Porn and adult Toy stores extreme makeovers for the future of adult retail

An excellent article from Xbiz:

Couples Boutiques

The adult retail industry is undergoing an extreme business makeover in acknowledging the female and couples markets that had been neglected for so many years. Buying a sex toy is often an “I want it now!” decision and shopping for a dildo on the Internet doesn’t fulfill that demand.

Customers needed shops that men and women felt comfortable venturing into together, and that’s when the visionaries took over.

Stores such as Good Vibrations and Fairvilla took the adult retail reigns and steered themselves in a direction that would ultimately become a trend for sex shops around the country. They revamped their storefronts, making their environments inviting, fun and most importantly, pretty to look at.

But there was more to it than just image. They incorporated sex education, an air of exclusivity and layout design borrowed from popular non-adult stores. Add a knowledgeable staff and a prescient eye, and they had created a group of adult retail outlets that attracted everyone — especially customers who never otherwise would have stepped foot in an adult store.

Judge a Store by its Cover
And as most of these adult retailers will agree, creating a welcoming environment starts in the parking lot. Penthouse Boutique owner Dan Quinn, Hustler Vice President of Licensing Theresa Flynt and Fairvilla CEO Tom Berger put as much effort into the outside of their stores as they did the inside, realizing that even the slightest bit of seediness could turn away potential customers.

Quinn’s boutique in Fairfield County in Connecticut has a brand new parking lot and, like malls around the country, has staff sweep and clean it every day. His smaller store, the Luv Boutique, located in Hartford, Conn., is designed with the same philosophy that the Penthouse store was, but attracts a younger, hipper clientele with its marble floors and pink-toned lighting.

The Hustler store’s West Hollywood, Calif., location has bright open windows — something not allowed in all states — and telltale signage that is recognizable around the world. One of Berger’s stores is shaped like King Solomon’s tomb and from the moment they park their cars, customers know they’re going to have a good time inside.

But the feelings of comfort, curiosity and excitement must be maintained as soon as customers walk through the door with selected colors, sounds, lights and displays.

Jeff of L.A., the latex department manager and designer for fetish retailers Stockroom, Syren Latex and Stormy Leather, recently helmed a massive revamping of the Syren store in Los Angeles. Once a dark burgundy color, Jeff said his team painted the walls a light butter cream color and expanded its storefront to give customers more space to walk around.

“We were really trying to go for a boutique feel,” Jeff said. “We didn’t want it to look scary and dungeony; we wanted it to be really clean and contemporary.”

Jeff next stripped the old store’s ugly light fixtures, which he said cast harsh and unflattering light on both the products and the customers, and installed track lighting positioned to bounce off the walls for soft light.

Flynt, who was in charge of the Hustler retail stores from their inception until 2005, said she hired a design team — who happened also to be a married couple — to develop the stores’ interiors. They created a color palette with hues that were associated with certain products.

She used purple in the lingerie section and red in the toy section — “Because red is hot and toys are hot,” she said. — and made a point to avoid blues and greens after her father said he didn’t want them anywhere in the store.

Front to Back
As for the stores’ actual layout, most couples-friendly boutiques use a front-to-back design technique. Flynt said Hustler’s softer items, such as candles and massage oils, are intentionally at the front of the store.

“The stores are designed to seduce you,” Flynt said. “You walk in, see sexy things like candles, lotions, lubes, lip gloss, and as you progress you get to the clothes and the lingerie.”

Flynt said the goal is to have the customer completely seduced by the store and its offerings by the time he or she makes it to the back of the store where the harder products are displayed.

“You don’t want to walk in the door and see a butt plug [right away],” Flynt said. “Some people will turn around and walk back out.”

Syren’s set-up is similar. Jeff said that he saves the wearables — the fashionable latex clothing — for the front of the store so that customers who are into latex primarily for fashion purposes can shop without being overwhelmed by the more S&M bondage products Syren carries. Those products are located in the back of the store.

“It’s not hidden or anything,” Jeff said. “As you go further back into the store, it gets kinkier and kinkier. We wanted to start with wearables because they’re easier for most people to handle. They’re not as threatening as a riding crop or something like that.”

