Will Porn Become a Mainstream Business?
Special to CNBC.com
Not too long ago, the average consumer would blush when talking about Larry Flynt's business. Today, they very well may be promoting his company on their shirt.
As the porn film business continues to see revenues decline – a victim of both piracy and the copious amounts of free content on the Internet – more and more adult companies have begun expanding into new fields of business. And business has been good.
Hustler leads the charge in this area, having spent years building up a successful clothing line, opening casinos and even publishing the occasional mainstream magazine (including the video game-centric Tips &Tricks Codebook).
"July will be our 39th year," said Michael Klein, President of LFP, Inc. (the holding company for all Hustler brands). "It's an iconic brand and people know the name through Larry. So we decided to expand the brand reach. … It just makes sense to expand it to other areas you can monetize. Launching an apparel line was one of them."
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That apparel line has become a pop culture hit. Even celebrities are regularly photographed in Hustler shirts. And it's a hot selle rat Spencer's stores around the country.
"It's recognizable and not something people have to shy away from," said Klein. "It has re-energized the company. We're still growing and continue to be profitable."
Even sex toys have gone mainstream – but realizing that many consumers are still uncomfortable buying one, several adult novelty companies have branched out from motorized pleasure products to romantic aids that emphasize romance over sex.
Lelo, a maker of high-end sex toys, began this sort of pivot two years ago, with the introduction of a $30 candle, which melts into a massage oil. For $10 more, the company sells a more traditional massage oil, which includes 24K gold flakes.
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When they were first introduced, magazines refused to run ads for them, due to Lelo's main product line. Today, they're sold at stores like Brookstone and Drugstore.com. (Other high-end adult novelty companies, like Jimmy Jane, also offer candles and massage oils.)
Not all porn companies are limiting their expansion into areas that retain ties with sex, though. Pink Visual, one of porn's more technology-focused companies, produces an anti-piracy product that companies in the music, publishing and software industries have adopted.
Though only available for six months, the product has been adopted by 15 clients, said company president Allison Vivas.
"You can debate which industry is most affected by piracy," she said. "It might be a toss-up between adult and music. I know for us, adult is higher. For example, if you do a search for a non-piracy word like 'porn,' it's basically all piracy sites that show up. That doesn't happen if you search for music or an artist's name. … We understood a lot from the side of the copyright holder how important it was to customize [anti-piracy tools] and make them cost effective. A lot of the anti-piracy firms are very expensive - and people who want to be active in anti-piracy are being impacted because they can't afford [those firms]."
While diversification has largely been good for the companies that have tried it, not every porn company is ready to make the jump. Wicked Pictures, for instance, has stayed fairly close to its roots throughout its 20-year history – only adding a product line last year (a line of lubricants, massage oils and related products).
Founder Steve Orenstein said that while he would love to have a Wicked-branded clothing line, the effort involved to run that business might be more than the company could handle.
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"Marketing a clothing brand is a whole other animal," he said.
Wicked actually was approached several years ago about launching a clothing line. And while Orenstein said he carefully considered it, he rejected the idea for a simple reason.
"My daughter just turned 21," he says. "When I first started looking at [clothing lines], she was 12 at that time. They said 'the best opportunity is to sell these at the Hot Topic stores and to the 14-15 year-old world.' And I said 'I don't feel comfortable selling my product to 14-15 year old girls.' They said it's just a shirt, but I said I still have a hard time getting over that."