I first checked out Adult Entertainment Expo in 2006. So, I had a benchmark for this year’s trip. The differences were both profound and immediately identifiable. Since a number of exhibitors have the same booths in the same places, it was easy to get a feel for the layout and to note the changes.
Adam & Eve, Hustler and Red Light seemed almost exactly the same. There may have been some changes to booth hardware, but in 2008, I found them in the same spots they occupied in 2006. BangBros moved and introduced a fresh concept. While the booth was different, the results were the same. BangBros always had a crowd around it. This was the case for Pink Visual as well.
The absences were more salient. I noticed immediately that Penthouse and Playboy/ClubJenna didn’t bother to attend. GayVN, which occupied a substantial corner of the exhibit hall in 2006 was down to a few booths. Upstairs in 2008, there were more small booths than in 2006. It is starting to look like the market may be looking for alternatives.
I suspect that cost is among the underlying reasons for the change that seems imminent. According to one of the employees at the Sands, where AEE is held, the prime real estate occupied by the likes of Vivid and Wicked cost $250,000—a figure that does not include the cost of the booth itself. Ponying up a quarter of a million dollars just gets you the space
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With a bear market on the horizon for the porn industry (“On the horizon?” one source commented, “it’s here.”), expect the industry to start throwing quarters like they’re manhole covers. Investments of more than half a million, when you consider shipping, materials, talent and support are going to be much harder to justify in the current adult economic climate.
A hypothetical adult business with $100 million in annual revenue and 20 percent net margins would have net earnings of $20 million. An AEE investment of $500,000 would translate to 2.5 percent of net profits. An investment of $1 million would trim profits by 5 percent. A single event can put substantial pressure on margins—and thus puts considerable pressure on marketing departments and show organizers to get results. It appears that some are reconsidering this approach.
In the past, AEE was the one event you could not miss. If you wanted to be a major player in the business, you had to bite the bullet. Attending AEE was merely part of the cost of doing business. This does not seem to be the case any more. I wouldn’t sing a requiem for AEE yet. The show still topped 30,000 guests, and there were plenty of exhibits and attractions for fans and trade alike. But, I think 2009 will define the trend, showing AEE as a remnant of the glory days or the victim of a brief hiccup.
-Tom J
-Photos by Bam Bam
Something to say?
Let’s hope its a hiccup. I’ve never been to AEE, but it has been a dream (and the source of countless wet ones) for years now. Thanks for the insight surrounding costs and profit margins. The possible upside of stiffer competition could shake things up a bit and convert to true talent on the screen - give the big guns a run for their money.
Left by Tony on January 15th, 2008