'Show us the money and we'll show you the money shot," says Anna McCusker of PrideVision, the country's first gay and lesbian television channel. For as little as $6 a month, PrideVision's subscribers can watch explicit gay and lesbian pornography six of seven nights a week on the new channel's Exxxtreme Heat late night movie.
"It's definitely supply and demand," says Ms. McCusker, vice-president of marketing of PrideVision, a channel owned by Headline Media Group Inc. of Hamilton. "Why not turn it up a notch?"
More than ever before, sex sells. Erotica and pornography figure into the marketing plans of at least three of the estimated 50 new digital channels. They join a growing list of media companies including Shaw Communications Inc., BCE Inc. and Astral Media Inc. that have put porn into the business plan. While the companies don't make a habit of publicizing it, make no mistake: Pornography is big business.
"It's an enormous market," says Iain Grant, managing director of consulting firm Seaboard Research of Brockville, Ont. "Companies that you would not otherwise associate with the industry find themselves happily cashing in the dividend cheques."
How big exactly is anyone's guess; consultants interviewed are unaware of studies tracking Canada's porn trade. Companies interviewed for this story declined to reveal revenue and earnings from sex-related entertainment.
Industry sources estimate annual revenue from the adult video market in Canada alone is well more than $500-million. Adult pay-per-view services available through cable TV companies and direct-to-home satellite TV distributors are believed to have about 10 per cent of video's market share.
Pornography "is a huge driver of discretionary TV spending," says Ian Morrison of the Friends of Canadian Broadcasting. "It's something distributors don't want to talk about."
The Canadian telecommunications sector, meanwhile, earns about $500-million annually hosting Web sites. A substantial portion of this is derived from sites distributing explicitly sexual material. A 1999 study by Jupiter Communications of the United States estimated that pornography accounted for about 40 per cent of the paid on-line content market.
Pornography's economics are compelling. Take pay-per-view, for example. The cable or satellite TV distributor takes 10 per cent of revenue off the top and the rest of the fee is split equally three ways between the distributor, broadcaster Viewer's Choice and the studio that actually made the film. The formula is the same for mainstream movies, but porn is more lucrative: Adult films generally cost the consumer twice as much as the latest Hollywood hit.
For example, this month, a Rogers Cable Inc. digital TV customer can pay $3.99 to watch Shrek or $7.95 to see The Best of Perfect Pink #8. The cable company has 48 pay-per-view channels available in Toronto, five of which offer adult films. These five generate about 25 per cent of the company's total pay-per-view revenue.
"Everybody in the industry makes reasonable money," says Randy Jorgensen, owner of Adults Only Video, a video rental chain with 42 stores in Ontario, Manitoba and British Columbia. Mr. Jorgensen is a pornography crusader who took his fight for the right to sell sexually explicit material to the Supreme Court of Canada in 1996.
"It's extremely easy to get into the industry and develop a business model that creates an income," Mr. Jorgensen says.
While communications companies are shy when it comes to discussing their interests in adult entertainment, they are quick to defend their turf. Astral Media of Montreal was a vocal opponent last year when Hugh Hefner's Playboy empire applied for three digital TV licences to feature soft- and hard-core pornography.
The broadcaster, owner of a 50.1-per-cent interest in Viewer's Choice, is quick to link its revenue from adult films to Canadian cultural issues. Under Canadian Radio-television and Telecommunications Commission guidelines, 5 per cent of Viewer's Choice pay-per-view revenue is set aside to help fund the development of this country's TV and feature film industry, Astral says. In comparison, the company estimates between 1 and 2 per cent of its forecast $450-million in 2002 revenue will be derived from distributing adult films.
"Astral is a Canadian company, and as far as I know, Playboy is not a Canadian company," says Ian Greenberg, president and chief executive officer. "We give a percentage of Canadian revenue back to the Canadian industry, even though it may come from adult programming."
It's difficult to gauge public opinion. The Canadian Broadcast Standards Council (CBSC), an industry-financed watchdog, reports a dramatic rise in the number of consumer complaints received over the past five years, climbing from a low of 243 in 1995-1996 to a high of 14,844 in 1998-1999. But the bulk of those more recent complaints focus on two shows: U.S. radio host Howard Stern's short-lived broadcasting career in Toronto and Montreal and outrage over Dieu Reçoit, a French-language TV show satirizing religion. In 1999-2000, the most recent year of data available, the number of complaints slipped down to 2,103.
The CBSC may soon be monitoring pay-per-view movies, a responsibility that now rests with Ottawa's CRTC. Like the CBSC, the commission relies on the public for complaints.
Last year, Bell ExpressVu, a satellite TV distributor owned by Montreal's BCE, found itself in the spotlight when the CBC's the fifth estate reported the service was showing U.S. pornography depicting sadomasochism, rape and torture. The hard-core films had not been approved by Canada's film censors or customs officials and an embarrassed Bell ExpressVu quickly yanked the programming.
"We're not in the policing business," says CRTC spokesman Denis Carmel. "What can be shown on TV is not determined by bureaucrats in Ottawa."