Stewart Wolpin

How To Save HD DVD
January 30, 2008

Dirty movies.

Oh, you scoff. You snigger. You snicker. You sneer.

First, bare in mind (the first of many ridiculous double entendres to come) the adult video industry generates more revenue than the NFL, the NBA and MLB combined, at least according to Farley Cahen, licensing director at AVN, the Consumer Electronics Association (CEA) of the adult world. 

Even though there doesn’t seem to be any hard numbers, estimates are that dirty movie annual revenues are around $12 billion to $13 billion, a little less than $1 billion of that coming from DVD sales. By comparison, mainstream Hollywood generates around $42 billion, an estimated $23 billion of that from DVD sales.

But adult DVD producers also are losing share and profits to the growing availability of online content and see high-def DVD as a way of pulling adult video purveyors away from their PCs. HD DVD's streaming technology combines the best of both worlds.

Okay, high-def DVD makes sense to the this business. But I hear you asking, why would that even occur to me?

The last day of CES I finally made it over to the Sands exhibits. Adjacent to the CES exhibit hall was the Adult Entertainment Expo (AEE). My mind flashed back to 1984 when the home video business was still new and the AEE was at the Sahara where the high-end audio exhibits were located. An acquaintance convinced me to enter the forbidden zone, where I stood nervously online for an autograph, head down and eyes averted, hoping no one would see me. The signature was duly recieved and the photo it was written on was so well done, a peice of art really, that I've kept it till this day.

I also remembered how the mainstream home video world was torn about adult films. We all know that these were a, if not the, prime driver of the home video business; we know it, but no one wants to talk about it. Two consumer video magazines I wrote for wrestled with the two-headed snake of lucrative adult video advertising. Reputation (and hypocritical blue noses) trumped fiscal common sense, and both magazines dropped adult ads.

Both magazines are gone now. I'm not saying there was a direct cause and effect between dropping adult advertising and the demise of the magazines, but I'm willing to leave that impression. Especially since those ads probably paid for my freelance contributions.

With sales and prices of HD DVD hardware dropping faster than Ron Jeremy's pants, Toshiba could soon be faced with this same reputation vs. survival dilemma.

So, I finagled press credentials to AEE to find out what the adult industry thought about high-def DVD. Dodging around lines of slack-jawed droolers waiting online to slobber and get autographs from barely dressed "actresses," I scored interviews with executives of all the top adult video studios, all finding it refreshing to talk to a reporter about something other than the obvious.

And I found out the HD DVD camp had beaten me to the adult video connection. 

A few months before the release of the first Blu-ray player, Ali Joone, president and founder of Digital Playground, the second largest adult video production company, was approached by an HD DVD "middleman" with an offer of technical assistance and equipment to produce titles in HD DVD. Joone accepted. As a result, Digital Playground is the leading high-def erotic film producer with 15 titles on HD DVD and just one on Blu-ray.

Joone was approached again a few months ago by the same "middleman" and asked to sign a two-year HD DVD exclusive deal. But by that time, Blu-ray software was outselling HD DVD two-to-one. In fact, Digital Playground's most popular title, "Pirates," an adult, er, remake, of "Pirates of the Caribbean," is available in both formats. Joone said the BD version outsells the HD DVD also two-to-one, so he turned down the HD DVD exclusivity offer. Digital Playground plans to release eight to 12 high def titles this year in both formats. "If we're making money on it," Joone sagely observed, "we'll continue to make HD DVD."

Other adult DVD companies are dipping their toes into the high-def waters. Many already are shooting their content in high def, awaiting, you'll excuse the expression, deeper penetration of high-def DVD hardware before releasing titles in either format.

Right now HD DVD has a slight edge. In addition to Digital Playground, industry leader Vivid has four titles available in HD DVD and two in BD. Hustler has three HD DVD titles and one BD, and plans on 20 to 25 more next-gen DVD releases in either format this year. In December, Anabolic began day-of-date releases in BD, HD DVD and SD DVD, with the next titles due in the spring.

No one other than Digital Playground admitted being approached by the HD DVD camp, the key word being "admitted." But it seems the HD DVD camp has a quickly closing window to procure some degree of hegemony over a willing and ready market.

"It would be monumental if a mainstream company came to work collectively with the [adult] industry," AVN's Cahen said. "But it won't happen because no one in the mainstream wants to tie their cart to adult."

Well, Toshiba may want to think about it. After all, is it better to be known as the adult film high-def DVD maker or the ex-high-def DVD deck maker?

Posted by Stewart Wolpin on January 30, 2008 | Comments (2)