Porn Valley- Mitch Spinelli, owner of Acid Rain Video, www.acidrainvideo.com, did this interview with Xbiz awhile back and made a comment to the effect that distributors were lazy.

“I hope it didn’t sound too harsh,” says Spinelli who sat down with me this morning and was just as frank talking about the state of the adult business and the long hot Summer. According to Spinelli, he started seeing the multi-billion dollar adult industry hitting the wall in April and never rebounding. But Spinelli, a long time survivor in the industry, had a Plan B.

Distributors, plans and everything else aside, Spinelli’s convinced that the Internet has leveled the playing field and is inclined to go along with much of what John T. Bone said in an article https://www.adultfyi.com/read.aspx?ID=20437 earlier in the week.

“The average webmaster doesn’t know who Evil Angel is,” Spinelli agrees “They don’t know who Zero Tolerance is. They may know who Vivid is because Vivid is branded. It’s pretty much cross-over. Plus there’s a lot of sites that do huge numbers that we’ve never heard of. Bang Bros., before they started selling DVDs, were huge but we didn’t know who they were. Now they’re crossed over and their DVDs are an after-thought, but they’re kicking ass. They were pretty much on the Internet before anyone ever heard of them.”

As many other companies are apparently doing, Spinelli’s well in agreement with the strategy of shooting movies and getting them on the Internet fo sale as quickly as possible. Spinelli points to a business article in the LA Times about how the mainstream is making downloads of TV shows available to the consumer. According to a bigwig with Microsoft, it’s going to be total digital distribution.

“It may not be now, maybe ten years from now,” Spinelli thinks. “That’s why the Internet to me is exciting. If you align yourself with somebody who knows traffic and has access to webmasters and websites and knows how to do paysites and feeds and plug-ins; and if your content is good, I think you’ll survive.”

In what Spinelli calls the politics of branding, he’ll tell you that his company is a strong second-tier one.

“I’ll never be a top tier guy,” Spinelli says honestly. “Distributors basically are not interested. They’re interested in Evil Angel which is a great company. Zero Tolerance is a great company. But if you take a movie Zero makes and take the brand off and put Dane on it, it could be Girlvana times 10, it’s not going to move what it moves. Period. That’s it.”

According to Spinelli, his shows cost him between 15 and 20 grand and he uses all the top girls.

“And I use Robby Fischer who started with Anabolic and Red Light. The guys who make those shows all use the same kind of people. In fact I’m talking to the photographer, Ryan, who shoots all of Dion’s stuff. We all use the same people but it’s the politics of branding. And distributors don’t want to push anything new, I think. They’re stuck.”

“Is there a chance for anyone new to break into the industry and make a huge impact?” I ask Spinelli.

“I think it’s over,” he says. “Listen, everyone’s new release numbers- pretty much- are down by 45%. I think if Zero was moving 5,000 pieces last year, I can’t see them moving more than 3,000 per release which is a home run for me.” Home runs get hit in the summer, but Spinelli thinks it was a terrible season.

“I was doing a strong 2,000 which for me is good,” he comments. “But April and May it just hit a wall and never recovered.”

“In April’s past you’d talk about it being tax season and attribute it to that,” I comment.

“But then it would go back up but it hasn’t gone back up,” Spinelli responds. “I’m supplementing that with Internet income which is what I invested in.”

Spinelli also has enough catalogue, now, where he doesn’t have to depend on new release revenue as much.

“Like what used to go out the door was your source of income,” he says. “Now out the door sales are what they are.”

“Internet sales are good for you?”

“They’re climbing,” Spinelli anwers. “Absolutely. They’re becoming 15 to 20% of what I do.” Spinelli’s now aligned with XXX Content, an Internet company out of Las Vegas.

“They do traffic, and it’s like I hired a sales guy with a big sales book,” he continues. “What you’ve got to do is get an Internet guy that drives traffic. That’s who I’m partners with- they’re affiliated with huge websites like Fetish Bucks and Platinum Bucks and things like that. They interchange affiliates. They drive traffic. So my company, Acid Rain, is exposed to thousands of websites. A level playing field.”

In that deal, Spinelli gets a 50% cut and in turn supplies content.

“And they do all the work,” he says. “By next year that will be a significant source of income where I won’t freak out because I’m moving 1200 pieces out the door. I wouldn’t even care. If you own your own content that’s a plus. And if you make the right moves, know what you’re doing and stay on top of the new technology and embrace it, I think you’ll survive.”

“You truly are one of the old guard in this business,” I tell Spinelli. “And you’re an old dog that had to learn a few new tricks. The prevailing feeling is that a lot of the older companies aren’t going with the times and getting their ducks in a row.”

“With Rain as opposed to Acid Rain I saw that my stuff was pretty much antiquated,” says Spinelli. “It was terrible. In the early Eighties all you needed was a good boxcover. You could have shit inside as long as you had a good cover. I think around 1995 my numbers for Rain started to really dip.” Spinelli subsequently took home lines, like Anabolic, to study why they were selling.

“I watched it- it was totally different,” he says. “My Rain stuff was master shot, close-up like the old stuff. Anabolic and Evil Angel was one shot that went on for minutes and you never saw the dudes and it was totally hardcore. I said I’ve got to do something else. So I started to hire guys that worked for other companies and took myself out of the equation. I took Spinelli right off the box because I thought that was a detriment, and Acid Rain has done pretty good.”

“So there was no ego involved in that decision?”

“I had to,” replies Spinelli. “My stuff looked totally dated. It was like watching an old Outer Limits episode compared to a Steven Spielberg movie. It was terrible. So I brought Acid Rain a long way. I got good foreign deals with a company called Magma. It’s a damn good deal. They take each one of my shows for all of Europe and that helps a great deal, too. It’s funny. When I had Acid Rain I thought I’d kick ass in this country and I thought foreign would be a hardship. It’s totally the other way around.”

Spinelli jokes about taking a 100 by 100 booth in January.

“I’m downsizing,” he says soberly. “I’m sharing a booth. I think we have to downscale. It’s not feasible to spend. Last year I spent $60,000 on a booth. I took an eight page foldout in AVN. I spent about $100,000 last year. I had three girls at the booth. I spent a lot of dough, but I can’t do it this year. Last year things were really good, but April it just hit the wall. We’ve always been talking that there’s too much product. I think it finally happened where the water hit the dam and the dam broke.”