Quinn also designed his Penthouse Boutique to feature the softer lingerie and novelties close to the entrance and the insertables, sex swings and hardcore toys at the back — one of the ways, he said, of attracting more couples, so a guy can feel comfortable bringing his girlfriend or wife into the store with him.

Female Attraction
“We’re enabling mainstream people to go into a place they normally wouldn’t shop,” Quinn said. “Women have the money in America. They run the checkbook. You want women in your stores if you want to grow.”

Flynt believes that women were a neglected market before Hustler and Fairvilla opened their doors. Stores were always targeted toward men, she said, and she thought it was weird that women couldn’t go out and buy their own porn.

“I always felt [the old stores] were dirty,” she said. “I didn’t want to touch anything. There was old product on the shelves, not much to choose from, only stripper lingerie — it just wasn’t right.”

Flynt said her father played the most prominent role in the development of the Hustler stores, saying, “I want a store that even a schoolteacher would feel comfortable shopping in.”

Flynt also enlisted the help of Fairvilla President Bill Murphy and his wife, whom she said took Flynt and her father under their wing and taught them the ropes of developing and running a successful adult boutique.

Fairvilla’s first adult stores were the classic male-targeted DVD shops, and when Murphy realized the need to expand his customer base, they knew how important it was to appeal to the female consumer.

“Eighty-five percent of every family income in a heterosexual relationship is controlled by the CFOs of households: women,” Berger said. “They know how to shop, they want quality, they want choice. Women are capable of making decisions and make more decisions economically and financially than even I make.”

Berger also said that selection is key when targeting female customers. One of the ways mainstream high-end boutiques such as Anthropologie, Agent Provocateur and Pottery Barn attract and keep customers is through trust. Customers know that these stores will continue to offer the best of the best that they can’t find anywhere else.

“The more exclusive the shop — the key word being ‘excluding’ — the less product, but the tighter the selection,” Berger said. “I’ll show you the best of what this industry has to offer within various price ranges. The trust we build with customers is that we will preselect the best from each product range.”

Exotic Materials
Good Vibrations is one of the only adult toy retailers that offers sex toys made of unconventional materials. The store recently launched a line of lightweight cock rings and dildos made from exotic hardwood, and its other unique products include Australian vibrator manufacturer Goldfrau’s practically indestructible ceramic vibe. It’s selection like this that attracts customers to the company’s four retail locations.

“Some believe it’s the brand name that sells the product, but we feel it’s the product that sells the product,” Good Vibes Head Buyer Coyote Days said.

The most successful couples- oriented, female-friendly adult shops sell more than just toys — they offer as many, if not more, lifestyle products in their storefronts as they do vibrators and handcuffs.

“If you’re going to get something for someone,” Berger said, “it might involve candles or incense. There’s more to it than just a toy. It’s about exploration.”

To aid in the exploration process, these stores have hired more than just sales staff to push product off the floor. Good Vibrations prefers to call its staffers sex educators/sales associates, requiring them to undergo hours of sex education and product training. Hustler, Penthouse and Fairvilla train their employees for hours before letting them loose in the store, making sure that every person on staff knows every product’s function and purpose.

“There’s an open dialogue among the staff,” Berger said. “Knowledge is important to understand the product, and with a selective selection it’s easier for them to understand every product and know all about the different materials, engines and other parts.”

Flynt said her staff is trained to be available and knowledgeable, but also be aware of the fine line between helpful and irritating.

“We want the staff to approach customers but also don’t want to bother them like crazy salespeople,” Flynt said. “We want to let them know we’re there, but know that they’re shopping for private things so you don’t want to stalk them. The staff breaks the ice so the customer can come to them later.”

Days said Good Vibes’ sales staffers are invaluable resources who can answer any question a customer might throw their way. The staff almost plays the role of sex therapist and personal friend, she said, listening to customers chat about their sex lives to try to figure out what product will help them the most.

“We very much want customers to know we are actually really there for them with education and also making sure they’re happy,” Days said. “Some people just want to get what they want and leave, but they appreciate us because at some point they’re going to have a question. Nine times out of 10, the person ends up opening up.”

