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But big companies gooms big hotels are among those cashing in on a multibillion-dollar industry. The video store chain Larry Peterman owned in this valley of wide streets and ubiquitous churches carried the kind of rentals found anywhere in the country, from Disney classics to films about the sexual adventures of nurses. Peterman built a thriving business until he was charged last year with selling obscene sexx and faced the prospect of bankruptcy and jail.
Just before the trial, Peterman's lawyer, Randy Spencer, came up with an idea while looking out the window of the courtroom at the Provo Marriott.
He sent an investigator to the hotel to make a record of all the sex films a guest could obtain through the hotel's pay-per-view channels. He then obtained records on how much erotic fare locals were buying from their cable and satellite television providers. As it turned out, people in Utah County, a place that often boasts of being the most conservative area in the nation, were disproportionately large consumers of the very videos that prosecutors had labeled obscene and illegal.
And far more Utah County residents were getting their adult movies from the sky or cable than from the stores owned by Peterman. Why file criminal charges against a lone video retailer, Spencer argued, when some of the biggest corporations in America were selling the same product?
What that says to me is that we're normal. His case illustrates what has happened to an industry that used to be confined to the margins of commerce, in the seedy parts of most towns, run by people who never dreamed of taking their companies to Wall Street.
Whatever the phenomenon may say about the nature of American society, the financial rewards are so great that some of roomss biggest distributors of explicit sex on film and online include the country's most recognizable corporate names. General Motors Corp. The 8. EchoStar Communications Corp. It also owns a company that sells sex videos to nearly a million hotel rooms.
The major satellite and cable companies do very little marketing of roosm X-rated products, and they are not mentioned in annual reports except in the vaguest of euphemisms.
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For hotels, the sex that can be piped through television generates far more money than the beer, wine and snacks sold from the rooms' mini-bars. Just under 1. Chains such as Tower Records stock nearly titles in their so-called erotic category. On the Internet, sex is one of the few things that prompts large s of people to give up their credit card s. According to two Web ratings services, about one in four regular Internet users, or million Americans, visits one of the more than 60, sex sites on the Web at least once a month, more people than go to sports or government sites.
Some of the most popular Web properties are owned by a publicly held company in Boulder, Colo.
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That company, New Frontier Dex, has stock traded like any other, and it expects its video network to be in million homes within a few years. LodgeNet is a major employer in Sioux Falls, S. It is a client of the ing giant Arthur Andersen, and nearly a fifth of the company's public shares are held by investment company Red Coat Capital Management of New York. We contribute to local charities. Somebody's got to take control of it, and we figure it might as well be us.
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We see ourselves as the deated driver of this business. I've always said that other than the desire for survival, the strongest desire we have is prlvo. It seemed likely that the industry would remain where it had always been: provi out of sight, but profitable, and faced with consistent legal problems. What kept the market relatively small, in the view of people in the industry, were the barriers between consumer and product.
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Typically, a person would have to go to a run-down part of town to find hard-core adult films or bookstores. These retail outlets frequently were raided by law enforcement authorities, adding the risk of shame, or arrest, for customers. Inthe Sony Corp. Once the venue had moved from theater to the privacy of the home, the adult entertainment industry was never the same. But even with most Americans owning VCRs, people still had to take a trip to the video store, risking some embarrassment.
Roomz television and the Internet removed the final barriers. Pprovo and satellite programmers allow people to buy a variety of sex-based programming. Consumers could watch movies of people having sex without ever leaving home.
What investors and bigger corporations soon discovered was the vast audience for pornography, once the privacy barrier was eliminated. Twenty percent of all American households with a VCR or cable access will pay to watch an explicit adult video, and 10 percent will pay frequently, according to Gooms Frontier and Vivid. That interest explains, in part, why the production of pornographic films has grown tenfold in the past decade.
