Porn 500

0 Comments | Insight on the News, Jan 8, 2001 | by James Harder

Pornography has become one of the hottest growth industries in the nation. Corporate America has taken notice and is rushing in to make a profit on smut.

Fortune 500 companies are swooping down from their financial kingdoms to compete in the pornography industry for a market flush with profits, growth potential and increasing public tolerance.

Porn is being downloaded, ordered, rented and tuned in at startling rates across America. And, with millions of customers spending billions of dollars on pornography, corporate America is starting to compete for a piece of that pie. In 1999 pornography sales in the United States exceeded $10 billion -- a market so lucrative that even blue-chip companies such as General Motors Corp. (GM) and AT&T Corp. have jumped into the dirty game. These two Fortune 500 companies are piping pornography by cable and satellite feeds into American homes, providing distribution that porn producers require to increase their production of smut, perversion and filth.

Bryn Pryor, managing editor of Adult Video News Online (AVN), hails the entrance of corporate America as essential to the growth of pornography in the domestic market. "It's more distribution for the industry, so it's all to the good. It's more places for them [producers of pornography] to sell their product," Pryor tells Insight. He is optimistic about the growth of video production the added cable and satellite distribution will create.

With net sales and revenue of $177 billion in 1999, GM is the largest company in the world, operating in more than 55 countries. Through its ownership of Hughes Electronics and DirecTV, a satellite-TV company, it has a reach of 9 million homes throughout America, offering each family news, sports, movies -- and porn. Or, as DirecTV labels it on their Website, "provocative entertainment from the leaders in adult entertainment."

AT&T has annual revenues of more than $62 billion, operates in 59 countries and reaches 16 million customers in the United States with its AT&T Broadband cable service. In addition to offering a vast selection of traditional channels, it promotes a full array of adult erotica via AT&T Broadband.

While GM and AT&T are the biggest fish in the overflowing sewers of porn, they are not alone in their quest to cash in on the $56 billion up for grabs in the international porn industry. Hilton Hotels, Marriott International, EchoStar Communications Corp., On Command and LodgeNet Entertainment all have large financial stakes in the industry. While Hilton and Marriott hotels are reaping the profits from showing X-rated shows, On Command and LodgeNet provide the actual content. The No. 2 satellite company, EchoStar, also makes big money selling sexually explicit films.

With millions of shareholders concerned about profits, and the devil take the hindmost, managers and chief executive officers of these corporate giants are not excited to talk about their foray into pornography. Tom Marder, a spokesman for Marriott International, dodged questions, gave convoluted answers or simply didn't respond to questions put to him by Insight.

"You're asking me if nudity is involved? I'm not a critic so it's not like I can tell you piece by piece what's going on" Marder says of Marriott's in-room movie atles. Asked directly about pornography, Marder says Marriott offers "some material with more mature themes. Mature themes would involve material directed toward a more mature audience." Pressed, he admits that some of the content doesn't sit well with the conservative ownership of the hotel chain, adding, "It's a competitive business. A lot of what we provide is based on demand."

That alleged demand has created the space for Fortune 500 companies to slither into distribution of hard-core pornography.

Hotels were among the first publicly held companies to profit from porn, networking their rooms to provide a flow of X-rated movies. It's a route almost all now are taking -- except for Omni Hotels. Even with the lure of big profits, the privately held Omni decided to stop offering pornography from its entertainment system. "As a father of two sons, I was uncomfortable with the late-night entertainment available," says Omni's owner and chairman, Bob Rowling. "We didn't want to generate revenue on pornography."

As a result, Omni went to work several years ago to remove the adult channels and movies networked into its rooms. "It was actually more difficult than we anticipated. There was a lot of profit in those movies," Omni Vice President for Marketing Peter Strebel tells Insight. And the entertainment companies that provide the movie channels for hotels were not interested in offering a system for Omni that excluded porn, fearing a dip in profits. "After heavy negotiations we did find a company," says Strebel, striking a deal with LodgeNet, which agreed to exclude the adult channels they offer in other hotels. By shutting out the pornographic movies, the Omni chain of 80 hotels was able to add to its family movie offerings -- and has in fact experienced an increase in movie-rental profits.