The porn industry is contracting somewhat, and familiar faces at some companies are either leaving porn altogether or are moving to other companies to be familiar faces there. I’ll mention some people in the latter category.
My pal Joanne Cachapero at XBiz will be leaving to become Membership Director of the Free Speech Coalition, an adult industry lobbying group. Farley Cahen of AVN will move to Digital Playground in a “New Media” position, leaving his current job open (and I hear there are editorial changes coming to AVN as well), Tom Hymes of XBiz, formerly of both AVN and the FSC, is now the managing editor of Sex.com.
Q. Since you are integral to the success of these companies, Grams, what do these changes mean for you?
A. Thanks for asking. There is a chance that, after the Pirates 2 review Joanne and I write for XBiz this month, our review column in XBiz Premiere will go away, because the company will then have to pay two people as freelancers rather than one. Then, if I become publisher of AVN, I would no longer be able to write for XBiz because, like Rush’s “New World Man,” both companies desire to keep their nature pure.
Once upon a time people said that Porn was recession-proof, and that remains true if you think of it in terms of what people used to say about sex before marriage: Why buy the cow when you can get the milk for free?
The amount of free or undercut porn on the Internet, coupled with pay-per-scene or pay-per-minute schemes, has crippled the ability of larger features to attract the audiences they once did. And audiences coming of age in a time when porn is more free than ever and accessible in bite-sized form don’t appreciate the “classics.”
Companies like Hustler strike when the iron is hot (such as with Gov Lov and the upcoming Lisa Ann-as-“Sarah Paylin” movie) and must resort to increasing levels of gimmickry to approximate the cash that once came so easily.
Porn personnel are “laying low” (I have heard this phrase several times): not advertising as much, throwing fewer parties, and not spending as much on productions. Visitors to the January 2009 Adult Entertainment Expo will see less extravagant booths, and fewer of them. Luckily, consumer tickets to both the Expo and the AVN Awards should somewhat compensate.
If DVD sales are down, the exception might seem to be Pirates 2, which is less a movie than an event and, as singular an event it is (more off the record sources from other companies say they’ve already accepted that the movie will sweep the major awards next year and hope only for its scraps), considering the average ROI on porn titles, it does not seem possible that Pirates 2 could have been financed in-house, in the same way that some of the “blockbuster” porn movies of the past few years have been financed with money not generated specifically by the company that produced them. Instead, they have been financed by the mainstream “real jobs” of their owners.
And while porn industry insiders blame company owners for long ago sacrificing “tangibles” to the Internet or sluggishly enforcing copyrights, if at all, now the outside economy is further darkening Porn’s door.
Nick Denton, founder of the Gawker website empire (and who, if my Fleshbot checks weren’t direct-deposited, would sign them) sent out the following memo informing his employees of staff cuts at those GawkerMedia sites that were underperforming:
I have some bad news. Here’s the heart of it: we are cutting 19 of our
133 editorial positions and suspending bonus payments at the start of
next year. With the savings, we are increasing base pay and hiring 10
new people on the most commercially successful Gawker sites. But I
know that’s scant consolation for the colleagues we’re losing and for
those of you who have been enjoying the bonus windfalls from breakout
stories.You can guess the reason for these brutal measures: the recession.
Sure, the company is currently profitable and advertising sales are up
by about 30% on their level of a year ago. Our biggest clients are
consumer electronics and entertainment companies that are relatively
well insulated. And, yes, this is not the first time I’ve predicted
doom: in July 2006, when we “battened down the hatches” and closed
down Sploid and Screenhead; and in April this year, when we spun off
Idolator, Gridskipper and Wonkette.But now the credit crisis is clearly going to affect every sector of
the economy. Advertising buys typically plunge after the Christmas
shopping season, and 2009 is obviously going to be exceptionally
difficult. We have to prepare for the worst, now, rather than when the
worst comes upon us.We never used to talk about the business side of the operation.
Traffic was the only concern; my belief was that juicy news would draw
the readers and the advertising would take care of itself. We were
patient; even if it took four years for a site to develop the audience
that finally registered with advertisers, we had the time. No longer.Sites such as Consumerist, whose success has been measured more in
traffic and recognition than in revenue, now need to cover their
costs. I can’t underline enough that this harsh commercial judgment is
no reflection whatsoever on the editorial teams that are being cut.Each of these sites performs a vital function. Consumerist provides an
outlet for disgruntled consumers that exists nowhere else on the web;
Valleywag has given puffed-up Silicon Valley the prick it’s long
needed; and Fleshbot manages to be classy and filthy at the same time.
The site leads and writers on all of our sites have done exactly what
we asked them to: work harder than the competition and grow the
audience. It’s my commercial judgment that’s been at fault.One reason we’re eliminating these positions is to reinforce the teams
on the sites with the most commercial appeal—Gizmodo, Kotaku,
Lifehacker and Gawker—and the properties such as Jezebel, io9,
Deadspin and Jalopnik which are poised to join them.One new recruit we’re confirming today is Gabriel Snyder from W
Magazine in Los Angeles who, as managing editor of Gawker.com, will
continue the site’s evolution into a national news and entertainment
site. We are also hiring new contributors at Jezebel, Deadspin, Kotaku
and io9.Even in the growing editorial teams we need to control costs. And that
means a new look at traffic bonuses. We’ve been spending $50,000 a
month on average on pageview bonuses. The scheme has made writers
hustle for traffic even in teams so large that there was a risk they
become lumbering. It’s helped us hit a record 274m pageviews last
month, up 69% on last September.Pageview bonuses will continue this quarter. And we are committed to
pageview incentives, and to measuring performance by a writer’s
individual pageviews, in the long term. But a first quarter spike in
traffic — and the resulting bonus payments — could be dangerous if
advertising markets are troubled next year. And we’re assuming that
the economy is so volatile that most of you would like a little bit
more predictability about your own income.That’s why we’re suspending the pageview bonus for the first quarter
at least, but making up for some of the loss of income by raising pay.
If you haven’t recently agreed to a new rate, your monthly base amount
will automatically be increased by 5% in January.The news about the job and bonus cuts will be demoralizing. The golden
age of the blog is over, people will say. Gawker Media is behaving
like those big media companies that we mock so easily. I could come up
with some bullshit line about how much worse it would have been to
wait until we were forced to control costs; or how much more
unpleasant life will be at the many internet ventures and newspapers
that won’t make it through the downturn. I could give you my
optimistic spin about the glorious future that awaits us on the far
side of this downturn.But there is no escaping the fact that we’re losing some excellent
colleagues and the environment next year will be bleak. The one
consolation is that there will be plenty of news for us to break —
starting with this email, which you are free to leak.
Luckily, I am still Senior Erotic Consultant at Fleshbot; my job was not cut. But things are tough all over, and you can expect it to get worse before it gets better.
Previously on Porn Valley Observed: When Black Friday comes to AVN
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