Sexual Experience
Running stores in an open, comfortable manner is just another way to sell a sexual lifestyle, rather then just a dildo or a pocket rocket. Many of the products in these retail outlets can be used together to help build a sexual atmosphere and a better sexual experience overall.

Flynt acknowledged the importance of stocking products that enhance a sexual lifestyle, such as cosmetics, lingerie, apparel and bedroom accessories.

“There’s a big future in adult retailing for the personal items,” Flynt said. “Sex is an experience with someone. We want to sell everything that’s sexy, that makes people feel sexy; things to create a night or weekend getaway that adds to the overall experience.”

Items like candles, bubble bath, wax and sexy lace underwear all act as supplements to the vibrators, harnesses and butt plugs that these stores carry — and store-owners realize the need to focus on lifestyle if they want their outlets to last. And with declining DVD sales, stocking more of these novelty goods and focusing more on selection of sex toys is the best way to stay afloat in the evolving adult market.

“DVD sales are plummeting,” Flynt said. “Women’s toys, lingerie — there are always going to be stores. A vibrator is an impulse buy. You want to run out, want to see it, battery test it, feel it before you buy it. You want it now; you’re not going to get on the Internet and two-day ship it.”

Quinn agreed, adding that many people still are apprehensive about giving credit card information over the Internet and feel more comfortable walking into a store and buying a product after seeing it in person.

Berger said Fairvilla is preparing to expand its line of products to keep up with the changing adult market, something he said is most important if you want to stand out from competitors.

“It’s hardest to change when you’re already successful,” Berger said, “but that’s exactly what you need to do. You can’t keep up with yesterday and with who you’re expected to be — you have to move forward and anticipate where the company is going, where the economy is going.”

And it appears that the future of adult retail is in shops like Hustler, Penthouse, Good Vibes and Fairvilla, scrubbing the stigma that “adult” has held for years and replacing it with a new image, one that is acceptable to both seasoned adult consumers and newbies looking for an adult store they feel comfortable venturing into for the first time.

I couldn’t agree with these folks more, and I am surprised that it has taken so many shops so long to get a clue about making things make more money. This is a prime example of competition making things better for consumers, but I also think it stands to make things better for the industry as a whole. Spending some times at Hustler Hollywood, you can hear people talking about how this is the kind of porn store that you could see friends at and it wouldn’t be weird. comments like that make you realize that having beautiful stores will keep the cities and counties from trying to put them all out of business. Great looking, not seedy stores would actually have a chance of regular citizens protesting and writing letters asking city councils to leave the well lit, couples friendly boutiques alone. Kudos to those that are blazing the trail.

A few industry vets chime in on The Future of Adult Retail

Some interesting tidbits from some of the major players, an article from xbiz:

By Stephen Yagielowicz

Recently, XBIZ Video magazine asked several industry players; “What does the future hold for adult retail?”

Here’s what they had to say:

The line between the adult retail industry and the mainstream retail industry is blurring. Syren’s latex garments have always been popular in the fetish scene and now they are also appearing in fashion magazines, on MTV and in major motion pictures. Our customers always are looking for something new and exciting. I feel that the future of adult retail will rely on adopting mainstream visual merchandising practices and in selling products that incorporate current design trends.
— Jeff of L.A., Latex Department Manager and Designer of Stockroom, Syren Latex and Stormy Leather

As more companies emerge in the “sex-positive” and “women friendly” niches, and as store owners up the ante by raising quality standards and store environments, the adult store will evolve into a more welcomed member of the community, and along with this will be more general acceptance of our product category in our society.
— Jonathan Plotzker, Senior Director of E-Commerce and Merchandising of Good Vibrations

I don’t think adult retail stores are going anywhere. We are visual people and we need to touch and feel images in 3-D. I think Americans are still going to visit the retail stores and there are a lot of people who want to take that drive and view a hundred titles on a wall instead of clicking through box covers online. I think the consumers who visit adult stores and those who order online are two separate markets — different demographics. For chrissakes I still get calls asking if we carry VHS! I understand the trend of people shopping online, but I believe there will always be a healthy market for retail stores too.
— James Melendy, President, Black Market

