Porn Panic!

It's a rainy Monday and I am crouched in the corner of Jet Set Men's modest one-room studio in North Hollywood, Calif. I'm careful not to make a sound because Kyle, one of the two models in this scene, has been trying, and failing, to climax for 20 minutes. Kyle stares at a portable DVD player -- concealed offstage -- for inspiration.

The camera is on standby. Kyle's costar, Tyler Saint, gently caresses Kyle's forehead and whispers inaudible words of encouragement -- in stark contrast to the last 45 minutes, during which Tyler's demeanor was more maniacally commanding.

"How about a different lube?" suggests director John Tegan. Kyle politely refuses. Tegan leans over to me and whispers, "Once I had a guy take four hours." I sink back into the couch, thinking that if we're going to be here for another three hours, I may need a sandwich.

Kyle motions that he is nearly ready to resume filming, reassuming his previous position on a stack of tires. Tyler seamlessly slips back into character as the angry rapist, and Tegan calls out "action." Moments later the scene has wrapped. I'm more relieved than Kyle.

I compliment Ross Cannon, the cameraman, on expertly maneuvering the high-definition camera in one hand while operating a plastic dome light in the other. He smiles proudly. "Oh, that's the C light. Without it, you miss all the good stuff. It's normally much bigger and heavier, but you need to hire another guy to work it. I found this one at a church bazaar -- works great."

Chris Steele, head of production for Jet Set Men, explains, "We've had to adapt in order to continue shooting high production value on a budget that can still turn a profit. Everybody on the crew has learned to adjust. If we don't, we're sure to go broke."

Steele and his Jet Set Men aren't alone. There are very few businesses in the world that aren't performing somersaults in an effort to survive today's economic tumult. But Jet Set and others in the adult industry are facing a double whammy: the worst recession in decades coupled with nothing less than a tectonic shift in the way people are consuming their products. Much as Napster did to the record industry 10 years ago, websites like XTube are shaking traditional porn businesses to their core. And now an industry that is perhaps best known for going for broke could go, well, broke.

In January, Larry Flynt asked Congress for a $5 billion bailout to help "rejuvenate the sexual appetite of America." But it's unrealistic to expect that the government will rush to save porn companies in the same way it's done for the auto and financial industries -- after all, pornography is something that is seldom spoken of in polite society, something that's hidden in a closet or under the bed. But it's equally unrealistic to expect that the failure of the gay porn industry -- a business model that has employed so many, entertained so many more, and donated millions of dollars to gay rights and HIV organizations -- won't change life as we know it.

Recession-Proof?If there's one thing that's always comforted people in the porn biz, it's that, good times or bad, sin sells. Americans, they say, have traditionally been more willing to cut back their spending on just about anything -- other than cigarettes, alcohol, and pornography. Phil Harvey, the 71-year-old cofounder of Adam & Eve, one the largest erotica retail companies in the world, dusted off this conventional wisdom recently in an address to the annual XBiz State of the Industry Conference in Woodland Hills, Calif. "As far as I can tell," he said, "over a period of some 35 years, we're recession-proof.... Our sales, while not booming, don't appear to have been impacted by the downturn in the economy at all."

But Harvey's words did little to calm the nerves of some of the giants in the gay porn industry. "The recession is very noticeable and is cutting into sales," says Chi Chi LaRue, drag queen, porn director, and owner of Channel 1 Releasing. "Anybody who says it's not is either not telling the truth or is not smart enough to see it." Adds Michael Lucas, director, performer, and CEO of Lucas Entertainment: "I don't know what Mr. Harvey is smoking. People in the adult world often like to flex their muscles and speak with wishful thinking, even when it's absolutely ridiculous."

Depending on whom you talk to, DVD sales are down by between 25% and 45%. Model fees have been cut by about 20%. Several webmasters report that February was the worst month for new memberships -- ever. And the credit crunch has made it more difficult than ever to retain those Web-based customers. "Declined credit cards on recurring billings have increased from one or two per week to seven to 10 per day," says Alex Sulaco, owner of ManifestMen.com. Ten declined cards a day at a $30 membership level comes out to nearly $10,000 a month in losses.

Midsize studio PZP Productions announced in February that it was suspending production for the rest of the year. "The recession is strangling us," explains owner Peter Z. Pan. "A lot of little companies are going out of business. I'm just barely hanging on. If I don't produce any new content [now], and if the economy begins to turn around in a few months, I think I can survive. And that's because I have very little overhead. Other small companies will just disappear."

A Saturated MarketOver the last decade, the gay porn market has been inundated with massive amounts of new product. Self-proclaimed producers from all walks flocked to adult entertainment, operating under the correct assumption that sex sells and the sort-of-correct assumption that there's an endless supply of customers. "What most failed to consider is that there is also an endless supply of content," says veteran porn analyst Tom Hymes.

