BUSINESS Plan Altered Likely to Surface Has Arrived IMUS Lam W Adult Films Make Way to Wall Street

20 - MANCHESTER HERALD, Tues.. Oct. 5, 1982 iinorify-hiring Unidentified sub 'Anti credit card BUSINESS plan altered likely to surface has arrived IMUS lAM W Adult films make way to Wall Street ... page 3 BAi page 7 page 25 The X-rated film business, for many years mob- to V4-inch widths) which will bring down cassette costs, IF TH E R E IS a slowdown coming in the X-rated film controlled, is coming out of the closet and making its (2) the expansion of the cable TV industry, (3) the incor business, one of the country’s largest producers of these way to Wall Street. poration of the video recorder feature in TV sets in '84 movies, Caballero Control Corp. of Canoga Park, Calif., Fair tonight; Manchester, Conn. At the moment, it's only a trickle. But you’re likely to and '85 and (4) continued rapid growth of the video doesn’t believe it. Its growing sales figures — annual see a much bigger splash in the pursuit of Street funds, Dan Dorfman cassette recorder industry. volume’s reportedly over $5 million— reflect continuing cloudy Thursday Wednesday, Oct. 6, 19b<. given the boom in video cassette sales and rentals and, brisk demand. “ Four years ago the Xrated film may K IN G OF VIDEO, which had sales of $5.4 million along with it, the demand for adult sex films you can have been nearty all of the (cassette) business; today — See page 2 Single copy 25c Syndicated last year, also sees continuing strong growth for adult watch in the privacv of vour home. maybe 20 percent. but that’s still a lot gravy, says IrralJi films and tells me: “ We want more X-rated product Figures are difficult to come by, but trade sources put Columnist sales manager Roger Chan. “ And we’re going to con penetration.” At the moment, these films represent tinue to grow because we’re putting a lot more quality the video cassette business in the United States at close about 15 percent of the firm ’s annual income. into these films.” to a billion dollars annually by the end of '82 — with Interestingly, King of Video, one of the country’s roughly 20 to 30 percent of it in soft- and hard-core por largest independent distributors of video cartridges, had Obviously the much greater availability of conven nographic films. an '81 loss of $569,000 — but its annual report to An example of the pitch for Wall Street backing for the tional films (fro m '“ Gone with the Wind” to “ Mickey shareholders failed to put the usual parentheses around Mouse” ) has sharply reduced the market share of the X- Secrecy women,” he says. “ We want to make people feel good production of X-rated movies is the formation of Westar the number, thus giving the apparance that it actually about eroticism and their sexuality and our films will he rated movie. However, one of Wall Street’s leading Productions Ltd. had $569,000 profit. That’s the first time I ’ve ever seen or in good taste ...” entertainment analysts. Pane Webber’s Lee Isgur, heard of something like that. W IT H IN T H E N EXT few weeks, the firm will fire Presumably then, the new genre of adult films will thinks the sex flick business is also suffering from a Mai Vice president Steve Vincent calls it “ a mistake that off a statement with the Securities and Exchange Com mark a sharp departure from the current crop of movies boredom factor. ‘"There’s a lack of creativity m pom appealed somehow got by the accountants and lawyers.” And he mission seeking agency approval to sell $5 million worth offered by a 2 Vi-year-old privately held company that’s films; after you’ve seen the guys and gals doing their says a corrected copy of the report was sent out. of limited partnerships to be used for the production of run by Kulawik and his Westar partners — IFC Enter thing in all the different ways, it becomes a bore,” he 30 adult films for both cassettes and cable TV. King of Video, which has since moved into the black says. “ And without change, you’re looking at a tainment, Ltd. has more than 50 million shares outstanding and its The plan calls for joint ventures with independent film diminishing business.” by Herald IFC, which provides the Eros adult film service for stock sports a bid price of about 16 cents a share on the producers both here and abroad, who, in turn, would pay-TV outlets, features a series of women in Maybe so, but in any event the word I get from a ante up part of the production costs. over-the-counter market. The shares, however, could provocative poses in its slick sales brochure that ■ criminal attorney