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This was funny, if the numbers are correct it's also amazing.

Paul.


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   Wednesday, September 1, 1999 L.A. Economy's Dirty Secret: Porn Is
Thriving
By JEFFREY GETTLEMAN, Times Staff Writer


While Hollywood is fretting about a downturn in production and the flight of
jobs to cheaper markets such as Canada and Australia, a certain niche of the
entertainment world is quietly flourishing: porn.
     This summer, grips, gaffers and best boys of mainstream movie-making
are marching down Hollywood Boulevard in an effort to save their jobs. But
in the San Fernando Valley, where the bulk of the world's adult films are
made, stagehands willing to stretch a boom over a couple in bed have zero
problem finding work.
     It's not an industry that civic leaders embrace, and many people find
pornography morally offensive. But the Valley's adult film business plays an
increasingly large role in the region's economy and is having its most
prosperous year ever, indicators show.
     While feature-film shooting in Los Angeles County has decreased 13%
this year, adult movie production is up 25% and rising, according to the Los
Angeles County Economic Development Corp.
     In July, one out of five shoots was a porn film, even though these
productions cost just a fraction of a Hollywood release, according to the
Entertainment Industry Development Corp., which oversees the granting of
film permits in the area.
     And though major studios are trimming the number of features they
produce annually, adult video producers are stepping up production. This
year, the industry is on track to release 10,000 new titles, according to
trade publication Adult Video News, up from 8,950 last year--an X-rated
milestone that probably won't make it into the mainstream trade magazines.
     Powered by the explosive growth of the Internet and shifting social
mores, the Valley's $4-billion porn industry has proved seemingly impervious
to the bean-counting, cost-cutting culture seeping into Hollywood.
     "You may not approve of the product, but the adult film industry is an
amazingly large business," said Jack Kyser, chief economist of the Economic
Development Corp. "Given the distress in the entertainment industry, the
success of the adult segment is a welcome anchor in the wind."
     And it doesn't look like this anchor will be dropped anywhere else. One
of the biggest stories in Hollywood this summer has been runaway production.
A growing number of mainstream producers are shooting in other countries
because of foreign tax rebates and cheaper labor costs. Last year, between
$573 million (the Canadian estimate) and $2.8 billion (the U.S. estimate) of
filming skipped off to Canada.
     But for porn, there's really nowhere to run.
     Canada's film and television tax credit regulation specifically bars
government subsidies for skinflicks, as well as for award shows and reality
TV programs such as "Cops."
     "Pornography is not in keeping with the community standards and social
mores of Canada," said Rob Egan, president of British Columbia Film, a
quasi-government agency.


     Porn Expands Into Internet Market
     Twenty years ago, sex movies were found only in seedy movie theaters.
Today, porn is sold on the shelves of Tower Records and Fry's Electronics.
X-rated material is among the fastest-growing areas on the Internet, with $1
billion in sales, according to Forrester Research Inc., a Cambridge,
Mass.-based Internet tracking company.
     Soon, porn producers say, people will be able to download any adult
film ever made via the Internet or video-on-demand services provided by
cable TV companies.
     Porn, it seems, is poised to keep expanding.
     "I don't see how this business can be cyclical with demand growing the
way it is," said Ken August, an entertainment consultant with Deloitte &
Touche.
     The insatiable demand for new titles is driven by men, who watch the
movies to see their favorite female stars, which explains why women make
much more than men in this business. An evolving trend among top producers
is more couple-friendly porn, graced with plot, shot on 16mm film and often
costing more than $200,000 to make.


     Porn Titles
     Number of adult video titles released, in thousands:
     1999 projection: 10,000
     Source: Adult Video News
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