Porn Valley- It’s Memorial Day weekend and The Grand Vizier calls me from the local bar where he’s drowning his sorrows. The Grand Vizier comments on a recent chat I had with Skeeter Kerkove about the state of the industry www.adultfyi.com/read.php?ID=22792.

He agrees that it’s in a fine kettle of fish.

“Okay,” says the GV. “For starters, you shoot a movie for $15,000. You sell 1,000 pieces at $10. You’re losing $5,000 a movie. Yeah, I want to jump into this business. Where do I sign up?

“And from what I understand,” the GV continues, “the European market is down 50%. How could that be? Well, figure that the Cabelleros and Leisuretimes spun a piss load of DVDs and opened up foreign distribution over there. They sent container-loads of porn selling it cheaply.

“Let’s say Marc Dorcel’s got a big movie out- cause obviously over there you can shove cucumbers up the ass, set the girls on fire, eat shit between white bread, there’s no rules. But why spend $30, $60 on porn like they used to in Europe when you’ve got Caballero giving it to me for $2 bucks? The European market is completely insane. Devalued. I think they even cancelled the Hot D’Or awards. I guess they just had it with the politics.

“The market’s oversaturated,” the GV contends. “That’s why it’s puzzling when I see people like Mr. Marcus and Naudia Thorn starting up companies. Same buyers. Same niche market. But even if you’ve got a product, like Hustler’s which people have to take, now you’ve got to extract the money. I’m hearing it’s just a bear to get paid by people.

“People are driving Mercedes Benz’s talking the talk, walking the walk, hey I’ll come by and pick up a check for $200. Whooa. Can I pay this off over 90 days? And didn’t you just tell me you bought a private jet and the Hope Diamond for $8M? It’s goofy nonsense. You don’t know who to believe. Don’t get it.”

“The average is 500 pieces out the door,” says the GV. “People that have a moderately decent line, those are between 800 pieces and 1200 pieces. But the average is 500-600. Some people are down to 300 pieces.”

“And you know someone new coming in is going to dilute those numbers even more,” says I.

“But say Marcus comes in with a great line,” furthers the GV, “they’re just so oversaturated now and a lot of distributors aren’t taking on new lines. The Koretskys and certain distributors, like GVA San Francisco, have said no more new lines. Mr. Marcus? Just don’t care. If you’re a distributor what do you do? Just take 100 pieces from everybody? It’s an overkill.

“Even the Koretskys are notorious for taking 100 to 500 pieces and then returning half of it. It’s all well and good but it’s going to be 120 days or more- they will pay- but in the interim you’ve got your monthly nut as little as some of those nuts are, now.

“There’s just so much product coming out, how can they devote the time to have their sales crews blew this or that line out this week?

“Movie Gallery just took over the Hollywood Video chain and flew in certain distributors for a week of meetings at their home offices. They have 500 or 600 stores that carry adult. They basically said they’re only buying from 17 distributors and that’s it. They flew them out, had meetings with them and said that’s it. Thyey’re inundated. They’re not taking anyone new. They picked the 17. Hey, I’m Mr. Marcus. Don’t care. Hey, I’m Nautica Thorn. Don’t care. We’re buying from these 17 people. Have to, we’re going crazy.”

“I used to sell- I don’t any longer, but it’s just brutal,” continues the GV. “It’s absolutely brutal. And Rob Black selling his own product? You could see that one coming. Forgetting that Rob has product with people drinking out of toilet bowls, he’s going to have the same problem. There’s a lot of companies crying the blues. But touting the DVD has become tough and the returns are going to start coming in over the next 90 days because it’s summer. Wild.

“And when you’ve got product out there for distribution, you’re now at the mercy of other people’s accounting. Okay, you say Hustler is doing my distribution. Yeah, Hustler, the same people that bought Russ Hampshire’s company that once they got it said, we disagree and filed a lawsuit and got the price lowered. Just because it’s Hustler doesn’t mean it’s a fantastic deal. It means they’re unassailable. How do you argue with them? Are you going to get your own little attorney against Flynt and his battery of attorneys? And you’re going to fight his accounting? And Larry can collect any better from the General Video franchises and the Koretskys?

“I don’t know. It’s become a tough market. I was actually surprised that the numbers had fallen and that there’s big problems in foreign now. They want to sell you their own movies and I want to sell them mine. No one’s budging. Foreign has just become an extremely challenging market.

“The word on the street is bankruptcies and consolidations,” he adds. “That way you can condense warehouse people, phone girls and bookkeepers. But I don’t know who gets along that well in the business to merge without killing each other.

“And I know a lot of people have stopped advertising, and with those that do, you have to chase the money. And certain companies were notorious for trading product to pay off their ad bills.

“The fallout will continue and a web presence is imperative now,” the GV seems to think. “VOD will happen more and more. And there’s a couple of adult sites out there that are saying take the downloads for free. Take the 30-minute clip, take the 10-minute clip, just take it. The reason is so obvious, it’ll bite you in the ass.

“But when you download, it loads other shit to your hard drive. Spyware, this ware, that ware. I’m not saying these sites load spyware but even if it’s innocuous spyware, they’ll load you down with pop ups. Basically you’ll have to ferret through all the advertising. They’ve given you the scene for free- but what if the first 60 seconds is all advertising and there was no way around it? You can watch the scene as much as you want until the end of time but you have to see the ad. They’re making their money off of the ads.

“If you get 100,000 downloads on your site, they know people will have to suffer through those ads and eventually the douchebags will buy the dildo or whatever.

“And some of the DVDs coming out with the phone sex ads, are being sold as comps directly to the customer for $2, but there’s no way to fast forward through the phone sex ads. Sometimes there’ll be like 20 scenes and ads between each scene- and you have to suffer every time through the ads. You can have the scene. But is it free? When something’s free, there’s a catch.

“And college kids will suffer through the ads but will figure a way to get around them eventually and edit it out with editing software. Kids are very savvy. But that’s how money is made- on the ads.”

The Grand Vizier also seems to think that the days of the rube investor are over- the guys who used to come in with wads of cash, a dumb look on their face and a serious desire to party with porn chicks.

“People are catching on- that you’re not going to make a big killing any more.”

Another telling point about the state of the industry, according to the GV, is the fact that no one’s posturing and blowing it out their ass as far as their numbers.

“Everyone’s talking the truth recently,” he says. “In the old days you couldn’t get the truth out of these bastards. Nowadays people are going, I did 400 pieces. They’re telling you the truth. They’re saying it because they need therapy. They need someone to cry on. I know. Those are the numbers.”