|US: Once-Conservative Cable Company Profits off Porn |
February 2nd, 2005
Adelphia Communications Corp. has quietly become the nation's only leading cable operator to offer the most explicit category of hard-core porn. Come Friday, triple-X-rated programming will be available on cable for the first time in a major media market: Southern California. "People want it, so we are trying to provide it," Adelphia spokeswoman Erica Stull said. "The more Xs, the more popular."
Stull stressed that the programming, supplied by Playboy Enterprises Inc., would not be advertised and could be blocked to prevent children from watching. It will be delivered through video-on-demand technology, available now to about two-thirds of Adelphia's 1.2 million Southern California subscribers.
The move is a radical departure for Adelphia, the largest cable provider in Southern California and the nation's fifth biggest. Five years ago, Adelphia stirred a local controversy by dropping Spice — a popular soft-porn channel — from newly acquired cable systems here because Adelphia founder John Rigas considered X-rated programming immoral.
Today, the 80-year-old Rigas and one of his sons are facing prison terms after being convicted last summer for looting the company and engaging in fraudulent accounting.
Adelphia, which filed for Chapter 11 bankruptcy protection in 2002, currently is on the block. During the last year, in an effort to bolster Adelphia's bottom line, the company's new management has begun offering softer porn in various areas of the country and, in recent months, has introduced the hardest-core programming in a few markets.
The ratings system was developed informally by the adult entertainment industry and has become an integral part of how pornographic movies are edited for specific audiences.
Single-X-rated movies feature nudity, long-range or panoramic and medium-range camera shots, simulated sex and sex between women. Double-X-rated movies show intercourse, oral sex and close-up shots. Triple-X-rated movies feature anal sex and visible ejaculation.
Cable executives said Adelphia's decision to air hard-core porn was unlikely to scare bidders in the current auction. Some predicted that if Adelphia subscribers flock to the new triple-X programs, other cable operators could follow.
Greenwood Village, Colo.-based Adelphia joins a marketplace already teeming with ways to procure hard-core sexual content.
The Internet has become a carnal cornucopia, with graphic images, videos and cartoons. Satellite providers also have gotten in on the act. EchoStar Communications Corp., the nation's second-ranked satellite TV provider, has offered triple-X programming for several years on its Dish Network. Satellite leader DirecTV Group Inc., owned by Rupert Murdoch's News Corp., peddles fare that falls just shy of triple-X. Some industry experts say explicit programming has helped satellite providers carve out a 20% share of the pay TV market.
"It's scary how much money is made on porn," said Tim Connelly, editor and publisher of Adult Video News, an industry trade magazine that estimates that when strip clubs, magazines, the Internet, TV and DVDs are included, porn is a $10-billion industry. "That's more than Hollywood makes at the box office. And it just grows and grows and grows. It's mainstream now."
Despite an outcry among some religious organizations, parent groups and political figures over the coarsening content coming into homes, the "indecency" backlash could lead to even more graphic programming on subscription services.
"The conservative groups that want to clean up the airwaves have forced people looking for racier stuff to pay for it," said Bill Asher, co-chairman of Van Nuys-based Vivid Entertainment, the world's largest producer of adult programming. "It's given pay TV more authority to go further than before."
Insiders and analysts estimate that consumers spend more than $1 billion a year buying sexually graphic movies and other explicit fare on TV through pay-per-view and video-on-demand services. (That's not counting orders from hotel rooms, where 50% of all movies purchased are from the adult category.)
The revenues have quadrupled since the late 1990s, when cable operators first began moving beyond "soft" porn to embrace double-X fare.
Today, analysts say, adult programming gives cable and satellite distributors their highest profit margins. Such suppliers of adult programming as New Frontier Media Inc. and Playboy get from 5% to 15% of the average $9 consumers pay for a movie, according to industry sources. By comparison, distributors typically give Hollywood studios half of the revenue on pay-per-view movies, which usually costs under $5 per rental.
Although the prospect of more money is enticing, most cable TV providers have been loath to move beyond double-X-rated movies for fear of inciting the anger of investors, subscribers and local politicians who regulate them. But Adelphia executives say that new digital technology, which allows programs to be blocked, has given them more comfort and cover in offering hard-core fare to subscribers.
Adelphia's new strategy also has opened new opportunities for Playboy, which is providing triple-X programming to television for the first time.
"We're all public companies that want to make a lot of money," said James Griffiths, Playboy's top entertainment executive. "Playboy needs to supply whatever programming our distributors need to be successful. What do customers want? All you have to do is look at what's available on the Internet."
Playboy, the Chicago-based company founded by Hugh Hefner, once was one of the most conservative players in the world of adult entertainment.
Industry sources say Hefner's daughter Christie, who now runs Playboy, was uncomfortable going harder core and was protective of the company's carefully cultivated image as a gentleman's brand.
In the meantime, rivals began to chip away at Playboy's dominance. Chief among them were Boulder, Colo.-based New Frontier and Vivid, which produced harder-core fare for pay TV operators looking to keep pace with Internet and satellite rivals. In 2001, to protect itself, Playboy bought three channels owned by Vivid that aired the company's double-X programming.
Industry sources said Larry Flynt also was attempting to become a force in the triple-X world of television, offering distributors attractive terms to carry his new HustlerTV. One adult industry veteran, however, said Flynt had received a lukewarm reception in the cable industry because of his notoriety for pushing the envelope.
In the bigger scheme, the partnership between Playboy and Adelphia in Southern California is a small step in a more ambitious plan to lure viewers away from the Internet and make television their primary destination for porn.
Playboy is gearing up to supply a variety of programs on demand that will keep subscribers running up the bill. One goal: to increase the seven-minute viewing time historically clocked by the average person who orders an adult pay-per-view movie.
Said Playboy's Griffiths: "We would love for people to sample more of our programming."
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