I feel that the future will be bright for those that are willing to adapt and evolve with the new marketplace. However, those that refuse to adapt and limit themselves to the old business models will be hurt. I see a lot of stores not being able to stay in business, which will result in the adult industry losing footing in those areas as the grandfather rights evaporate. Hopefully, the more successful chains and business people can step in and snatch those locations up, but otherwise those areas will begin to be under-served and those customers might turn to the e-tailers for their business. That might seem great for the e-tailers, but with the amount of free content available on the web, those customers might end up being turned from paying customers to free down-loaders, which isn’t good for the industry. I have no doubt that the stores that offer competitive pricing, a superior shopping experience and make smart buying decisions will continue to thrive.
— Nate Glass, Buyer/Product Manager, Dreamers

The adult retail market can continue to thrive for many years if the studios produce content that is outstanding enough for customers to want to own it. If movies are available for download on the Internet the same day they release on DVD, tangible sales will definitely be affected. Ask yourself, how good does a Hollywood movie have to be to get you and your family out of the house to watch it on the big screen? New delivery methods will compete with old and evolution is inevitable. What the minority is today will become the majority eventually. VOD and IPTV (digital steaming delivery) are the future of adult entertainment.
— Adella O’Neal, Publicist, Digital Playground

Chameleon Link List Submitter

This looks like an interesting piece of software that would help adult webmasters who submit free galleries to various tgp lists and sites. I have yet to use it, and I am interested to see if anyone else out there has any experiences to share about it, or similar software.. I have always hand submitted all free galleries, but I can definitely see the advantage of something like this.

Some of the article from Xbiz:

As the name implies, this tool is designed to automate the submission of free adult sites to the various link lists contained in the software’s database; which numbers 339 sites at the time of this article’s writing. While not every one of these 339 sites will be a match for the site you wish to submit, with factors such as niche, quantity and quality of content determining which link lists will accept your site; this tool will give you the best chances of being accepted; and perhaps even at link lists you didn’t know existed.

It’s this database that is at the heart of the system. Unlike static databases, the one used by Chameleon Link List Submitter is constantly monitored and updated, with closed or “bad” sites being removed and new link lists added.

Fabulous cash – more porn site for adult webmasters to promote

This fabulous cash program has a few good web sites to promote. They have shot some of the newer bigger name porn stars and have lots of content that is offered in the tour, and in the members area. The webmaster referral fee is confusing, but none the less these are good sites to add to the mix, with an excellent template plus visual content chooser for making the free galleries.

fabulous cash

Jugg cash adult webmaster affiliate program with big boob adult sites

Jugg cash has a lot of niche sites. The tours are big and bold, and the amount of video content the surfer gets for the price of admission is a good deal.

juggcash webmaster affiliate

The niche sites available through this program include

Baby Got Boobs – a big boobs mega site with a lot of variation, Mostly big boobed glamor models with large photos and all ages and ethnicities featured. Interactive voting on the different shoots is a neat option that adds surfer interactivity during the tour.

Big Boob Pass – A bunch of big tits! Lots of girls with big fucking boobs, this site has a bunch of girls, moany of them appear to be foreign, but the production value is high and the photos are sharp. The hair makeup and lighting are good and the site design is very good. The price for a monthly membership is under $30 which is a fair price point. The current promotion as of this writing gives the surfer access to all 9 sites int he big boobs network from juggcash for the same price, which is a steal.
Big Tits at school – chics with big tits getting fucked in a college classroom setting – a popular fantasy, lots of videos with different porn stars. The production quality is high and the tour sells well. I believe there are more than 500 free video galleries for the webmaster to promote within this one site alone.
Big tits at work – Big boobs, office setting. I think you can figure that out.
Mommy got boobs – Milfs are popular. Enough said.

pornstars like it big – Hot girls fucking big dicks, giving an excellent view of the pussy and ass penetration. Lots of videos in this site to promote.
Racks and Blacks – Mostly white girls with big boobs getting fucked by black guys. A popular niche!