intimate with organized prime figures Brokerage firms would be called upon to pitch Westar come under some pressure, given the recent freeing up promotes such films as “ Beach Blanket Bango,” “ In is that the mob will continue to maintain a strong hold By Paul Hendrie units to investors at a minimum of $2,500 per unit. And a of some 2 million shares for potential sales by insiders. satiable,” “ Sweet Dreams Susan,” “ French Postcard on the business. “ There’s too much money to made tax write-off of $1,250-$1,500 is contemplated in '83, the Herald Reporter Girls,” “ Chambermaids,” “ Bottoms Up,” “ My Tongue O B VIO U SLY T H E QU E STIO N of the growth of the from associated lines like drugs, prostitution and year in which the bulk of the films are expected to be Is Quick” and “ Orgy Machine.” adult film business will largely hinge on the video blackmail to walk away,” he says. “ and this business The Manchester Herald is filing a produced. cassette market. And there are signs of a potential slow has got some of the nastiest guys you wouldn’t want to formal complaint with the state IFC IS C U RREN TLY holding merger talks with a Film production takes in big bucks. But one Westar down. One key reason; The roughly 7,5(X) outlets selling meet.” Freedom of Information Commis 6 publicly owned company — King of Video Inc., a Las the cassettes — about two-thirds of which are strictly sion, challenging the Board of principal, Chris Kulawik, who formerly sold real estate Vegas-based distributor and licensor of video cassette tax shelters and is currently heavily involved in dis outlets for video-tape products — apparently aren’t X-rated film dollar parade Directors’ policy of holding com films. And completion of that deal may come within the studied buying new products as vigorously as in the past. 1. Insatiable mittee meetings in secret. Editor tributing sex flicks, says the new company plans to next two weeks. produce films at a cost of between $100,000 and $250,000. That’s the word I get from the Video Software Dealers 2. Wanda Whips Wall Street Dan Fitts said this morning. IFC presently is unprofitable, though the cable base is Association, which cites the escalating costs of inven 3. The Dancers The Herald’s action follows the “ We’ll keep them that low because we expect to rapidly swelling for its inventory of some 250 adult tory and the sharp rise in rentals at the expense of /mt- 4. Any Time, Any Place Board of Directors’ refusal Tuesday would induce the state Department operate on tight timing and financial budgets,” he says. films. It also recently sighed a deal with a European By Alex Glrelli right sales. Sources say rentals are running about 12-to- 5. Fox Trot night to change its policy. of Transportation to drop it. company, a five-year $1.5 million annual contract, to Herald City Editor K U L A W IK , W H O ASSE R TS that he and his 1, vs. sales, and the VSDA calculates the average rental 6. 1,001 Exotic Nights Democratic Mayor Stephen T. Pen provide its product line for Australian consumption. partners have never been involved with or approached at $3 a day, compared with a tape purchase of around 7. Room-Mate ny told the board he expects the With a public hearing that may Officials have also said, however, by any underworld figures, tells me Westar films will be As Kulawik sees it, the adult film business has $55. 8. Taboo policy to be challenged. decide the fate of downtown Main that details of the plan can be geared to the couples market. nowhere to go but up. And in this context, he points to Last year video cassette distributors purchased about 9. Debbie Does Dallas The directors based their stand on Street only hours away, the towh changed and the purpose of tonight’s hearing is to get public suggestions “ These are not the kinds of films that will be made in (1) the expansion of the video cassette industry through 5.5 million cassettes; the '82 figure is estimated at about 10. Behind the Green Door a recent legal opinion prepared by today was studying a bank’s oppwsi- as well as to gauge public reception. a hotel room in three days and be a put-down of the introduction of smaller cassette tapes (from V4-inch 6.5 million. Source: King of Video, Las Vegas. Town Attorney Kevin M. O’Brien. tion to the reconstruction plan for O’Brien said he believes precedents the street. by the Freedom of Information At today’s meeting with Fuss, Commission indicate no require Town officials would like to adjust Kandra hopes to get a briefing on P in brief.

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