Enterprise: The Rich Pornocopia

Despite the nation's economic difficulties and tightened household budgets, the pornography business is wallowing in pay dirt. The market for erotic books, films and paraphernalia, which are sold mostly to the middle class and middle aged, has increased by an estimated 300% in the past five years. Police experts figure that annual sales of pornography are about $500 million, and some put the total as high as $2 billion.

Pornography's outsize profits are attracting many investors. Stock in Grove Press, a pioneer publisher of salacious books and U.S. distributor of foreign sex films, is now sold on the open market. Trading is scheduled to begin next month in the shares of another purveyor of erotica, Olympia Press; its latest skin flick, Barbara, cost $32,000 to make, grossed $ 11,700 in its second week in Manhattan and is scheduled for national distribution.

Weighing the Profits. In New York City, members of the Mafia's Colombo, Lucchese and Genovese families are muscling in on the rich pornocopia, bringing new money and organization to the fractionalized trade. Since the syndicate took over the two-bit peep-show machines, the grainy amateur films featuring fading strippers have been replaced by slick color productions with sound, stories and attractive young models. Each movie is twelve minutes long, but in most machines viewers must drop in a fresh quarter for every two-minute segment. The 69 peep-show emporiums in midtown Manhattan bring in an estimated $5,000,000 a year. Bookkeeping is wildly informal; some distributors split the take with the shop owners by weighing bags of quarters on a scale that they carry from store to store.

Full-length feature films make up by far the most profitable and fastest growing segment of the porn business. There can be big money in the shoestring "sexploitation" flicks, which are ground out in backyards and garages by youngsters with hand-held cameras. Man and Wife, produced in Los Angeles 18 months ago by Matt Cimber for $32,000, has grossed $4,500,000 so far. Alan Roberts, 23, a partner in SAE Productions of Los Angeles, reports that his company recouped its $45,000 investment in Zodiac Couples within three months after its release. In San Francisco, two brothers, Art and Jim Mitchell, dropped out of college to produce their Cinema 7 nudie flicks and show them in their own theater, The O'Farrell. They now earn an estimated $500,000 a year. So busy are the makers of porn films in San Francisco that they have depressed the market for imported sex movies, and are now selling their own products abroad—a small victory for the nation's trade balance.

In terms of profits on invested capital, grime pays even more handsomely for producers of stag films for the home. The male "actors" in these movies are often paid nothing—they do it for the sport—the women usually get no more than $25 or $35 for the whole show. The biggest expense is processing the film. From a single master copy, the producer can make 250,000 prints at a cost of about $2 to $4 each. Black-and-white stag movies retail for about $25; in color they cost $50.