"I got into the industry at a really amazing time," says porn commentator and online talk-show host Jason Sechrest. "It was 1998, Jenna Jameson was just becoming a household name, and the adult entertainment industry was on the cover of Time and Newsweek. We started telling CNN that we were a multimillion-dollar industry! We may as well have just taken a gun and put it to our head. Everyone with a camcorder picked it up and said, 'Hey! I'm going to do that!' "

The gay porn world comprises an ever-growing field of players. There are traditional companies (Falcon Studios, Titan Media, Channel 1 Releasing, Jet Set Men, Lucas Entertainment, Raging Stallion Studios, Hot House Entertainment); Web-based video-on-demand sites (SeanCody.com, RandyBlue.com, CorbinFisher.com, CockyBoys.com, StraightBoysFucking.com); DIY-porn "tube" sites (XTube.com, GayTube.com, YouPorn.com, RedTube.com); BitTorrent and peer-to-peer file-sharing networks (ThePirateBay.org); online distribution and pay-per-view sites (AEBN.net); fetish sites (BoundGods.com); live webcam sites (Flirt4Free.com, Cam4.com); reality sites (Fratpad.com); porn star sites (BrentCorriganInc.com); porn star fan sites (KruezerAtNight.com); hookup sites (Manhunt.net); and there are still one or two mom-and-pop video stores down the street. For the time being, at least.

For every name above, there are hundreds of similar companies and websites. The straight-guys-having-gay-sex-for-money genre, one of the most profitable, is also the most saturated. "Google-search 'straight men gay porn' and you're sure to get thousands of hits," says Jet Set Men's Steele. "Sean Cody has a business model that works -- he got in it early, made a name for himself, and has the momentum. But for every one Sean Cody, there are maybe 5,000 sites that will fail."

Raging Stallion Studios/Pistol Media merged with AEBN/NakedSword in February to create one of the largest gay adult entertainment companies in the world. Steve Johnson, CEO of Falcon Entertainment, says this is just the beginning of a much-needed consolidation in the industry. "There's a lot of redundancy and competitiveness," he says. "We're all creating accounting systems and distribution systems and making websites and having warehouses and maintaining studios and factories, and we all walk around being paranoid of each other when we ought to be embracing each other."

Giving It AwayI recently asked a group of college students how they felt about pornography, and they unanimously agreed that porn is terrific -- and that it is and should be free. In a Wall Street Journal article titled "The Economics of Giving It Away," Chris Anderson noted that members of the Google generation are "saving their money and playing free online games, listening to free music on Pandora, canceling basic cable and watching free video on Hulu, and killing their landlines in favor of Skype. It's a consumer's paradise: The Web has become the biggest store in history and everything is 100% off."

That's where tube sites come in. Essentially YouTube for porn, tube sites are largely composed of user-generated content provided to other users for free. Whereas traditional porn studios' revenue comes from the sale of DVDs, and websites make money from monthly memberships, tube sites sell ad space and make revenue by generating as much traffic as possible. "Picture a bug zapper you put in your backyard," Steele says. "Bugs from all over the neighborhood fly in. That's all a tube site is, a bug zapper."

Lights attract bugs; free porn attracts people -- lots and lots and lots of people. Roughly 15% of the 100 most-visited websites offer free porn. XTube, which features approximately 75% gay content, receives more than 5 million hits a day and has 7 million members -- up from 4 million a year ago. "We changed the whole adult industry," says XTube operations director Kurtis Potec. "We took what was an analog world based around a physical product and changed it to a digital world. We understand a lot of people wouldn't be happy with that."

Cash-strapped consumers, however, are very happy with the site. Dean Berkeley, who sells online porn memberships for a living, says bluntly, "I don't have any friends who would subscribe to a porn site now. Not one. They all say, 'Why would I buy porn when I have XTube?' "

Still, major studios insist that high quality will always ensure a loyal consumer base, regardless of free alternatives. Titan founder Bruce Cam, who classifies XTube's content as "faceless jerk-offs and mystery holes," says, "The problem is not tube sites. The problem is when someone steals our copyrighted content and posts it on a tube site. Then, all of a sudden, we're competing against our own stuff." That's when a tube site becomes an illegal tube site.

Stealing It Away -- Illegal Tube SitesIt's 1:30 p.m. at the State of the Industry Conference in Woodland Hills, and straight-porn producer Jay Quinlan has just been asked about illegal tube sites. He slams back what's left of his third Miller Lite, leans into the microphone, and points to no one in particular. "I have one video that showed up on Pornhub, went to number 1 [on the site], got 250,000 views, and here's the kicker -- the video hadn't even appeared on my own site yet! That's thievery! How do you sell something that's been watched a quarter of a million times? The people who own [the illegal tube sites] are thieves, liars, and scumbags. They should be brought out to the backroom and shot!"

