Things are so bad these days even the porn industry could use a helping hand. Right or left, it doesn’t matter as long as it’s holding lots of money. Two smut kings, Larry Flynt, publisher of Hustler magazine, and Joe Francis, creator of the Girls Gone Wild videos, even asked Congress for $5 billion to make up for soft demand.
At least one Tar Heel member of the industry is feeling the pinch. Sales at Hillsborough-based Adam & Eve fell 3.6% to $110 million in 2008. It’s still the nation’s largest mail-order company for erotic material, but it faces stiff challenges from the ailing economy and changing technology. When money is tight, people are more likely to put off purchases, just as they might wait for better times to buy a sexier pair of sunglasses. Why spring for Hot Cherry Pies 4 when you can make do with Hot Cherry Pies 3?
The company also must contend with Internet-spawned competitors such as Charlotte-based AEBN, a provider of adult videos on demand — not to mention the plethora of free porn online. “The glut of adult DVDs out there and the availability of free adult content on the Web have definitely affected us,” spokeswoman Katy Zvolerin says.
In fact, DVDs are no longer the top source of revenue. During the past few years, Adam & Eve has returned to its roots, depending more on its own stimulus packages. In 2005, vibrators and other sex toys each accounted for 23% of sales, same as DVDs. Last year, DVDs dropped to 19%, while vibrators and other sex toys each made up 29%. Online sales have surpassed those from the company’s mail-order catalogs, which Phil Harvey, president of parent PHE Inc., launched in 1970 to sell condoms.
It plans to continue its focus on toys and novelties, offering a wider variety of prices. As for its own line of Adam & Eve DVDs, which it began producing in the 1990s, the company is focusing on bigger-budget, star-driven productions. “Basically we’re making fewer movies but better ones,” Zvolerin says. “The future of adult DVD is unknown at this time, but adults will always want sexual enhancements to spice up the bedroom. And luckily, these can’t be found free online.”
Location is everything
In a way, computer maker Lenovo Group Ltd. became more of an American company after replacing its Yankee CEO with a Chinese citizen. Though Lenovo stock still trades on the Hong Kong exchange, Morrisville not only is home of the company’s worldwide product development and marketing, it’s now the base of its chief executive. Bill Amelio, who had “come to the end of his three-year contract” as the company reported its first quarterly loss, was succeeded by Yang Yuanging, who held the CEO job for several years before Amelio and helped build Lenovo’s business in China. While Amelio ran the company from Singapore, Yang spent three years in Morrisville as chairman, spokesman Ray Gorman says. And that’s where he’ll stay.