Sunday, August 3, 2008

Jenna Jameson's

I was taking a look at the Forbes Celebrity 100, a list of the 100 wealthiest people in sports and entertainment, and their story about Jenna Jameson caught my eye. In case you don't know her name (or at least won't admit to it), Jameson is the world's most famous pornstar. While she has done only about 50 movies (not really very many by porn industry standards), she has managed to successfully cross over from her hardcore background into mainstream media. She has appeared over 30 times on Howard Stern's radio and TV show, has made numerous guest appearances on a variety of E! TV shows, has just completed a pilot for a new reality series, and her autobiographical How to Make Love Like a Porn Star spent six weeks on the New York Times bestseller list.

Jameson's holding company, ClubJenna, expects revenues of $30 million this year, at nearly 50% profitability! They plan to expand into Jenna-branded strip clubs, cosmetics, and an apparel line, as well as some racier products you might expect. You can even download a "moan tone" for your mobile phone. 40% of the company's revenue comes from web site membership fees and site management fees for other porn stars' Web sites, which they run for 16 other actors, including Tera Patrick and Briana Banks.

Now here's the punch line... She hasn't had sex on-camera with a male partner other than her husband in seven years. In fact, she plans to grow her business without ever again having sex on video with anyone--male, female or herself. She has shot enough footage with her husband to release two movies a year for the next decade. She has signed five new actresses to star in ClubJenna movies, offering them a rare deal that includes 3% residuals on any sales over 10,000 copies (most porn stars do not receive residuals on their films).

Jameson's story is full of lessons for entrepreneurs. Let's take her story out of context for a minute. This is a woman who was being underpaid in a dead-end job while other people made money off of her work. But she didn't just take it lying down -- she decided to leverage the exposure she received by branching out into other products and services, all while still keeping her "job". Her first contract with Wicked Pictures paid her barely $1,000 a picture, doing eight to ten a year. But as a headlining stripper, she was getting paid $5,000 a show. Add to that posing for pictures with fans, selling her latest movie, and tips, and she was making as much as $50,000 in a week while on tour.

In the Forbes interview, her husband, porn star/director/producer Jay G. Grdina, said, "This has developed from an individual star into a porn conglomerate. Her brand has been developed with the reputation of being the best, and now we are capitalizing on that and monetizing the name."

Not only that, they largely control the distribution channel. While their movies are distributed by Vivid Entertainment, much of their content is available exclusively through their web site.

This combination of a strong brand and a tightly controlled distribution allows them to diversify much more easily. When launching a new product, they already have both marketing and distribution channels in place, as well as a loyal established customer base who will buy the new products, helping with initial market penetration.

She has also made a successful leap to passive income. Shooting a feature film every month and then touring as a dancer makes for a pretty grueling schedule. Now the vast majority of her income comes from product sales, Web site subscriptions, and site management fees. If Jenna Jameson goes on vacation for a month, the money still keeps coming in.

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