Some of the larger tube sites, like XTube, are vigilant in their prohibition of pirated material. But because these sites' revenue comes from generating traffic, many tacitly permit users to upload copyrighted content. When contacted by angry porn producers, the response from illegal tube site owners is very similar to what I heard from LifeOut.com's Jason Ward when I asked if he was responsible for the conduct of his site's visitors: "We cannot stop members from uploading copyrighted content. What do you mean by 'conduct'? Does that mean sites should approve every message that is sent through their mail? Does that mean every photo uploaded to a site should be reviewed? If that's the case, then every site from MySpace to Facebook to Gay.com would be spending incredible resources to ensure everything is completely compliant." Instead, it's the larger porn studios that are spending those incredible resources -- to ensure pirate sites are sued. "We have a full in-house legal team, and basically all they do is piracy work," Titan's Keith Webb says. "We've won over 30 cases and settled over 100 more out of court in our favor."

In November 2008, New York-based gay porn studio Pitbull Productions was awarded damages in excess of $2.85 million when it sued WhatsTea.com, a video-on-demand website, for copyright infringement. "At the end of the day, your library, your intellectual property, your copyrights and trademarks -- that's your business asset," says Pitbull's CEO Jalin Fuentes.

For the most part, though, the mice are eluding the cat. Even if the majority of porn companies could afford drawn-out legal battles (they can't), finding a person -- or an entity -- to sue is often impossible since most tube sites are based outside of the United States. Many producers are resigned to the reality that all porn will be stolen eventually and are making the best of a bad situation. "All of our content is watermarked with our name and website," says Lea Busick, director of sales and marketing for TopBucks, which operates MaleSpectrum.com. "So when [a clip] does end up on a tube site we still get the exposure for the brand. You can bitch and moan about [piracy] or you can work within it and play the game."

Competing With the Homemade Porn Star"I can't believe The Advocate is calling me," says 25-year-old Mike Rizzo of Belmar, N.J., who is also known as "oboymikee." "Everybody wants to be famous somehow, I guess."

Online, Rizzo is best known for his XTube videos (there were 11 of them at press time), which have been viewed more than 3 million times. The videos, most of which feature Rizzo by himself, are simple in content and far from professional in production value. But they're not horrible. The scenes are well edited, generally shot with two cameras, and include foot-tapping music.

"There's no money in it. I shoot them all at my house. It's an ego boost," Rizzo says. "I put a new video up a few weeks ago and it already has 700,000 hits. The other day someone at the grocery store recognized me from XTube. I'm a plumber. I'm not going to get famous being a plumber."

Ten years ago, "amateur" was just a tab in online thumbnail photo galleries. Today, it's one of the most commonly used keywords when searching for porn. "People like amateur work because it seems so close to you," says "LordBenthefirst," a college student who shoots XTube videos between classes. "It feels like you could have sex with this person if they lived in your town."

The rise of amateur porn began about nine years ago when sites like SeanCody.com, RandyBlue.com, and CorbinFisher.com began filming young, nervous, and generally straight men having sex with each other. These companies are now some of the most lucrative in the business and offer top dollar for the right model. But the success of the genre these sites created could destroy them in the end. "I think [sites like SeanCody.com] are really getting hurt by all of the real, free amateur stuff on XTube," says Titan Media's Webb. "If you're just looking for a hot guy who is jerking off on the couch, why pay for it when you can get it for free?"

And now amateur content is being offered in real time, for free. I signed on to the live webcam site Cam4.com and moments later was watching, along with 2,000 others, two relatively attractive young men having sex. I could even offer the men suggestions and critiques using a chat room on the site. Skeptical and pretty certain I was watching a prerecorded scene, I typed, "Hey, can you move that pillow?" Seconds later, it was hurled across the room, out of the frame. Everyone's a director, I suppose.

Many people in the business believe that the popularity of amateur videos will bring about the demise of the traditional porn star. "Models were asking for and getting $3,000 to $4,000 per scene one year ago. Now they have to really negotiate to get $2,000," says gay-porn reporter Damon Kruezer, publisher of KruezerAtNight.com. "Well-known twink performer Aaron Tyler was doing video work full-time nine months ago, but now he's an office temp. And Brodie Sinclair, who is a CockyBoys exclusive model, says he has to work part-time at a burger joint and part-time as a personal trainer in Miami to pay the bills. Both men are escorting as well."

"When amateurism is celebrated and anyone with an opinion can publish a blog, post a video on YouTube, or change an entry on Wikipedia, the distinction between expert and amateur becomes dangerously blurred," writes Andrew Keen in his book The Cult of the Amateur. According to Keen, the Web 2.0 phenomenon is not just strangling the economy but killing culture. "We are facing the law of digital Darwinism, the survival of the loudest and most opinionated," he says.

