For years, Vivid Entertainment displayed its logo on a prominent office building in the Cahuenga Pass near Universal City – a visible sign that confirmed the importance of pornographic film production in the local economy. But recently, the sign was removed from the multi-story structure at 3599 Cahuenga Blvd. “Vivid is no longer headquartered on Cahuenga and as new tenants move in, it made sense to remove the signs,” Vivid owner Steve Hirsch said in an email to the Business Journal. Bree Mills, an adult film director and head of production at Gamma Films Group, the production entity of Gamma Entertainment, a Montreal-based web technology company, said that the last time she was in the building it appeared that Vivid had ceased all operations there except for its online radio shows. “The sign was the biggest part of the office space they had,” Mills said. “I didn’t actually see the name being taken down although I wouldn’t be surprised if they don’t have much of any operations going on in that building beyond the one or two radio rooms that they had.” Where is the industry? For decades the San Fernando Valley has been synonymous with the porn industry, and Vivid was one of its most high-profile companies. So the disappearance of the signage raises the question: What happened to the industry? Because of the private nature of the companies that make adult content, just how much money the industry brings in is not known. In an article last year from Quartz Ideas, a business news website in New York City, Alec Helmy, founder and publisher of adult-entertainment trade publication XBiz, said his best guesstimate is that the industry generated about $6 billion. “It was based on a survey that we basically took of the adult industry,” Helmy said in an interview with the Business Journal. “That was the figure that received the highest responses.” Whatever the number, there is no denying that porn is still big business in the Valley. Mills and Helmy said that Los Angeles remains one of the big hubs for production because of the large community of talent and crew members here. The mainstream entertainment industry means there is a range of makeup artists, sound engineers, production assistants and people behind the camera who are looking for work that have experience in both adult and mainstream production. Mills films in a mix of studio space and private residences in and around the Valley. “It has been the epicenter of adult production in the U.S. for decades and decades, so there is good rich history here in terms of infrastructure and ways of working and ways of shooting that is not as common in smaller production hubs in the U.S.,” she said. While a lot of content creation has shifted to other parts of the country – Las Vegas and Miami are popular with adult producers – the center of the porn production universe remains in the San Fernando Valley, Helmy said. “That is evident in the number of talent agencies that operate in Southern California,” Helmy added. “It is still the hotbed for porn production.” Sherry Ziegelmeyer, an adult industry publicist with Black and Blue Media in Canoga Park, said that changes to the industry have impacted how content is made. “Do they still shoot here? Yeah, they do,” Ziegelmeyer said. “They drag stuff out, shoot some scenes, smack them together and put them out on a website.” The days of huge openings for adult films are long over, she added, although it’s not because people don’t want to see those kinds of films. Shoots are now smaller and done quicker with an eye toward immediate distribution on the internet. “The people who are running the businesses are sitting there going ‘We’ll shoot it today, get it in the can tomorrow and get it up on the web to make some money,’” Ziegelmeyer said. The internet has brought more changes to the adult industry than any other technology, including videotape and DVDs, both of which brought their own changes. The proliferation of tube sites with free adult content means that customers don’t have to pay for porn unless they choose. MindGeek, a Montreal private company with offices in Burbank, owns some of the biggest online adult video sharing sites, including YouPorn and PornHub. But Mills is of the opinion that people will pay for adult content – if it’s done well. To compete against free content, Gamma Films has broken the mold of what adult films can be with original series that mimic shows found on streaming sites but include an adult spin. “I am making television, it is just that I am making television for adults – television that includes sex within the episode,” Mills said. At Adult Time, revenue is generated through subscriptions that cost $19.95 for a month, or $9.95 per month if paid for a full year. Product diversification Ziegelmeyer said the word that best describes the state of the adult industry is diverse. It’s gone beyond the idea of entertainment and is now into the realm of promoting lifestyles via the internet. “It is not so much about adult entertainment anymore but is more about people throwing stuff at the wall and seeing how much money they can make,” Ziegelmeyer said. She identified two developments that show the diversity of the industry. One has to do with a product – cannabis – and the other is financial – cryptocurrency. The legalization of recreational marijuana in California last year conjured up dollar signs in the eyes of people in the adult industry, Ziegelmeyer said. A story from November in the online magazine of Lift & Co., a Canadian cannabis lifestyle company, took on directly the connection between porn and pot. It quoted Kristal Penn, the spokesperson for Emerald Triangle Girls, a cannabis-centric adult company, as saying that many adult performers are advocates for cannabis and its medicinal uses. “In fact, you’ll see adult performers and companies crossing over to establish their presence in the cannabis industry and others who have been long established,” the story quoted Penn as saying. “The cannabis and adult industries share a stigma that lessens when we see more diverse representations of both.” XBiz’s Helmy, however, does not see much crossover between cannabis and porn. “I am not sure about cannabis and porn and if there is much of a trend there,” Helmy said. As for cryptocurrency, Helmy said it has become a hot topic in adult circles. Cryptocurrency, also known as virtual currency or digital currency, differs from paper and coin currency in ways other than by lacking a physical object. No central bank controls it and no governments back it. Transactions occur between peers. Creating new cryptocurrency occurs in a network through a complex mathematical process called mining. Because virtual currencies offer anonymity for the users, they are popular for payment on porn sites. Acurrency called OGO coin is offered and used by production company VogoV in Studio City, according to an October article in Forbes. Some leaders in the online space have adopted cryptocurrency as a form of payment, including tube site xHamster and porn studio Naughty America in San Diego. But by his estimates, cryptocurrency represents less than 1 percent of payments processing in the adult industry, Helmy said. “It is still very bleeding edge,” he added. Business structure Gamma and Vivid entered into a strategic partnership with each other last fall that had Mills and Gamma Films taking over production duties while the Gamma Broadcasting Group division maintains the daily operations for Vivid TV. Vivid’s Hirsch did the deal because he came to the realization that he wanted more out of life than going to an office all day and thinking about business all night, he said in his email. “There’s more to life than that and I am fortunate enough to be able to experience it,” he added. “The truth is I’ve never been happier.” Hirsch remains as owner of Vivid, which was not acquired by Gamma but remains a separate company. In his email, Hirsch said that he is available to Gamma for consultation. In a statement released when the Gamma/Vivid partnership was announced, Hirsch said he was confident that Vivid’s fans would like the films and series that Mills would produce. “We know she is determined to make Vivid’s star shine even brighter,” he said.