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Technology Stocks : C-Cube
CUBE 37.36+1.2%Nov 26 3:59 PM EST

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To: Stoctrash who wrote (28141)1/15/1998 5:38:00 PM
From: DiViT  Read Replies (1) of 50808
 
What's the difference between the porn producers and the rest?
The porn producers always seem to make money.

Next tech winners
Richard Folkers

01/19/98
U.S. News & World Report
Page 66
(Copyright 1998)


The Consumer Electronics Show is a playground for pitchmen and spokesmodels. New products featured at this Las Vegas extravaganza, whether they are wide-screen digital televisions (they're everywhere) or talking car stereos (they listen, too), are touted as "breakthrough products" or "new paradigms." Not every innovation soars, despite presentations staged like fashion shows or music videos. All too often, the hot product at these shows is later ignored by wary consumers who see no pressing need for mini-disk digital audio players or convection ovens.

The hype at this year's show is especially feverish. The industry hasn't found a must-have product since the videocassette recorder gained popularity more than a decade ago. This year sees the debut of digital television and the maneuvering in the battle for supremacy between the digital video disk, or DVD, and a CD-size medium called Divx (for Digital Video Express) as the replacement for the videotape, CD, and CD-ROM. DVD and Divx have a key difference: You own a DVD, and can watch it as often as you like. With Divx, you will pay $4.50 for the disk, but must call for a digital key to unlock it for future viewings, renting the content each time.

To the chagrin of the mainstream electronics industry, the winner and loser could be determined by the adult-entertainment industry, whose customers eagerly adopt new technologies, like the Internet. "Pornography launched the VCR boom in the '80s," says Ken Michaels, associate editor of Adult Video News. It helped popularize CD-ROMs. X-rated material makes a lot of money on the World Wide Web, Michaels says, just one part of an adult industry that generated $8 billion last year.

Most electronics marketers stay away from porn's isolated pavilion, except for an occasional foray to gawk at the provocatively dressed starlets, who sign autographs and smoke. Electronics-industry publications don't come by for interviews. There's even a sign warning the squeamish that they are about to use the same restroom as porn-industry people.

Tangled Web. So what is the adult industry banking on this year? Producer Adam Glasser says his videotape business is shrinking but his Web site is booming. Glasser predicts that Web TV and other devices that use a TV set will bring the Net to the family room. Porn, he says, helped the mainstream realize the Net's entertainment value.

The home medium to watch, says Joe Giarmo of Metro Inc., is "DVD, and that's it." Metro, one of the few publicly traded adult-video companies, will use the DVD's capacity to add extra camera angles, interviews with actresses, and a "director's cut" of the film. Giarmo predicts the industry will shy away from Divx, because of fears that with the call-in requirement, someone could track a viewer's risque tastes.

Rob Black, a director for Elegant Angel Video, is about to make his first DVD. Black, 24, shoots on digital videotapes but sometimes mixes in images from film. What's the difference between the adult-entertainment industry and the mainstream industry? he asks. The porn folks always seem to make money. Judging from porn's track record, it's a good bet the mainstream will be watching.

Picture: No caption; Drawing: No caption (Illustration by John Ueland for USN&WR)
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