Obscene Profits

It is midday on a cluttered movie set in an unassuming office park in a well-manicured neighborhood of Culver City, Calif., and the crew is getting restless. Penthouse Pet Sunny Leone, in cascades of jet-black hair and black lacy underthings, has taken close to two hours to struggle through three pages of dialogue for her debut film, thwarted by line flubs and interruptions from a noisy generator, rumbling trucks and the roar of planes passing overhead. . . .

This is business as usual on the set of Vivid Entertainment in Los Angeles, the nation's largest producer of video pornography. Privately held, it claims annual revenue of $100 million. Quite possibly half that sum falls to the bottom line. Filmed in three days at a cost of $50,000, the 85-minute Sunny will likely produce total retail revenue of $5 million, much of it spread among Vivid's "white-collar" partners--cable systems owned by Comcast, Time Warner and others, the DirecTV satellite service and hotel networks.

"[I] feel like this company is bubbling to the surface and will explode," says Vivid Chief Steven Hirsch, who cofounded it in 1984 on $20,000, much of it borrowed, and still owns it with two partners. . . .

"[T]his is a business, and we treat it like a business," says Hirsch, 44, whose obsessively neat office sits across the 101 freeway from General Electric's Universal Studios and displays a wall of plasma screens tuned to financial news, sports and dozens of security-camera feeds. His partner, William Asher, who holds diplomas from Dartmouth and the University of Southern California, says Vivid could reap riches on new outlets such as cell phones and iPods. "Adult is almost too good to be true," he says.

But the feds are now mounting the biggest attack on porn since the Reagan Administration 20 years ago. Congress is trying to legislate new curbs, while the feds step up enforcement of existing laws, racking up 40 obscenity convictions since 2001. That compares with just four in all eight years of the Clinton Administration.

Three partners, netting $50 million a year?? Golly! Details here from Forbes.