Bouncy Pictures Launching Modular Adult Investment Program

A concept we have been considering.. glad to see others thinking the same way. I have been imaging a system similar to how music has a points system for the amount of percentage from each album, and sometimes that point system varies project to project. I am looking forward to the details of how bouncy assigned ownership and royalties to the various projects. I am also interested in how stats will trickle through the various adult video on demand sites and into the Bouncy coffers and back to investors.
From AVN:

bouncy pictures logo

Bouncy Pictures Launching Modular Investment Program
By: Peter Warren

CHATSWORTH, Calif. – Interactive DVD production firm Bouncy Pictures is gearing up to start an innovative new investment strategy for those looking to make money in the adult market.

Known as modular investing, the program allows a backer to put funds into individual projects that are handled as independent entities potentially able to generate an endless stream of revenue.

“It’s a way for people to put money into new developments that we’re working on without actually having to take on the entire financial burden of putting a major investment into one big company,” explained Bouncy owner Ty Endicott. “These individualized projects are substantially less cash intensive and give great returns. We’re looking at being able to get investors more than two, three times [their original investment], and then they should continue on over the years. It’s a long-term investment strategy that they can keep making money with � almost like starting a new porn company, with the advantage of having an existing entity behind it.”

In other words, it’s akin to opening up a business whose workers all come pre-packaged. “We do all of our post-production in-house, sales in-house, everything in-house, and we already have a reputation for quality,” Endicott elaborated, “so we figure as we expand our business, we can break it up into modules where each new channel is a new entity. It’s a really out-of-the-box investment strategy, and everyone I’ve talked to so far thinks it’s really opportune.”

As part of this new growth effort, Bouncy is actively seeking an ace salesperson and an expert internet marketer to fill out its staff.

“Those people are going to be key assets that we have in our team, to really maximize the return for all of these investors and also for Bouncy as a whole,” Endicott said.

Further emphasizing the all-inclusive nature of a Bouncy module, Endicott expounded, “We handle the production, the distribution, the marketing, the website building, the internet marketing, the accounting, we’ll set up the corporation, everything. It’s completely turn-key. We have all of these systems already in place, and they’re already tuned. So it’s really low-risk. And it’s lifetime. I mean, they could conceivably retire on their investment with this one business model.”

Anyone interested in applying for the sales or internet marketing position, or finding out more about Bouncy’s modular investment program, should contact Ty Endicott at (213) 365-0171 or

AIM Concerned About Herpes and HPV Increase

I hope the mainstream media and other information outlets will pick up this info, not specifically about AIM or the porn industry, but mainstream America is having these same issues. There is a lot of ignorance out there about STD and sexual health. If we can get more of this info out, perhaps people will have less exposure, and people will demand that there be more research into cures for the social diseases.

Additional talk and communication about these issues will do the whole world some good.
Story found via porn valley news:

From — Adult Industry Medical Healthcare’s (AIM) Chief Medical Director Patric Hernandez-Kline has expressed concern about an increasing frequency of herpes outbreaks he has seen among industry talent over the last three months at the Van Nuys, Calif. AIM STD clinic.

“Outside of abstinence, there’s really no sure way to prevent the transmission of it, unless you’re doing solo play or you’re really aware of your body and have taken Valtrex before,” Hernandez- Kline told XBIZ.

Valtrex is a brand name for valacyclovir HCI, a medication prescribed to suppress outbreaks of Herpes Simplex I and II.

“But for those individuals that don’t have herpes, it can help lower or suppress the virus enough so that if people come in contact, they’ve got a medication that would theoretically reduce the chances of a herpes outbreak or transmission,” Hernandez-Kline said.

Industry members who would like to be given a prescription can go to the Van Nuys AIM clinic and, if they have already been seen for other testing, request a prescription, which Hernandez-Kline will issue for them without a scheduled doctor’s visit. Prescriptions cost approximately $150 a month.

“I would prefer that they see me, but to keep costs low for them, since Valtrex can be a little pricey — I think it would be better for them to have something onboard,” he said.

“I think that anyone in the industry should think about being on Valtrex for six months to a year, or however long they feel it’s necessary to suppress an outbreak,” Kline added. “There’s a limited number of studies that indicate that it may have a protective benefit. But in theory, in this population, it just makes sense [to be on Valtrex].”

