For decades, the San Fernando Valley was the epicenter of pornographic film production, taking on nicknames such as “the porn capital of the world,” “the San Pornando Valley” or simply “Porn Valley.” But today, much of the industry has evaporated, and most of what is left has moved to other places. The Internet, piracy and government regulation have turned a once-thriving local industry into a memory. “The ironic thing is that at this very second, watching porn has never been more popular,” said award-winning adult film director Jeff Mullen, who goes by the pseudonym Will Ryder. “However, the fact that most of it is watched for free drives nobody’s economic engine, especially in the San Fernando Valley.” The Internet provided the platform for free porn and piracy, which is exploited by “tube sites,” or websites that mimic the YouTube business model, where money isn’t made from content but from advertising. Many of those sites contain uploaded pirated porn, provide it to viewers for free and make money from advertisers based on the number of visitors to the site. Traditionally, only businesses related to the adult industry would advertise on tube sites, such as paid porn sites and sex toy companies. However, more mainstream advertisers are beginning to buy a piece of the porn audience. Food apps Eat24 and Zomato have started taking advantage of the high traffic on triple-X sites and the low costs to advertise. Italian apparel company Diesel is also launching a campaign this spring to market its jeans on PornHub and Youporn, which are outlets owned by global IT company MindGeek. Advertising on tube sites generates substantially less revenue than traditional porn DVD sales or website subscriptions. In response to the rise of free porn, brands such as PornHub have created paid-subscription platforms with a “freemium” business model. Some content is free but for a monthly fee members receive access to exclusive content minus ads and pop-ups. Multiple revenue streams To survive in a porn market where customers expect free entertainment, Valley companies have taken different strategies to monetize their content, including moving production elsewhere or looking beyond porn to other sectors. Located in Van Nuys, distributor Evil Angel was founded by porn actor, producer and director John Stagliano, who still serves as chief executive. Initially, Stagliano would fund, direct, produce, edit and distribute his own movies. Eventually, the company moved into distributing other adult movies for a fee, and presently operates as a co-op. Evil Angel purchases exclusive worldwide licensing rights of finished movies along with marketing materials from one of the 18 producers the company works with. From there, Evil Angel will prepare the movie for DVD, TV, Web release, video on demand and other platforms, creating various revenue streams from the same content. Unlike most porn companies, Evil Angel continues to maintain its DVD business and still ships about 40,000 discs per month out of its Van Nuys facility. “We are probably the only old-school adult brand that has pivoted to a primarily online business and has been really successful at it,” said Adam Grayson, chief financial officer at Evil Angel. “Web subscription is our biggest sector here. I don’t think any company that existed more than 10 years ago can say, ‘We’ve weathered the storm really successfully.’ But there aren’t a whole lot of other ships on the sea, if you will.” He added that Evil Angel’s DVD sales are remarkably healthy, but that’s the exception to the rule. “The hard goods business as a whole has been pretty decimated,” he said. “There just is not a big demand for adult DVDs anymore because of the Web.” Another Valley company that has adapted to stay in the game is Immoral Productions of Chatsworth. In 2012, voters passed the County of Los Angeles Safer Sex in the Adult Film Industry Act, or Measure B, requiring the use of condoms in porn productions filmed in the county. Although not widely enforced, many in the local porn industry felt personally targeted by what they deemed unnecessary government intervention. “This is criminalizing a legal industry in the state of California that diligently pays its taxes, employs thousands of blue-collar workers and has not had an HIV infection in 10 years,” said Eric Paul Leue, executive director of adult entertainment industry trade group Free Speech Coalition in Canoga Park. On Feb. 18, the California Division of Occupational Safety and Health’s Standard Board voted a similar statewide measure down after dozens of porn industry representatives argued against it during a public hearing in Oakland. L.A.’s AIDS Healthcare Foundation has lobbied for required condom use in adult films for years and largely sponsored Measure B. The organization is campaigning to get voters to approve a more stringent statewide initiative that will be on the ballot in November. The foundation did not respond for comment. But San Fernando Valley companies had mixed reviews on the effects of the measure. “The county has not enforced Measure B, but there was a certain fear element,” said Adam Grayson, chief financial officer at Evil Angel in Van Nuys. “I can name a number of producers who just said I don’t want to be here when the other shoe drops, and they just left.” As some companies fled, others considered it a nonfactor. “There is absolutely no difference in sales between condom and noncondom scenes for us,” said Dan Leal, owner of Immoral Productions in Chatsworth. The company started originally as a subscription-based website and DVD business like most traditional porn companies, said Dan Leal, owner of Immoral, who goes by the pseudonym Porno Dan. “I started shooting live as a way to try to get an extra revenue stream, because you can’t steal a live feed,” Leal said. “As it turned out, shooting live ended up becoming my primary revenue stream.” Immoral shoots about eight to 10 scenes a week and puts out two DVDs a week. It will also take that same content and repurpose it for websites, video on demand and terrestrial TV broadcast, and will later license it to other companies. To make this model work, Immoral must keep production costs down, which is why Leal splits his time between the United States and Europe, where he says the talent pool is better and production costs are lower. He cited Budapest, Prague and London as popular places to shoot porn overseas. “At one time, there were over 200 (professional pornography) scenes a day shot in the San Fernando Valley alone,” said Leal. “Presently, there are less than 50 scenes a day shot in the entire U.S.” Big players While some Valley companies have moved to other locations such as Las Vegas and Europe, many others have simply folded. Even the Valley’s largest porn company, Vivid Entertainment Group in Studio City, has shifted its business focus from primarily porn production to other endeavors, including brand licensing for products such as vodka, condoms, skateboards and sex toys. Vivid declined to comment for this story. And the company that launched pornography as an industry, Playboy Enterprises Inc. in Beverly Hills, has moved away from its original business toward licensing its bunny logo and brand name. In February, the company published its first magazine without nude photos. One reason cited by management for the change was the ability to attract mainstream advertisers. The Wall Street Journal reported on March 25 that Playboy had hired an investment banker to explore selling the entire company. As for the future of porn, increased interactivity might be on the horizon as technology continues to develop at a rapid pace. LifeSelector.com personalizes porn by allowing its users to select different environments to create customized experiences. In addition, virtual reality porn was featured at this year’s Consumer Electronics Show in Las Vegas by porn producer Naughty America of San Diego. “Porn as we know it used to be the bread and butter of the San Fernando Valley,” said Immoral’s Leal. “If it is not dead yet, it will be very shortly.”
