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Greg calls me back Sunday afternoon, July 2, 2006. Greg: "You are the first Adult industry person I've ever given an interview to. So I hope you make it a good one. I don't care if you take two hours. Everything is on the record." Zeboray is profusely quoted in the latest issue of XBizVideo magazine. Luke: "How did you get into Adult?" Greg: "I first insured dancers in various strip clubs such as Main Attractions, Mr. Jays in 1991. I met some Adult people. My first clients were Jon Dough and Deidre Holland. I met a person who handled HIV-testing in San Diego County, which is where Dave Cummings went to get his HIV-test. Cummings called me about insurance. Dave referred me to Bill Margold. Bill said, this is out of level. Call Jeffrey Douglass and Lenny Friedlander. I called Jeffrey and Lenny and they said, yes, we want an insurance person for the industry. "This is the summer of 1995. "In terms of revenue last year, the Adult industry represented a little over $200,000 to our insurance agency. That's approximately half of my business." Luke: "How good a job is the Adult industry doing protecting the talent from STDs?" Greg: "As long as they are not condom mandatory, they are not doing a good job. HIV-testing gives a false sense of hope." Luke: "Has your attitude to the industry changed over the past eleven years or have you changed?" Greg: "The industry has changed radically. My attitude is still positive." Luke: "What's your take on the Adult DVD industry's financial doldrums?" Greg: "JimmyD called it the porn depression. I call it the first step in the coming new world order. The landscape of Adult production companies five years from now will not resemble today. I see mergers, acquisitions and many failures." Luke: "How long will DVD last?" Greg: "It's being replaced now by VOD and the internet. Within five years, companies will be lucky to get 100 pieces out the door. VOD will replace DVD in all entertainment, not just Adult. I believe there are peer-to-peer networks out there where people are already distributing scenes and whole DVDs for free." Luke: "How's the Adult industry fighting piracy?" Greg: "They don't have a clue. How many Adult companies file a copyright on their titles before they release a movie? It's almost nil. If you file a copyright on a movie prior to its release, you can not only go after [a pirater] for damages, but for all costs incurred. Conversely, once a movie is released, you can only go after the [pirater] for damages, not for your costs. You can spend $150,000 going after someone who made 300 copies of your movie and the judge gives you $3,300 damages." Luke: "What do you think is the median number of units sold per release?" Greg: "If you can get 900 - 1,100 pieces out the door on a new release, you should go to your church and thank God. If you can get $10-$12 per release, you should go back to church and thank God. "A lot of these companies do not self-distribute. Distributors take anywhere from 20-30%. So if a typical guy gets 1,000 pieces out the door, that's $7,000." Luke: "What kind of job do you think the Free Speech Coalition is doing representing the interests of the industry?" Greg: "I don't think they're representing the interests of the industry anymore. They've made a commitment to become the second coming of the ACLU." Luke: "So they're pushing more of a leftist agenda than representing the pragmatic business interests of the industry?" Greg: "Absolutely. When somebody can tell me why an Adult industry trade group should oppose the Utah state registry [penalizes the email senders of sexually explicit material if they are not sure the recipient is at least 18], I'll listen. I see nothing wrong with that. The FSC position is that that is a restriction of fair trade. You can't send advertisements out to kids about alcohol or cigarettes. "Right now the FSC has healthy membership because of 2257. As you know, I have the ear of most of the major companies in Adult. And they all tell me that they joined as an insurance policy. When that 2257 issue is resolved, you just watch how many people do not renew their memberships." Luke: "Has anyone succeeded Russ Hampshire in his role as the industry godfather?" Greg: "No. It's a tragedy. The industry misses him more than it will ever admit. I'm just glad that he's still an active part of my life." Luke: "What do you think about the industry's trend towards increasingly demeaning product?" Greg: "I think it's terrible. "Porn is consumed by a minority of American households, by porn addicts, who get bored of regular porn and want more and more. People who let porn become their sex life, the worst product out there is screwing them up worse. "I'm a devout libertarian. I don't believe in laws [regulating expression], but I've long thought that all of the entertainment industry has an obligation to society to better society. I believe you should have enough decency that you won't put out [detrminental] product even if it makes you money. "Rob Black. I will say publicly what many people will say privately -- the day they lock him in a prison cell, the industry is far better off. The government at that point will have said -- here is the line you can not cross. Right now there is no line in the sand. But when Rob Black is convicted, they're going to know what you can and can not do." Luke: "What do you think of Max Hardcore?" Greg: "We find him uninsurable. That should tell you something. We received an application a couple of years ago and when we reviewed that website [maxhardcore.com], we decided it wasn't something we wanted to get involved in." Luke: "Do you think the 2257 