For the better part of two decades, the Video Software Dealers Association’s annual exhibition has provided an entertaining forum for entrepreneurs, studio executives, distributors, analysts, reporters and B-list celebrities. The convention not only was a terrific three-day party, but its well-attended seminars also helped spread the word about such advanced digital products as CD-ROM and DVD, while also encouraging spirited debate over such competing technologies as Beta, VHS and laserdisc, DVD and DIVX, and the delivery of movies via satellite and cable.
VSDA also was a place where dealers and their spouses could have their pictures taken with such stars as Leslie Nielsen and Hulk Hogan. They also were wined and dined each night by studio executives who, even then, were plotting to cut out the middleman and stream movies directly into the home.
Judging from the spare booths and acres of unoccupied exhibit space that greeted VSDA members earlier this month at the Sands Expo Center, however, those happy days appear to be gone. In fact, the VSDA actually had to share the hall this year with a gathering of hunters and the vastly more entertaining Adult Entertainment Expo.
Once upon a time, the purveyors of XXX video products would put together what amounted to a splashy sideshow to the much-larger and louder VSDA. It always was well attended — by both men and women — if only because the scantily clad porn stars gave the dealers something to talk about when they returned home to Boise or Biloxi, besides Disney’s lavish banquets.
But the dirty little secret of the video industry always has been that the only way the mom-and-pop stores could withstand the rising tide of Blockbuster and other retail chains was to maintain a backroom filled with adult fare. Pornography largely fueled the incredible early growth of VCRs, and its purveyors were the primary allies of shopkeepers who lived in constant fear of being wiped out by the studios.
Because some of the big video chains refused to handle NC-17 and XXX titles, the mom-and-pops were left alone to promote such product.
Eventually, though, small retailers found it difficult to justify costly trips to Las Vegas each July, and the once-proud VSDA convention uprooted itself to L.A. Instead of thriving in the shadow of Hollywood, however, the VSDA was upstaged by a concurrent gathering of porn distributors, scantily clad sirens and sex-toy producers, most of whom where based in the San Fernando Valley.
The Adult Entertainment Expo was a hoot, as it combined all the fun and frenzy of VSDA in its heyday — complete with autograph sessions, free Polaroids and software demonstrations — with the serious business of introducing new products and renewing contacts with dealers.
The adult distributors weren’t at all reluctant to demonstrate their passion for and success with CD-ROMs and DVDs, both commercially and creatively. They also were witnesses to the fact that VHS could easily co-exist with any new technology, including streaming video on the Internet, a business Hollywood still can’t master.
Last year, in an effort to breathe life into its dying swan, VSDA decided to move its show back to Las Vegas, and stage it in January, when more than 100,000 kindred spirits would be in town for the Consumer Electronics Show. Coincidentally, January is now when the adult industry holds its biggest show in Vegas.
The side-by-side conventions couldn’t possibly have been more different in tone, but not because the video-software industry is collapsing. As was reported at the VSDA’s opening session, retailers registered their best rental year ever in 2000. Business was up 2.2 percent, to $8.25 billion, according to VidTrac, thanks in large part to the public’s acceptance of DVD.
Meanwhile, total revenues from video sales and rentals hit $20 billion, or roughly three times theatrical box office. This after a year that was considered flat, and raised concerns about the demise of the 20-year-old medium.
Not apparent in these numbers are the revenues generated by adult videos, DVDs, CD-ROMs and other electronic delivery systems. Most educated guesses put the total at around $14 billion a year, with Internet sites and streaming media responsible for about $2 billion of that figure.
Chicago-based Playboy is one of the few mainstream companies to have actually figured out a way to exploit the new technology. Hollywood’s idea of convergence was limited to putting the address of a film’s Web site in newspaper and TV ads, and hoping fans would beat a path to the site’s door.
No such luck. Downloading trailers is no one’s idea of a killer app, and it’s practically the only thing on the studios’ menu.
Last week, Miramax announced that it would offer consumers a chance to download and own the 2-year-old romance “Guinevere,” which stiffed at the box office. For about $3, viewers can invest 30 minutes of DSL time and get a picture little bigger than the screen on a Palm V device.
Patrons of porn sites have been able to stream X-rated videos onto their computers for years as part of monthly subscription packages that cost only slightly more than the “Guinevere” download alone. In addition, on a daily basis, they can find pictures of their favorite models and dozens of newcomers; a full menu of fetish sites and chat rooms; online shopping; and even links to competing sites.
And, if a company manages to stay in business for longer than 10 minutes, it tends to turn a profit. Hollywood should be so lucky.
