Luke Ford’s done some math which makes a convincing claim the adult industry’s public statements on the total size of the skin-flick market are an order of magnitude over-rated.
According to figures from the VSDA (Video Software Dealers Association), and with a little interpretation via Mr. Ford, it was a $400M business in 2005, not a $4B one.
What Percentage Of DVD Releases Are Porn?
According to the 2005 Annual Report by the VSDA, it was 2%.
VSDA estimates U.S. DVD/video sales and rentals at $24.3 billion for 2005. Two percent of that figure would make DVD porn a $486 million business in 2005, down from AVN’s estimate of $4.28 billion.
According to the VSDA, there are approximately twice as many dollars spent on sales as rentals. If this ratio holds for porn, DVD/video sales would amount to $324 million for 2005.
If there were 13,600 releases in 2005, the highest possible average (median) number of units sold per title would be 1,000 and the median price would be about $10 each, which would make for total DVD sales for 2005 releases at $136 million.
According to experienced distributors, sales in dollars for new titles the calendar year they are released are about half of those for catalogue (older titles). So the combined sales of new titles ($136 million) and catalogue ($272) would equal $408 million for 2005.
If the six biggest DVD producers sell no more than $100 million total a year, it makes sense that the rest of the market would amount to only three times that $100 million figure.
To be fair, I would suspect that a lot of sales and rentals go unreported. In many places sales of adult movies are restricted and, given how easy it is to duplicate DVDs, there’s undoubtedly a lot of unlicensed retail activity.
Regardless - porn films clearly aren’t the cash-cow they once were (and no, Deep Throat didn’t make $600M back in the 70’s whatever you’ve read claiming otherwise).
In an industry where some people still ship VHS and think downloads are something that people will want ‘in the future’ is decline surprising?
So, what do you think is the reason for such a significant miscalculation? Conspiracy?
Ms. Kitka - The wholesale price of product has dropped below a dollar of many adult movies, which makes the margin pennies. I doubt there’s any conspiracy - just lots of privately held companies lying about their margins. Porn’s a lot like the music industry. If someone has a million dollars they might spend half of it on a car. If you assume anyone in a $500,000 car must have at least $10M you get it all wrong. It’s very easy to believe there’s more money out there than there is because it’s so lavishly spent. If you’ve followed Asia Carerra’s recent troubles you’ll see a fine example. The only numbers you can trust come out of public companies but those which deal in hardcore can be counted on the fingers of one finger in America.
The Asia Carerra thing caught me off guard. She was supposed to be renound for managing her investments well. I remember her being written up in the Wall Street Journal as well. So I wonder if there is something deeper in that paticular case that leaves her strapped in liquid assets, but may be better off in the long term. But no matter what, it is awefule the situation she is in right now.
Porn pays well, but not that well. From the few bits of hard data I have been able to find, I know that I, as a Software Engineer, make more than most performers out there. Of course I made more in my first job than my mother (a teacher) ever made in any one year — but that is a crime for another time.
Jock - you’re right. Most performers earn a decent, not spectacular, living. It all depends on how hard you work and how smart you are. There’s been a lot of talk about Asia’s situation. She’s always been very nice to me and I can only wish her well. Lots of plausible ideas have been presented but as they’re all just rumors I’m not going to pass them on. It’s really a talking point because she has been so vocal about her ‘genius IQ’ and business acumen. Sad.