Raging Bull writes on ADT: "How come it is basically the only media industry that is not consolidated? In film, TV, and music all the companies are consolidated with each stusio being a subsidiary of a parent company. Porn isn’t like this a lot of independant private companies. The producers would flex much more power if it was consolidated also could control the flood of content which makes the market saturated. Would like to hear from some insiders on this."
Tricia Devereaux responds: "Most of the big production houses handle their own sales in-house. I’m not going to give specific info that some people don’t want out there, but there ARE some companies owned by the owner or VP of another company, there are sister companies that share sales teams."
Your not describing consolidation. Consolidation is when a number of companies in the same industry consolidate. Your talking about conglomeration. But what you should be talking about is collusion- all of the porn companies agreeing how much product each will release to keep product at a level that it would be profitable. This would also depress compensation as there would be less work for too many performers who would underbid each other.
This industry can’t be consolidated because no Xer in this town pays their bills. Debt avoidance helps make the careers of big shots on the way up and it insures that those on the way down go broke. It’s like the reverse law of attraction. If you deal in a business that is perceived as a vice, there there are no rules, honor or loyalty and honest men are hard to come by. No pun inttended.
The reason why this segment of the media industry hasn’t been absorbed by conglomerates yet is trivial. It’s the strong moral stigma that is still attached to porn. It simply doesn’t mix well with the moral and religious values that are held by a majority of Americans. If you have any doubts about it, just look at the low social status of porn performers or for that matter anyone else involved in porn. Look at the status of prostitutes, who are considered outlaws. See how many politicians are willing to be associated with anything that remotely involves sex.
However, the younger generations are more flexible and are not going to be squeamish about taking control of porn. The question is not if Porn Valley will become an extension of mainstream media conglomerates, but when and how.
At the same time, looking at it from a purely theoretical point of view, if profit margins continue to fall some restructuring will become inevitable soon. Consolidation and vertical integration would be good strategies to pursue at this point, to get out of the pool of companies that will go out of business.