While VOD brings less return per unit sold, you will sell a whole lot more VOD's than DVD's. Its easier to get (no late fees), its cheaper, its more of an impulse purchase (trust me) and it reaches a much larger audience.

The problem is that its an entirely new market approach. Everyone knows that 90% of the DVD endusers are renters. So the producer sells to a distributor, who sells to a video store, who rents the unit 50 times at $3-10 (if you factor in late charges). For every person who actually watches a porn move --as opposed to buys it--are producers even getting $1? I doubt it.

The VOD distribution system puts the producer in a position to collect fees from EVERYONE who watches a movie--as opposed to from a few video store owners that buy it. If there wasn't more money in renting to the enduser, video stores wouldn't buy porn.

I don't think the answer is to keep it inhouse. if the enduser has to jump from Vivid, to Club Jenna, to JM, they are going to be discouraged from making a purchase. Maybe if you want to talk about a Naughty America format, but lets not get sidetracked. The industry can prosper if it uses Gamelink or Empire as a central clearing house and moves as much product as it can.