry revenue is poised to top 12 billion dollars for 2005. While this could be true, many of their numbers either come from “internal data” or from articles in reputable sources (New York Times, Forbes), except that those articles relied on AVN interviews to reach their conclusions about the financial value of the industry.”

Here’s the original AVN “study”: Link.

Again, what I find most disheartening is the fact that WaPo, the Times, and Forbes care so little about accuracy when it comes to sex stories, that they run this stuff. Ironically, I was just interviewed by someone from AVN, and they took the time to fact check a claim I made!

SF Chron columnist, author, and blogger Violet Blue writes:

Yup, this is the same circle jerk I get when I try to get hard
statistics on porn sales, as well as viewership. That’s why I never
cite MSM or AVN in my books for numbers, they’re both equally full of
shit (read: their own agendas). Except MSM spins it, “omg, look how
much dirty money they make from the sex, it is bad” and AVN spins it
“omg look how much money we make, we are powerful and obviously right
to do what we do in the ways we do it.” Both are dangerously, stupidly
incorrect in their assertions and it has nothing to do with what their
viewers or readers want, or like.

Bleah. We’ll all be better off when these big companies tell the truth
about sex and money. I live my life every day to make them do just
that.

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