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Adult films bet on TV, 'virtual porn' for growth

The porn industry, after years of challenges from free online content, legally obtained or not, may finally be on a path to growing again this year.

While piracy is still a problem, some adult entertainment studios say they're seeing a bit of a turnaround. And new technologies are giving other content providers reason for cautious optimism.

At the same time, though, one of porn's most public figures in the battle against mandatory condom legislation is stepping down. And the fallout of a few very public battles has yet to settle.

Performers, directors and executives will begin addressing this at the Adult Entertainment Expo, which begins Wednesday in Las Vegas. One of the biggest public gatherings of the industry, the show is a place that quietly focuses on business education, while fans line up for the chance to meet their favorite stars.

"Less than 5 percent of our business comes from DVD sales. That business is pretty much over." -Steven Hirsch, owner, Vivid

Piracy, as always, will be a topic of discussion, but at least one major studio says it has found a way to work around the problem. Vivid increased its headcount by 30 percent in 2015, as it switched its primary focus to its television business, providing on-demand programming to cable and satellite providers.

"It's been quite a busy year," said Steven Hirsch, owner of Vivid, one of the biggest studios in adult entertainment. "We're in 80 million homes domestically and expanding globally. Our business, in general, is up and television is certainly a part of that.

"Less than 5 percent of our business comes from DVD sales. That business is pretty much over. The Internet business has been stable, but I don't see a lot of growth there."

Hirsch said he actually expects the industry to increase the number of films it makes in 2016 following reduced production in the past few years. He said Vivid will initially produce video for television, then later release that online or on DVD.

Television's a hard field to break into, though, which is why some porn insiders believe virtual reality could be the next big thing for the industry.

Read MoreVirtual reality for gaming ... and beyond?

Some adult companies that stream videos online, such as Naughty America, already offer VR porn films to users, which can be viewed on either Samsung's Rift VR (though that takes a bit of an end run on the system) or Google Cardboard. And more are coming soon.

"The one ray of hope is the emergence of VR," said Alec Helmy, founder and publisher of industry trade Xbiz. "Quite a few people are hopeful that this will be the next big wave for the business [since] Blu-Ray and other things that have come about have had hardly any impact."

Source: Rising Star PR

New technologies are less likely to have the biggest impact on adult entertainment companies, though. Ultimately, it's the ongoing fight against mandatory condom use in films that could make a difference.

It's not a new battle, but the decision by Diane Duke to step down as president of the Free Speech Coalition — about as close as the porn world comes to having a lobbying group — could shake things up.

This November, California voters will vote on a ballot measure requiring performers in adult films to wear condoms and use other safety precautions, including gloves, dental dams and other skin protections to avoid contact with bodily fluids. Violators would face fines of $70,000 and more.

Read MoreSex workers: VR porn isn't real

The proposal, which has been championed by the AIDS Healthcare Federation, is a statewide effort, following up on the passage of a similar ordinance in Los Angeles County in 2012. That regulation is tied up in legal proceedings and is not currently fully enforced. The statewide proposal follows the 2014 defeat of a similar measure in the California legislature.

Duke and the FSC have consistently argued there has not been an on-set transmission of HIV since 2004 — and note the passage of the proposal could drive the industry underground or to another state.

Duke has been a controversial figure within the industry. Some love her and the coalition. Some hate her. But she has been the clear field general in the industry's fight against state regulation.

"As a result of her departure, we're more naked than we've ever been," Helmy said.

And some industry observers say her departure could leave porn companies vulnerable.

"The same people in the FSC have been fighting for years — and the community thinks, 'Oh, they've managed to hold it off [several] times before, so we're going to stop paying attention to it,'" said Chauntelle Tibbals, a former visiting scholar at the University of Southern California and author of "Exposure: A Sociologist Explores Sex, Society and Adult Entertainment."

"I think that's the wrong approach. I'm very concerned with Diane Duke stepping down. She's a very controversial figure in the industry for a number of reasons, but she's a leader and she has managed to keep all of that together and be a front facing person."

There is also hope, say industry insiders, that recent accusations of poor on-set behavior by some high-profile performers and the talk surrounding them will result in improved communication on set.

"Everything blows over eventually, but I think these stories put our industry in a negative light," Helmy said. "They paint our industry as one that doesn't have the necessary measures in place to prevent such things from happening. The industry has come a long way in adopting best practices — whether it's STD testing or onset practices — but I personally feel we have some ways to go."

CORRECTION: An earlier version gave the wrong spelling of Steven Hirsch's last name and the wrong first name for Alec Helmy.