Something wicked this way comes

Absent for much of the decade, porn is mounting a comeback

Eight years after the city of Cannes cracked down on the adult entertainment industry, porn is slowly returning to the Marche.

In 2001, the Cannes city government shut down the Hot d'Ors, the industry's awards show that took place alongside an adult entertainment market that ran at the same time as the festival.

In truth, it might have happened anyway. Attendance at the Hots had been falling for years. The explosion of so-called gonzo porn in the mid-1990s -- porn's equivalent of cinema verite, featuring amateur camera work and improvised plots -- had lowered the bar to entry into the adult business. Now anyone with a camera and a few willing performers could make it. And they did. Trade magazine Adult Video News estimates at its peak, about 25,000 films were being shot every year.

Porn never entirely disappeared from the Croisette -- there was still the occasional VIP party -- but the thrill had gone.

Now it is slowly returning.

Its public face is not Ron Jeremy, however -- that's the '70s portly porn legend. Or the slick, "Sopranos"-esque John Stagliano, who pioneered gonzo porn with his "Buttman" franchise. It's Armani-clad executives like Steven Hirsch, the head of adult video giant Vivid Entertainment, with his toned physique and graying hair combed back banker style. Or Ben Jelloun, CEO of porn giant Metro Content, whose bespoke outfits and Colgate smile give him the air of the NASDAQ stocktrader he used to be. Or Berhard Hofstetter, the discrete former banker who runs German softcore giant TMC Content Group.

Porn, like the Hollywood studios it has always shadowed, has gone corporate.

You won't find Stagliano's "Big Butt Attack" at Cannes. But ask nicely and you might get a screener for high-end adult features such as Digital Playground's porn on the high seas epic "Pirates II: Stagnetti's Revenge" or recent Wicked Pictures' titles including fantasy thriller "Fallen."

This sort of adult entertainment, with its professional sets, slick packaging and relatively cringe-free dialogue, doesn't look too out of place next to the B-movie schlock that accounts for a good portion of the Marche offerings.



"Cannes for a while was really uptight about screening adult material, but that's changing," says Joone, the one-name director of "Pirates II" and a founder of Digital Entertainment. "We're back this year and we've seen a lot of demand for our films, even from very mainstream outlets."

Joone's style of cowboy hats, tinted glasses and the occasional gold chain is more in tune with porn's popular image. But beneath that wild west exterior beats the heart of a corporate CEO. Like the rest of the porn elite, Joone is as comfortable talking about international distribution and multiplatform exploitation as he is about corn holing and cum shots.

Jerry Halford, CEO, Europe for AVN, believes the adult industry -- at least the respectable corporate end of it represented at Cannes, may even have something to teach mainstream Hollywood.

"Much of the adult industry is doing better in the recession than the mainstream business is," Halford says. "They seem to have adapted faster to new technologies and found ways to make money that Hollywood hasn't figured out."

Juniper Research values the global porn business at about $60 billion, with about $12 billion of that in the U.S. AVN figures about 11,000 adult features are produced annually. The number of Internet porn sites has been estimated at about 5 million worldwide, accounting for up to 15% of total online traffic.

More concrete is the value of the mobile porn business, the fastest-growing segment of the adult industry, where Hollywood has the most to learn. Erotic content brought in $2.2 billion worldwide last year, according to Juniper, which based its figures on info from mobile providers. Europe, with its greater mobile reach, accounts for about 45% of the business. By 2012, Juniper forecasts the adult mobile entertainment industry will be worth $4.6 billion worldwide, with about $600 million of that coming from the U.S.

"The big providers -- the Vodaphones, the Oranges, the T-Mobiles -- dominate the market and are squeezing margins," Hofstetter says. "But with the next generation of high-tech phones, we are seeing new growth opportunities, especially for high-quality, feature-length material."

Hofstetter says short clips and novelty items -- for example "moantones" ringtones -- are on the way out. Video streaming and interactive services -- both mobile and online -- are on the way in.

Metro Content, for example, has set up a highly successful site, MetroBabes.com, featuring exclusive live one-on-one chats with top XXX stars such as Alexis Texas and Jenny Hendrix. Similarly, Vivid Entertainment has been a leader in bringing its content onto new platforms, pioneering the VOD field and offering new services like burn-to-DVD technology.

Joone says the direct B2C business is particularly important in the online and mobile worlds, where there can be too much choice and amateur material competes with high-end product. "The studios are trying it now but this has been our model from the start," he says. "It's the direct-to-customer thing," he notes. "It's all about direct contact with the consumer, getting rid of the middle man."
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