Kline also recommends that sexually active industry members, female and male, be vaccinated for HPV, or human papillomavirus. Seventy percent of cervical cancer is linked to exposure to HPV.

While the vaccine is best administered to subjects prior to becoming sexually active and usually recommended for females between the ages of 9 and 26, Kline feels that industry members would benefit from being vaccinated at any age.

“There’s actually a number of strains of HPV that affect the genital tissue. The vaccines cover four strains; two of the highest risk and two of the lowest risk. The high risk ones are the nonvisible warts that people don’t see and those are the ones that cause cervical cancer in women,” Kline explained.

“In a study, they looked at about 30,000 women and of the women that had some type of HPV infection, they would generally have one of the strains. But very few had more than one, so it still makes sense to vaccinate; in the event that you haven’t been exposed, the vaccines would still be effective,” Kline added.

For men, Kline said that though the risk for cancer is low, they should be vaccinated in order to avoid giving the virus to their sex partners.

Gardasil is the brand name for the HPV vaccine and a series of three injections costs $450. Industry members can be put on an accelerated schedule of shots, administered over a four-month period. Typically, the regular schedule for vaccination can take between six months and a year.

hotmovie parent company donate thousands to Free Speech Coalition 2257 battle

From AVN Online:

National A-1 to Fight 2257 Addendums With Sizeable Donations
By: Justin Bourne
Posted: 4:20 pm PDT 6-27-2007

PHILADELPHIA – National A-1 Internet Inc., owner and operator of pay-per-minute video-on-demand website, among others, announced earlier this week that it will match the ultimate $10,000 grant makes to the Free Speech Coalition to support the FSC’s fight against certain amendments to the 18 U.S.C. § 2257 recordkeeping statute.

Read the entire article at AVN Online click here.

Fund is win win for investors and adult nightclubs

This is a seriously great idea. I know a few privately funding companies that have been doing similar things the past few years, and it works. This can be done in a way that is win win. Having been in the adult nightclub industry for more than a decade, I know there are great opportunities out there for adult nightclubs, strip clubs and swing clubs. If the right people are involved, things are run well, and preparations are made to handle legal battles, these clubs can turn good profits and have very low inventory and administration costs otherwise. There are several locales that we have been considering pitching to investors, as the right clubs in the right places can be quite successful and offer and excellent return on investment.
From AVNOnline:strip club

AdultVest to Launch Hedge Fund, Host Conference
By: Justin Bourne
Posted: 1:30 pm PDT 6-7-2007

BEVERLY HILLS, Calif. – AdultVest, a firm that seeks to match adult entertainment businesses with qualified investors, is preparing to launch a hedge fund within the next 45 days.

The fund will originate real estate loans to aid adult entertainment clubs’ expansion plans in the U.S. and Canada, according to AdultVest founder Francis Koenig, who said he expects loans to range from $500,000 to $10 million.

“Many of these clubs are not able to obtain [real estate] financing through banks because banks won’t lend to adult-use properties,” said Koenig.

With more than 3,700 gentleman’s clubs in the U.S. and Canada, Koenig sees enormous profit opportunity, but banks and firms may be hesitant to put “dirt on their sleeve,” so they are “missing out on tremendous profit” he said.

Koenig shrugged off any negative impact the fund might have on his personal or professional reputation.

“We have an opportunity to capitalize on a market that’s been ignored,” he told AVN Online. “One of the reasons people have shied away is because things are done in a bootstrap manner, but if they were done at a classier level, it would change people’s perception.”

The fund will offer returns based on the amount invested. For yields comprising the London Interbank Offered Rate Index plus 5 percent, the investment minimum is $5 million; for LIBOR plus 4 percent, the investment minimum is $1 million. LIBOR plus 3 percent requires $100,000, and LIBOR plus 2 percent requires $25,000. The fund will not charge fees.

If a club owner who receives a loan defaults, AdultVest can foreclose on the property and buy the club itself. By lending 50 percent of the properties’ value, the loans represent very low risk, Koenig said.

“It makes it a highly secured asset,” he noted.

In addition to the hedge fund, AdultVest manages two private equity strategies launched last year.