But is pornography an art form or simply a masturbation tool? Should we really worry if the beloved skin flick is being sullied by the ever-growing attraction to the gratis, do-it-yourself variety?

"In the early days of the industry, porn filmmakers came out of film schools. They were trained in Hollywood and brought a level of professionalism," says J.C. Adams, editor of the industry news site the Gay Porn Times. "The rapid growth of the amateur has pushed out the actual filmmakers. Now, with the economic condition it's harder for these guys to make the kind of films they want to make since everything is reduced to a seven-minute scene on XTube. There aren't too many of them left."

That's music to the ears of plumbers like Rizzo. "I think it's about time," he says. "We could never compete with [porn studios] because they have all the money. I'm doing this out of my paycheck. I'm glad we're giving them a run for their money, because I love doing it."

A Hard-core Industry Forced to Get HarderAs consumers turn away from traditional porn, professional content producers are increasingly catering to niche audiences with edgier, kinkier product. Michael Lucas, whose recently released titles include Piss! and Farts! says, "There are literally hundreds of thousands of vanilla gay movies that have been produced over the past 40 years. People are definitely getting bored with the same action."

The demand for hard-core content has widespread effects, many of them negative. Studios have a hard time competing with the raunchiest amateurs because many of their billing providers, like CCBill and Visa, prohibit certain content. "I don't know how Michael Lucas is getting away with [water sports]," says Bill Gardner, cofounder of Hot Desert Knights. "If Visa finds out, they'll shut his site down in a heartbeat."

The demand for extreme fetish also has caused models to have to choose between participating in undesirable sexual scenarios or going without work altogether. Nowhere is this more evident -- and more controversial -- than in the world of bareback porn.

"Bareback? I don't even consider that a fetish anymore, it's become so big," says the owner of one Los Angeles gay video rental store.

Many in the industry, like Chi Chi LaRue, believe they have a moral obligation to produce videos that depict only safe sex. But others say there are economic drawbacks to featuring only safe-sex scenes. "As a small company, I am forced by distributors to shoot bareback content," says Tyler Reed, who owns the one-man operation USA Jock Studio. "Unless you have extremely high-quality models, sets, and so forth, distributors won't even touch the safe content anymore."

But haven't the majority of studios publicly stated that they shoot only safe-sex porn? Tyler sighs. "Don't think for a second that these huge companies promoting safe product lines don't also have their hands in the bareback action somewhere -- a hidden wing of a conglomerate or some bareback website," he says. "Bareback sells two-to-one, guaranteed. And if you put the word 'bareback' in the title, you're looking at three-to-one."

The Murky Crystal BallI concluded each interview by asking people to predict what the gay porn industry would look like in three years. After a deep, collective sigh, most everyone agreed on two things: First, the convergence of Internet and television will effectively kill the DVD. Second, the marketplace will be much, much smaller. "In 1930 there were over 200 American car companies," says Jesse Kiehl, CEO of Fierce Dog Media. "Now there are barely three. Expect a similar thing to happen to porn."

Many in the industry believe that new technologies will shape the orgasmic wave of the future, and their companies are racing to provide mobile content so people can take their porn on the road. To compete with the reality of amateurs, more and more porn stars are following the lead of Brent Corrigan and Michael Lucas by offering fans minute-by-minute updates about every (excruciating) detail of their private lives. "Look at Paris Hilton," Lucas says. "She's an open book. People have seen everything from her vagina to her dumb-ass behavior, and I don't see any other reason why she's become so famous."

Diane Duke, executive director of the Free Speech Coalition, which lobbies for the adult entertainment business, insists that cooperation from lawmakers is essential. "In California, the legislature just approved a budget that provides a tax credit to mainstream Hollywood because of difficulties it's having with everything from the economy to piracy. Our industry is suffering from the exact same issues, and yet the legislature is constantly trying to impose additional burdens on our industry. It's going to be up to your readers who are consumers of adult entertainment to speak up."

And while it's perhaps unrealistic to expect anyone to come rushing to the aid of the adult entertainment industry, these companies' failure will likely affect more than just your libido. Gay porn studios have been very generous in their support of LGBT and HIV service organizations. Last year Titan Media alone donated more than $100,000 to such groups, and though many companies are reticent to discuss specific figures regarding charitable donations, Titan is not alone in its support of gay organizations. And of course, porn has a specific place in our collective development. "[Gay pornography] is a huge part of our culture," J.C. Adams says. "For many of us, porn was our first exposure to male intimacy and porn stars were the only openly gay or bi men that we saw or heard of."

But for the gays of the Google generation -- some of whom brought their boyfriends to the prom -- pornography serves a singular purpose, and in so doing, neither evokes nostalgia nor warrants respect. As the next crop of teenagers becomes old enough to buy porn, it seems less and less likely that they will be interested in doing so.