Isn't Jeff's business model basically what you hope to see in a market downturn:

1. Low overhead = higher profit margin
2. Distribution deals (Max, Brandon)mean less financial outlay on the front end then straight production, thus lower financing costs
3. Web distribution (incl VOD) cuts wharehousing and shipping costs (Box printing too)
4. Niche market generally avoids competing with discounters (not many 6hr bukkake comp tapes out there)
5. Paying Ryan Knox with food stamps helps too.

Jeff - has any biz-school wonk asked to case study you yet?