Prior to forming AdultVest in September 2005, Koenig founded Koenig Venture Partners, a hedge fund incubator and seeder. He started his work with hedge funds at the tender age of 14, as a researcher at his father’s hedge fund firm, New World Partners.

Later this year, AdultVest also plans to host the first annual AdultVest Investment Conference in Los Angeles. Koenig said the conference aspires to match institutional and accredited investors with adult industry related investment opportunities. To date, the company has received interest from more than 1,000 accredited investors, and nearly 300 adult companies have pre-registered, Koenig said.

Other recent news posted via Xbiz with details about the growth of the Ricks Cabaret chain proves that getting the right clubs in the right places, running them, will make big money.

excerpt from Xbiz:

HOUSTON — Rick’s Cabaret International Inc. announced Thursday that its May nightclub sales totaled just shy of $3 million, the highest monthly revenue the company has ever recorded.

Rick’s total sales in May were $2.8 million, 42 percent higher than the $1.9 million reported in May 2006, and nearly 14 percent more than the previous record of $2,485,043 set in April of this year.

Allan Priaulx, director of investor relations for Rick’s, told XBIZ that there were two key factors behind the consecutive record sales months for Rick’s — new acquisitions and repeat customers.

If you are interested in adult nightclub, swing club, or strip club investments talk tot he folks at adult vest, and contact us – we have a staff that has done professional consulting for adult nightclubs for more than a decade. We are also working on business plans and doing location scouting for three new adult club ventures, we may submit them to adultvest to be considered for inclusion in their fund, or we may go for 100% private – still on the fence at this time.

legal and business issues with online adult video

This is one of the best articles I have read all year.

From AVN / Written by Clyde Dewitt


Clip Those Wings: Controlling wandering video clips to safeguard your business.
By: Clyde DeWitt
Posted: 11:55 am PDT 6-7-2007

The prevalence of video on websites raises a number of issues. Some are legal; others are philosophical.

Video is flying around the Internet like crazy. Video-on-demand rapidly is becoming the preferred method of transmitting adult content. And why should it not be? It is convenient, spontaneous, and private—especially private—but  an assortment of issues arises from this phenomenon.

Begin with the unthinkable: The courts unilaterally approved 18 U.S.C. §2257 as written, and as the regulations are written. Well, aside from having to put the 2257 referral links all over your site (according to 28 C.F.R. §75.8(d), the words must read exactly: “18 U.S.C. 2257 Record-Keeping Requirements Compliance Statement.”), there are serious record-indexing issues. For example, a VOD site may have 25,000 titles from 200 different producers. Assuming all the titles post-date July 3, 1995, and there are an average of 10 performers in each title, that requires an index containing the records of nearly 250,000 performers. Let’s index them. Each performer requires an average of, say, three names. You are approaching a million data entries. Now, unless all 200 producers use the same computer program to keep and index their records—improbable, to say the least—someone will need to enter all that data and do it without mistakes. Suppose a data-entry person can enter 60 entries per hour. That’s more than 16,000 man-hours (or woman-hours). If the average data-entry worker costs $10 an hour and you factor in a workspace and equipment (that estimate is unrealistically low), that’s $160,000! Is this a reasonable burden on speech? Hardly!

With streaming video, there is a debate about whether it is more like a website, in which the link must be on every page, or more like a videotape—so if there are “end titles,” the 2257 disclosure must accompany the “end titles”—whatever they are—or appear at the beginning of the movie. The U.S. Department of Justice did not see fit to answer the streaming-video question in the regulations, despite public comments requesting they address it (nor did the DOJ think DVDs were popular enough to merit an explanation of where the 2257 labels must be placed). However, because 2257 is a criminal statute, the “rule of lenity” applies, which means ambiguities benefit the defendant. This is sort of like the baseball concept that the tie goes to the runner. With 2257, on the contrary, it is more like the infield-fly rule, which nobody understands and only exists because it is in the rulebook.

