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Originally Posted by AsianDivaGirlsWebDude
Hi Paul...thanks for weighing in...
You are among the more prolific, and I assume more profitable, non-exclusive content producers. I'm assuming the vast majority of your product ends up on multiple web sites around the net.
As I understand it, in the good old (bad old) 8mm loop days, the men in dark hats ran most of the adult movie biz. 
Then along came Alex DeRenzy (RIP) and a host of other feature Directors that were able to produce high quality content independently that was shown in adult movie theaters.
Next came the VHS video wave of gonzo type producers, like Ed Powers etc...
Distribution became a whole different game (although I have heard that video bootlegging was all around).
With DVD, the technological hurdles for duplicating were higher, plus many new distrbutors had sprung up. Distribution went through a new form of upheaval.
With the advent of broadband Video On Demand the entire game is changing yet again.
I think a good distribution tier is that a producer can make at least double their investment, distributors double again, and retailers double again. The problem that I see is that many of the Distributors (as middle men if you will, between the Producer/wholesaler, and retailer/rental seller), get greedy and gouge on both ends.
I guess a good question to pose is, who are the best Distributors (in terms of profitablity to the Producers), or should more Producers focus on direct sales to retailers?
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Unfortunately, the issues that AMA discussed are all to common in the DVD wholesale/distribution. There are very few distributors that everyone says good things about.
Many distributors carry baggage with them, and some more than others. There are plenty of studios that won't do business with certain distributors for the biggest problem of all, non payment. The largest distributors are especially notorious for this, and often stretch out their terms hoping you'll go under before it's time to pay the bill. This is because they can. Very few studios are in the position to say no for the sake of 180 day terms for an extra (just a number) 400 pieces.
Self distribution brings on a whole new set of challenges. Many distributors and stores don't want to carry your product for the simple fact that it's from a new company. They have enough product to sell and do not need your product to make money. So unless it is amazingly different, they don't care. It takes immense demand and company branding to have a successful release. Most times, a new release DVD will sell under 1000 pieces even after the 90 day mark. Sad but true. Since distributors are typically purchasing DVDs for $8-$12, you can guestimate the math yourself. Make sure you deduct about 30% if you have a wholesaler and packaging and replication costs. Also box design and authoring if you don't do them yourself. There are exceptions to everything, but this is typical. Also, make sure you have a reputible DVD lab that won't backdoor your product. This is also an issue to think about.
It's tough to reinvent the wheel, since anyone who owns an adult store can purchase brand new DVD compilations for $1-$2 and then sell them retail for $20. There are also quite a few features they can pick up for this price. So with limited shelf space and budget, a store can only carry a certain amount of new releases. Since more than 13k DVDs are released each year, valuable shelf space is held at a premium. So factor this with the 13k + released last year... and the year before.... and the year before that, etc.,And the biggest chains and online retailers are very selective about the products they sell and more important, market well themselves.
Obviously retailing the product yourself produces the highest yields, but many consumers already have built in favorite places to shop for their porn. It seems there is always room for either cheap products and ground breaking titles, with most other titles falling somewhere in the middle.
I wrote this fast and am sure there's much much more to add. There has been some great discussions in this thread so far, and I know some of my statements are rather general, but they are from actual events. I welcome more producer and (if any are around) distributor insights.