New York Times, yes.

IMDb, no. (still)

So last night I ended up having an hour-long phone conversation with David Cay Johnston, the New York Times reporter whose byline appears on yesterdays article Indications of a Slowdown in Sex Entertainment Trade.

Mr. Johnston pointed out that 1) the article’s headline was “slowdown”, and 2) the article mentioned that independently generated financial data about the “adult entertainment industry” is all but impossible to come by. Fair enough. I think the article might have made the second point more forcefully, and perhaps sited financial speculation about the size of “the industry” that doesn’t come from people with either an pro-porn or anti-porn agenda. (If he were a regular reader of this blog, he’d know where to look.

We also talked about the book Innumeracy. It turns out it was written by a friend of Mr. Johnston’s, and aside from his reporting duties, he often lectures to journalism students about the importance of understanding numbers.

Everyone’s got an agenda, even me. In my essay The Porn Monster, I laid out my case for the stake that pro-industry people, anti-porn people, journos, and academics have in the continued propegation of (what I feel are) figures for the size of the “adult industry” that simply aren’t supported by evidence or common sense. In short, if you go looking for money in the adult industry, you can’t find it.

Now I’ll cop to my agenda.

Hysterionic reporting on the porn industry, especially the grossly inflated size of the porn industry has given rise to the popular notion that the industry is a beheomuth that nearly perfectly serves the erotic entertainment needs of the public. A phrase you’ll hear time and time again in “the bizz” is, “With 10,000 titles a year, there’s something for everyone!”

Looking from the outside, the existence of title like DIRTPIPE MILKSHAKES (volumes 1 and 2) lends credence to this idea. After all, if a $13B/year industry is making dozens, perhaps even hundreds titles a year devoted to such exotic sexual interests as women eating semen out of other women’s anuses, then certainly there must be something out there for people with more pedestrian tastes – things like convincing, well-crafted depictions of mutually pleasurable sex.

But while there’s no shortage of anal creampie themed videos, gaping anus themed videos, and other things to unsavory to mention on this blog, finding well-crafted sexually explicit films that convincingly depict mutual pleasure is all but impossible. As I said to Stacy Grenrock Woods in Esquire a couple of years ago, it’s easier to find a well-made fishing show than a well-made sex film.

Porn’s supposed to be this multi-billion dollar a year business, so big and dangerous there’s an entire department at the DOJ devoted to it; and it churns out thousands and thousands of titles each year, seeming to serve every nitch fetish, but it can’t seem to serve the wide-spread and basic desire that many people have to see a well-crafted depiction of two people who really seem to be enjoying having sex with each other.

People know in their gut something’s not right. People know there’s a disconnect. People know that what they want to see isn’t some specialized nitch, it’s a basic human desire. Yet it goes unserved. Why? To me the answer is quite simple.

The restrictions on the distribution of erotic images (as in you won’t be able to find MATT AND KHYM at Walmart, Blockbuster, etc.) has restricted the business to making money in a very few, and not especially lucrative ways. Porn margins are razor thin, and the result is that “the industry” vastly overserves niche sexual interest markets, where issues of production quality, or even simple honesty in packaging will be overlooked, while it vastly underserves sexual interest with broader appeal, but much higher expectations.

The combination of the digital video revolution and the internet has removed virtually all barriers to entering the market. These days, any idiot with a BestBuy credit card can make and market porn, and that’s just what’s happened. And anyone who’s taken a highschool economics class knows what happens when too much supply chases too little demand. Certainly Greg Zobary does (from LukeIsBack.com)

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.

But even if you take the well-publicized porn figures at face value, porn just isn’t that big a business when you compare it to other things American’s spent money on. For example:

According to the American Sport Fishing Association who take their data from the US Fish and Wildlife Service, in 2003 Americans spent over $5 billion on equipment, nearly $15 billion on fishing trips, and some $20 billion more on boats, trucks, licenses and other fishing-related products and services. Anglers paid $290 million on ice alone and the total annual economic impact of the sport fishing industry for 2003 was estimated at $116 billion.

According to PackagedFacts.com in 2005 the market for feminine hygene products was over $3 billion. (As with porn in the NYT article, apparently the tampon industry is looking for ways to counter the effects of an aging population on their bottom line.)

Do people spend money on porn? Obviously yes. Is porn “big business”. That depends on whose numbers you use and what you compare it to, and what you think “big business” is. It might be bigger than tampons, it’s definately not as big as fishing. Do we spend to much time thinking about porn? Maybe. Do I? Definitely!

Last year, porn legend Nina Hartley revealed the secret formula for making boring porn.. But Nina was talking about the creative side, and no discussion of the creative side is complete without looking at the business side. Like any good detective will tell you, follow the money and you’ll usually find out why people do what they do.

Well as it happens, the same day the New York Times declares that porn is a $13 billion/year business, over at Adult DVD Talk Oren from Anarchy Films blows the lid off the business side of the skin biz. Says Oren:

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).

Do the math indeed!

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!

The simple fact is, even Jenna Jameson — porn’s biggest superstar ever — doesn’t make as much as an ensemble player in a run-of-the-mill network sitcom, let alone rake in $1M/episode like each cast member of Friends did — for six seasons! “Big budget” in porn means high five figures. The budget for an “epic” like PIRATES still doesn’t top a million.

And if you think porn is making 60-fold returns on these films, just stop and think a minute. Do you think Hollywood (or Wall Street!) is so encumbered by ethics that they could resist a 6000% return? If there was that kind of return on investment in porn, the “mainstream” would get over its squeamishness pronto, and every single studio, including Disney, would have an “adult” division.

So why do the New York Times, and PBS, and the AP keep reporting this nonsense? For the same reason people make porn; because it’s fun to go slumming, because it’s titilating to take an “unbiased” look at the “adult industry” because putting something “trashy” in the business section spices it up a little. And mostly, because no one’s checking the facts.