regulations will ever get enforced?" Greg: "I do. Other than sending IDs out to what they call secondary producers, such as website operators, that's the only provision of 2257 that I see as wrong." Luke: "Do you think there are any millionaires in the industry who are solely employees?" Greg: "No." Luke: "Do you think there are any billionaires in the industry?" Greg: "No way." Luke: "Maybe this isn't a $12 billion a year industry." Greg: "It's a $400 million [DVD] industry, maybe $500 million. "The industry went out and promoted these figures that included strip club revenues, hotel revenues, etc and came up with this [$12 billion] figure, hoping it would lead to the legitimization of the industry. What it has really led to is a bunch of idiots who watch this stuff and think that porn is the new gold rush. They jump in and produce a few movies and think they're going to get rich. Everyone I've seen who's done that has walked away with no money. We no longer insure these people. They don't stick around. "The latest one I did not want to insure was two guys -- one in San Clemente and his partner in Newport Beach. They went to the AEE show in January, hooked up with a producer/director. One time I was told they spent $45,000 and one time I was told they spent $85,000. Let's say they spent $45,000 to produce a stupid beach movie, the same movie that's been produced for 20 years. "That movie shouldn't cost a dime over $25,000. This producer/director has been around forever. It's not like people are going to stand in line to buy his product. "You should have heard the grand plans from these investors about what they were going to do. I hope they each told their wife that they could lose all their money. "They're going to have to pay a distributor 30% to distribute their movie. If God grants them a favor, and they get 1,000 pieces out the door at $10 a piece, that's $7,000 back. If they sell it to a cable channel, they're going to get about $6,000 for it. "They're never going to get their money back. "About a year ago, a guy took out a $100,000 equity line on his home. He gives that money to a performer/director to shoot four gonzo movies. They couldn't sell any of the movies. "This guy went to someone I know and practically begged the person to help him sell those movies. The guy couldn't help him. "The man who took out the equity line is going to lose his house. "I don't feel sorry for the guy. That's just pure stupidity. "I saw Steve Hirsch say on Neil Cavuto [Fox News show] that Vivid was a $100 million company. "Vivid's DVD sales, if lucky, are $20 million a year. If Vivid is a $100 million company, that's with all the other businesses they own." Luke: "What type of insurance do you offer?" Greg: "Production insurance. Errors and Omissions insurance. You have to have production insurance if you want to rent locations and have a film permit and rent equipment and wardrobe." Luke: "What changes do you see in production insurance?" Greg: "Insurance companies are going to require that all cast and crew be paid on a W2 [making them employees rather than independent contractors who fill out a 1099] and covered by an active workmen's compensation policy." Luke: "How often have production companies or insurance companies been sued for what has happened on a porn set?" Greg: "As far as I know, it's never happened in the 11 years I've been selling production insurance [to pornographers as well as other shooters]." Luke: "How much is production insurance?" Greg: "For $200,000 in production costs, the full package is about $5,500 a year." Luke: "How much work have you put in trying to sell health insurance to porn stars?" Greg: "A lot of work over the years. With the previous generation of talent, I had a fair amount of success. The current generation of talent is not worth the time. The ones coming in the business now are 18-year old kids who are completely irresponsible and have no conception of what health insurance is about." Luke: "How well do the talent agencies look after the interests of the talent?" Greg: "Not well. What matters to the agents is how much work they can get the talent and how much money they can make off them. If I was talent, I'd go without an agent." Luke: "What do you think about the rise of LA Direct Models from nobody to the top of the heap?" Greg: "Derek is a hustler. He has no strong competition." Luke: "What happened to World Modeling? They used to be number one." Greg: "They're the walking dead. They got outhustled. Ten years ago, he had all the talent. He placed ads. He signed up the talent. All the directors and producers were looking at his books every day. But new agents such as Derek started taking the girls out to meet directors and producers and getting the girls driven to the sets." Luke: "Will we see another Adult company going public in the next six months?" Greg: "I know of one going public in the next six months." Luke: "Do you think making porn is honorable work? Is it noble?" Greg: "It's not noble. Even honorable? I'd probably say yes. As long as you do things legally and ethically, you are contributing to society, at least financially, if not with the product." Luke: "Yet you know many people whose lives have been hurt because they worked in porn [as talent]." Greg: "The people who come into the business as talent are f---ed up. No normal girl is going to do porn. The girls who come into porn are massively lazy. They don't want to work. They have no education. They're a bunch of idiots. They lost their moral compass long before they were old enough to do porn. They partied so much they were already into drinking and doing drugs. These are not normal middle-class girls. If