Now, let’s think about the difference between streaming and downloading. First, to be blunt, downloading is really stupid. The reason seems obvious: Once a movie or video clip is downloaded, you can be certain to find it all over PornoTube, XTube, and other file-sharing sites. Streaming at least requires a reasonably sophisticated user to convert the stream into an MPEG file, so there is a better chance your customer—and all his friends—won’t amass a bunch of stored-up content on their computers, thereby eliminating the need to purchase it. The recording industry has collapsed because of file swapping, to the point the adult industry is closing in on its annual sales. But, the adult industry is starting to go south with the escalation of high-speed connections, so that trend stands to change.

OK, enough ranting about downloading.

Regardless whether it’s a good idea, there is a 2257 component to downloading. There is no doubt that downloading a file requires the file to have the 2257 disclosure recorded at the beginning of the MPEG file, or at the end if it has “end credits.” (A link clearly will not suffice, because the MPEG becomes a freestanding movie.) When you are streaming, a link is good enough, if it can link.

Now for another rant, this time about sample clips: Many e-tailers, in promoting DVDs they are trying to sell, put up a clip from the movie in an attempt to promote it. That’s fine, but clips that get too long become scenes, which can be put together by the viewer to turn into his own little compilation, once again eliminating the need to purchase your product. It certainly is easier to take a chunk out of the movie and make it into a clip, but it is much more prudent to do some editing and have a clip that cuts from scene to scene in two- or three-second intervals. Don’t give away your product!

A recent “Legal Angles” column in AVN made note of what plainly seems to be the greatest threat to this industry: the proliferation of sites that are X-rated versions of YouTube and Google’s video-search function. Moreover, people are posting 15-minute clips, and that’s basically a “scene.” Why buy something you can get free, and why in the world would a company that is in the business of selling online viewing want to set up an X-rated YouTube? I won’t mention any names, but you know who you are: Your company name increasingly appears in court documents, situated immediately below the “v.” and immediately above the word, “Defendant.”

Are these people infringing copyrights? That is the zillion-dollar question. The contention that sites such as YouTube make is that they fall under the “safe harbor” provision of the Digital Millennium Copyright Act. Not so, think some folks, because both YouTube and its X-rated equivalents have been sued for copyright infringement. And, in YouTube’s case, there is a well-stocked arsenal on both sides. Still, understand what is at stake. If there were 10,000 copyright-infringing clips on the site—and that assumption isn’t unrealistic—that would equate to a minimum of $7.5 million in statutory damages. Even if willful infringement is not established (which is not a stretch), the $30,000 maximum times 10,000 is equal to $300 million! That’s some serious cash, all riding on whether it qualifies for a safe-harbor bailout!

This column is not going to predict the outcome of these lawsuits, but one thing seems clear: Congress eventually is going to jump into the fray, no matter what happens. On that front, this column will venture a prediction: A compulsory license will be enacted, as it is with music.

The best example of how a compulsory license works is in the American Society of Composers, Authors, and Publishers. You might have noticed ASCAP stickers at restaurants and bars. Here’s how it works: An artist who produces a sound recording—and for this example, we will assume the artist is a one-man band with original music—can’t prevent you from playing it the same way the owner of a motion picture work can. But, the artist can make you pay.

ASCAP is sort of a collection agent. Representatives for ASCAP will show up at a bar with a jukebox and inquire as to whether it has an ASCAP license. If not, the representatives happily will sell a license to the bar’s manager, because the representatives earn commissions. The bar pays the license fee, and then it can play all the ASCAP-protected music it wants with impunity. If the bar is uncooperative, then lawyers are pressed into service, filing suit for copyright infringement. Then the bar pays. Monies collected by either method are distributed to the artists according to some complex formula.

Everyone knows the YouTubes of the world are making a fortune generating traffic. The artists want a piece of that traffic, which is what this war is all about. The two most significant battles in the war will be, first, who wins the lawsuits and, second, how Congress divides the spoils among the “safe harbor” sites and the artists.

Stay tuned!

With the adult industry actually going into a downturn both online and off, there are some issues discussed here that should be seriously considered. Many of the things that webmasters are doing trying to make more money and get more traffic are actually counterproductive to the entire industry. These are interesting times for copyright and digital rights both in and out of the adult world – where things go the next couple of years will be quite interesting.