There are provoo nearly 10, adult movies made every year, according to an annual survey of the films produced in the Los Angeles area. Last year, there were million rentals of hard-core sex films, according to Adult Video News, an industry magazine that is to pornographic films what Billboard is to records.
It even has its own film awards, modeled after the Oscars. But video rentals have reached a plateau in the past ropms years, and the future is pay-per-view at home and pay-per-view from the Internet. At the same time roooms technology was making it easier for people to view pornography, legal obstacles were falling. The Supreme Court case Miller vs. California established a threshold for defining illegal pornography; a major test was that it had to be considered obscene to the "average person, applying contemporary community ssex.
But that proved to be short-lived. When video store owner Peterman was prosecuted for distributing obscene material in Utah last year, he became one of the few video retailers in the nation charged with such a crime in recent years.
In a state long regarded as a bastion of morality, more than 4, people ed petitions supporting his prosecution. But Peterman showed that he had 4, regular customers for sex videos. His lawyer argued that Peterman was not violating community standards, because people in Utah County bought 20, adult sex videos from one satellite programmer alone in the period that Peterman was said to have broken the law; it was double the volume in most cities the size of Provo.
And in the Provo Marriott, guests were paying for nearly 3, explicit adult videos every year, according to court testimony. After the Peterman trial, that hotel dropped its adult movies. Porn on demand At a time when political campaigns from the presidential level down have made an issue of sexual excess in broadcasting, the corporate entanglements in the pornography business have blurred the lines of the debate.
In Missouri this year, Sen. John Ashcroft, a Republican, ran denouncing "Hollywood's decaying influence" on society, singling out his Democratic opponent, the late Gov. Mel Carnahan, for accepting donations from Playboy executive Christie Hefner. Carnahan had countered by pointing to donations to Ashcroft from Charles W.
Ergen, chief executive of EchoStar, prpvo sells adult pay-per-view through its fast-growing DishNetwork satellite division. Carnahan died last week in a plane crash. Adult is there if you want it. Unlike distributors of mainstream Hollywood pictures, sex-film distributors typically offer the programmers a split of 80 percent of the revenue, compared with 50 percent or less for sec features. Impulse buys, in which customers tap a code into a remote and a movie follows, also have spurred in-home sales of pornographic films.
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It's easy and it's private. That's the key. At the same time, the companies say new technology makes it possible for parents to keep such programming away from children. But if you want it, we offer a wide range of programming that is available in the market we're in. Only one chain, the relatively small Omni Hotels, chose to remove the sex films.
We don't have topless waitresses in the restaurant. But he said he had received phone calls and letters of thanks from 50, people, more than for any other corporate decision. Much larger hotel chains, such as Marriott, which calls itself the world's largest hotel management company, with nearlyrooms in the United States, and Hilton, withrooms under its control, have not made changes.
Some critics said Marriott, run by several prominent members of the Mormon Church, though not affiliated in any way with the church itself, should drop its adult movies, given the stand against explicit sexual materials that Mormons have long taken. But company officials said they could not make unilateral decisions for the hotel owners who paid to be a part of the Marriott chain. The two companies that provide hotels with pornographic films are traded on Wall Street and have enjoyed big run-ups in their stock prices over the past few years.
The chairman and chief executive of On Command is Jerome Kern, a former New York corporate lawyer active in civic and volunteer causes, who serves on the board of New York University and as a director of Volunteers of America in Colorado. The company goal is to get into an additional 1-million hotel rooms. Analysts say at least half the revenue comes from adult films. Soaring profits While the big companies that deliver sex films to homes and hotels will not talk about how popular explicit sexual materials are, the makers and distributors say the volume is enormous.
And court testimony and documents made public in the Peterman case also offered some insight into the profit potential. People think it's run by the Mob, or a bunch of guys with gold chains. I grew up in Paris, Illinois.
I have a master's of business administration degree. Analysts of electronic commerce and telecommunications say the mainstream sex market might be leveling off, but new technology is likely to bring in more consumers. We see lots of people logging on at three in the morning.