they weren't doing porn, they'd be doing something else as bad as porn or worse." Luke: "How can it be noble then to make your living off screwed up people?" Greg: "I said it was just noble financially." Luke: "If these girls are all screwed, it makes one squeamish to make one's living off them." Greg: "Some people are born to put personal desires and financial rewards a step ahead of someone else's misery." Luke: "It's a sick thing to make your living off people who are screwed up." Greg: "It's not something I would do, but I'm not going to fault people who do it. "Let me tell you a story. A girl I know of, 18 years old, comes in the business. Within three weeks, she's already gone. I hope she'll never come back. "This girl was already an alcoholic when she came in. She'd already had a kid. She lived with her parents. "She tried to tell her mom that she did porn and her mom flipped out. She said to me, 'I felt so bad that I just lied and said, 'Just kidding, mom. I'm really just doing modeling.' "Every time she talks to her mom, her mom says, 'I want to see some pictures.' Of course her mom is proud of her. She thinks her daughter is a model. "The agent should've said to this girl, 'This isn't the right career for you. Your family will find out. It's going to devastate your relationship with your family. You already have a drinking problem.' "Instead, agents say things like, 'Don't drink while you're working. But look at all these jobs I got for you. You're going to make $10,00 in the next two weeks." Luke: "Working in porn would have to devastate relationships between a child and her family." Greg: "You better believe it. A girl is better off being a whore. She can go to San Francisco and turn tricks day and night. Then, when she leaves the business, she can come to LA and nobody is going to know what she's been doing. When a girl shoots porn, the images are distributed around the world. These images never go away. "Her personal relationships are over. First, they lose almost every friend they have, not so much because their friends disaprove, but because of the lifestyle change. They lose the closeness with their family. They'll never have a normal relationship because every guy they're with will look at them as a whore. He'll say, 'This is fun. I'm having a great time.' But she won't be who he wants to take home to mom and introduce as the one who will give her grandchildren. "When they make the decision to enter Adult, they are throwing away a big chunk of their future. If I could talk to every new girl who enters the Adult business, I'd explain everything I just told you. And if half of them turned around and walked away, I'd say that was wonderful." Luke: "Have you slept with or dated any of these girls?" Greg: "Never. For many reasons. One, I've almost always had a girlfriend. I do not believe in cheating. I don't have a girlfriend now. I have long figured that as long as I didn't even try to go on a date with a girl, nobody in the industry could ever say, 'Watch out for Zeboray, he's out to meet the girls.' Two. There can never be a bad situation between me and a girl that causes her to tell people to stay away from me and that kills my business." Luke: "You must get to know these girls fairly well. How do you keep yourself from becoming Captain Saveaho?" Greg: "I don't get to know them well anymore. When I first got around the industry, I tried to be a friend to a lot of the girls. They could call me. I'd let them stay at my house. It only took me a year or two to realize there was nothing I could do for them. It's so painful to watch girls swear they'd never step in the fire again, and then turn around and do it. I have ceased all personal chats with talent." Luke: "So what do you think of the work of Mark Kernes?" Greg: "Very little. "I am a proud Christian. I was born a Christian. I was raised a Christian. I am a strong Christian. If Mark Kernes wrote his anti-religious stuff against the religious right who probably are potentially harmful, I could stomach it. But instead, Mark Kernes continuously writes absolute hatred for all Christians. Hatred for all religions period, but he seems to attack Christians more than any other. "I support the industry. I support its legal right to exist. I like the industry. But because I'm a Christian, I'm a horrible person." Luke: "Does he let you know that on an individual level?" Greg: "I avoid him like the plague. "A long time ago, when he was running for reelection to the board of the Free Speech Coalition, I came out with a list of who I thought should be elected and who I thought should not be elected. I said that Mark Kernes should not be reelected. That he brought nothing to the FSC except blanket approval for Jeffrey Douglas. "Mark took great offense to that. "Unfortunately, with all his rants, he's made me angry at him. "He works for a company that is pro-free-enterprise, and Mark claims to be libertarian, but as far as I'm concerned he's 100% socialist." Mark Kernes responds:
Fred writes:
