"We're dealing with rampant piracy, tons of free content," said Steven Hirsch, how to get cialis co-founder of privately held Vivid, among the best-known studios making sex films.

Vivid once earned 80 percent of its roughly $100 million a year from DVD sales, but last year that fell to 30 percent, Hirsch said in an interview.

The Internet challenge, a topic of discussion at the biggest adult film expo of the year in Las Vegas this week, has already presented itself to the music industry and other mainstream entertainment.

Much of the Internet competition for the U.S. porn world, largely based in Southern California, comes from Web sites like Toronto-based XTube.com, whose format is modeled after Google's YouTube.

Some of the videos on the XTube site come from commercial studios while others are posted by amateurs.

"We're not pirates. We are providing a service that people think they can use to pirate," said Lance Cassidy, one of XTube's founders.

The XTube model
The Web site has 200,000 free videos, typically 30 seconds to two minutes long, and about 1 percent of visitors buy DVDs or video streams, resulting in millions of dollars of annual revenue, sales director Curtis Potec said. About two thirds of XTube's viewers are gay, Potec said.

"We've had tons and tons of people tell us this is the future of the adult industry," Potec said. "Most of the money is ads, on any site, mainstream or adult."

Scott Coffman, president of Adult Entertainment Broadcast Network (AEBN) in North Carolina, says his company started a YouTube-type site a year-and-a-half ago to generate revenue through advertising and drive traffic to pay-per-minute sites.

AEBN limits free clips to three minutes. Users make about a quarter of them.

"They don't convert that well when you give away so much. There is a fine line between giving away something small, a teaser … and giving away the whole thing," Coffman said.

He said his company has revenue of about $100 million a year and is facing a lawsuit from Vivid accusing AEBN of piracy.

Vivid's Hirsch says he will sue other video-sharing sites.

"This industry is going to have to get together and look at these guys that are putting out the stuff for free … so they are going to have to get in line and start paying for it," Hirsch said.

"If that doesn't happen and we see all of this free content out there, people are not going to be able to afford to produce movies anymore."

Short-clip marketing
Videotape, fewer prosecutions, DVDs, and Internet advertising created an unprecedented boom the U.S. sex film business since the 1980s.

Many studios post short clips on Internet video-sharing sites as advertising to sell more movies.

"This is something we constantly discuss in our office. Is it too much," said Garion Hall, chief executive of Abbywinters.com, an Australian company featuring lesbians.

Hall said only one out of 500 viewers clicks over to his site from free clips and of those only one in 50 subscribes.

Some adult-industry executives say a solution may lie in future distribution deals with big companies such as AT&T, Verizon Communications, Comcast, and Apple.

An Apple spokeswoman said the company would not comment if it had held past talks or was interested in distributing adult product. A spokeswoman for Comcast, the largest U.S. cable provider, said the firm offered adult content in its video-on-demand service but said she knew of no talks for mobile adult distribution.

Sales of sex films to mobile devices occur in Europe but have yet to take off in the United States.

"We won't make money through adult content," said Verizon Wireless spokesman Ken Muche.

AT&T did not comment.

Jay Grdina, president of ClubJenna, a division of Playboy, says sharing previews is a mistake. "We're getting bitten by our own sword," he said.

Grdina, former husband and on-scene partner of Jenna Jameson, one of the industry's most famous porn stars, said he has met companies such as Microsoft and Apple to seek wireless and other distribution deals that could allow easy downloads to devices such as iPods.

A spokesman for Microsoft said they were not in talks to distribute adult content.

"The revenues are massive," Grdina said. But "the biggest fear is share price: what are the shareholders going to say?"

Posted by Richard Esguerra

Last November, we reported on H.R. 4137, the College Opportunity and Affordability Act of 2007, which includes misguided anti-piracy requirements for universities. For the most part, the massive, nearly 800-page bill refreshes existing legislation about federal financial aid. But the bill also includes a section with a title that sounds as if it were dreamt up by an entertainment industry lobbyist: "Campus-based Digital Theft Prevention." Specifically, the bill says:

Each eligible institution participating in any program under this title shall to the extent practicable—

[…]

(2) develop a plan for offering alternatives to illegal downloading or peer-to-peer distribution of intellectual property as well as a plan to explore technology-based deterrents to prevent such illegal activity.

To those unfamiliar with this particular sort of DC double-speak, "alternatives to illegal downloading" means industry-sanctioned download services; and existing "technology-based deterrents" means network filters and other tools.

These congressional requirements will turn out to be expensive dead-ends — the industry-sanctioned online music services are laden with DRM, and network detection/filtering how to get cialis without prescription programs present privacy risks and are inevitably rendered obsolete by technological countermeasures.

Advocates of the bill stress that the language stops short of demanding implementation — that it only requires universities to "plan" — but this argument misses the point entirely. The passage of this bill will unambiguously lead universities down the wrong path. For the sake of artists, administrators, students, and consumers better approaches exist.

The bill also would hang an unspoken threat over the heads of university administrators. In response to concerns that potential penalties for universities could include a loss of federal student aid funding, the MPAA's top lawyer in Washington said that federal funds should be at risk when copyright infringement happens on campus networks. Moreover, earlier versions of "Campus-based Digital Theft Prevention" proposals nakedly sought to make schools that received numerous copyright infringement notices subject to review by the US Secretary of Education.

In October 2007, the MPAA even tried to supplement its efforts in Congress by giving away custom-built network monitoring software to universities it had flagged for having the most file-sharing traffic. The software, which they called "University Toolkit," was exposed by researchers to have egregious security and privacy flaws. And, in an ironic twist, the University Toolkit was removed from the MPAA website following allegations of copyright infringement — the MPAA had failed to comply with copyright licensing terms that required the source code for the toolkit software to be freely available.

Recent reports suggest that February may be the earliest that the House will address the bill. There is time yet to contact your representative in Congress to educate them about these out-of-place requirements, and to ask that they support any effort to remove the offending mandate from the bill. Visit our Action Center to email your representative today.

January 13th, 2008