Most people get into porn for primary reasons other than financial. Talent wages, at least for the top tier talent, have yet to take a hit, but they must. Greg: "You know why Mark Kernes, Mike Ramone, talk about religion all the time? Because deep inside they believe there is a God and they're scared to death." Luke: "What do you think of AVN?" Greg: "I suspect there are kinks in that armor. I bet a significant number of their advertisers are well behind on payment. If you look at the magazine, it hasn't gotten any bigger over the years. I bet that's why AVN has gotten so big in the consumer trade show business. "If you want an honest to God trade publication, there's none finer than XBiz." Luke: "What do you think of the performance of Dr. Sharon Mitchell?" Greg: "Even though I don't care for her personally, I have some respect for her. She's driven. I introduced in 1997 to my neighbor, Sandy Petering, with QWest. They discussed testing and determined that the PCR-DNA test worked best. "I do not believe the industry is served best by only having one testing facility. Competition brings out the best in people. "HIV testing is wonderful for new people coming into the business. It's going to keep HIV-positive people out. "I don't believe the tests should be distributed among the talent on a shoot. It should be private and only made public when someone tests positive. "I love Darren James but he is an example of why I have a problem with the way the testing system is used. "Sharon Mitchell has stated many times that Darren was infected in Brazil. Yet when he came back to LA and took the PCR-DNA test, he tested negative. It was after he worked for three weeks, apparently spread the virus, and retested, that he came up positive. "The point is that Darren was already positive when he received the negative test. "If you walk on to a set today, and they've finished the boy-girl scene, and you walk up to that girl and ask, 'Was the guy you just worked with HIV-negative?' Her answer will be yes. You'll say, 'How do you know?' She'll say, 'I just saw his test.' "'Honey, I hate to tell you, but that test does not say he's HIV-negative. Didn't the Darren James situation prove that to you?' "It's being improperly used and creating false hope. "Mark my words -- if they stay non-condom, there will be another outbreak. It could affect somebody that's big, such as Vivid." Luke: "Vivid for so long was condom-mandatory but now they're advertising some of their movies as condom-free." Greg: "I have reason to believe that financially they had no choice." Luke: "How has working around this industry affected your social life?" Greg: "None, because I don't tell people. I don't not tell people because I'm ashamed of it. When I first started dealing in the business, I would tell people, but I got so sick and tired of the stupid questions...that I just shut up about it." Luke: "Why do you think the DVD market is going to largely disappear in the next five years?" Greg: "Because cable VOD, computer VOD, and peer-to-peer networks, are going to take away the DVD market and this industry will be in trouble. "If you talk to any of the facilitators such as TVN in Burbank, they'll tell you there's only room for one or two more cable VOD channels in this country. Then all the cable networks will be full. "We do the E&O (Errors and Omissions) on a few cable VOD channels. Now the cable markets are paying a licensing fee of 10% (that's how much the porn producer gets for the VOD sale of his product, the Internet VOD companies (AEBN, Hot Movies etc) pay between 25-35%)." Luke: Who are your friends in the industry? Greg: "Russ Hampshire, Robert Herrera and John Chambliss (Acquarius Broadcasting Corporation, a cable VOD channel), Jim Malibu, Sieg Badke at Pure Play, Drew Rosenfeld at LFP Video." Luke: "What kind of job do you think Drew is doing with LFP Video?" Greg: "Wonderful. "We've insured LFP for a while. We've had some issues that probably would've resulted in the severing of our relationship. Dustin Flynt worked with us to renew the relationship. But LFP was on the watch. We kept an eye on what was going on. We were very uncomfortable having directors who were horribly drunk -- drunk all day, drunk all night -- being in charge of sets. Ultimately, we pay for that risk. "When Drew Rosenfeld took over the video division, LFP was removed from the watch list. That's how comfortable I am with Drew's ability to make the hard decisions and see to it that things get done properly such as getting rid of directors who think they should be able to drink all day. "As long as Drew is running that company, they're a model client. "He's made hard decisions. Some people have gotten their feathers ruffled. "I worry to death that Drew physically can not handle this kind of stress and that it is going to kill him." Luke: "I guess LFP stopped distributing Vivid because that became unprofitable for LFP over the past year?" Greg: "I understand that it has never been profitable." If the Vivid deal was unprofitable from the beginning, why did LFP renew the deal in the summer of 2005? It only became unprofitable in the last year. Also, if you look at the interview Larry did with AVN a few months ago, Larry was quoted as saying that most of LFP Video's profits in 2006 would come from the Vivid deal. Luke: What happened at Red Light District? Greg: "When Dion started that company, he made sweetheart deals [with various directors]. Now business ain't good. I don't care who you are. David [Joseph's] just been ridding himself of people with sweetheart deals. He's making prudent business decisions so they can go forward profitably. Everyone's interpreting that as though they're broke, but I don't think they are in terrible shape." Luke: "Who are the top six production companies in terms of revenue?" Greg: "You're not talking distributors such as Evil Angel? "Vivid, Wicked, Digital Playground, Adam & Eve..." Luke: "Red Light District?" Greg: "They are not a production company. They never have been. They're a distributor. "Everybody wants to go to Evil Angel because they sell pieces like crazy. They get top dollar. John Stagliano does not screw around. In flat-out intelligence, John Stagliano is the most intelligent man in Adult." Luke: "He's probably the most respected." Greg: "He commands respect and he deserves respect." |