There's little doubt that the International porn empire known as Eurocreme is going through some tough times, but it was in a sense inevitable. The key to understanding ECs current and future situation is to examine the events that were out of their control, as opposed to the consequences of their own actions.

Built through a merger series of production and distribution businesses, EC tried to industrialize porn production with a high volume/low margin strategy that relied on several factors.

A) International Market
B) Continuous product flow from both Eastern and Western European sources (in-house, contracted, distributed)
C) Successful Integration of Smaller Businesses into a Larger whole (studios, distribution, retail, web)

The guys behind EC are all experienced players, and the strategy was initially successful. However there were several areas where things went wrong. These included:

1) Financial Factors -- Exchange rates and production inflation: EC's strategy relied on a selling tons of units into the US market. When the dollar sank like a stone, prices had to go up and EC lost a competitive edge that was a cornerstone to their business model. On the production side, Vlado Iresch and his son are the creme of crop of Czech gay porn production. As of this writing he has produced/directed more bareback movies than any other player in the business. The Czech Republic and Slovakia have long been fertile ground, and combined with a professional production team doing bareback it initially worked quite well. But as productions cost rose and competition for models became more intense, the cost/quality advantage Vlado enjoyed evaporated.

2) Product Line Confusion and Sameness of Product

During the past 5 years, Vlado Iresch was a machine, cranking out films featuring caverjected sexbots barebacking like crazy. Intially hedging their bets, EC went with 1 Distribution and Pacific Sun for seperate lines. EC deftly started with three lines of product, Bare, Raw, and Twinkz, and intially things went spectacularly well. The strategy was brilliant, and to a US market starved for twink bareback content, it was manna from heaven. 1D was the smartest young distributor in the business, and even the condom lines meant to compete with Bel Ami and Cobra did well. However, Vlado chose to follow a straight model by having contract boys whom he used over and over again. In a way it made sense, as Vlado had a pipeline to fill, and he was always shooting. Also, the young performers actual sexual orientation didn't matter to Vlado. Can a straight boy play gay? Of course. Does that get old after a while? Without doubt. After all, it wasn't passion that drove Vlado to instruct his models to do American style bareback cumshots. If you subscribe to the theory that gay men make the best gay porn, you'll agree.

The split product lines were both smart and cute. It evoked the bygone days of the record business where labels came and go, and often didn't matter. The lines of Bare, Twinkz, Raw, and Punkz split between two distributors was great thinking, and provided just enough cover for the different lines of product. Following the merger with Stud Mall, they picked up several products/lines for distribution as well. Two years ago, things looked very good for the world wide operation.

But the key to the operation was Vlado, and while he produced an incredible amount, his product became cookie cutter. What started as a brilliant marketing move, ended up as a tired sales ploy. A porn company's brand is central to the marketing of their product. Customers often purchase by brand, and gay customers can be the most loyal in the world.

EC initially emphased brand, but by attempting to market dozens of video lines many with the same models, pairings, and settings, EC diluted whatever brand equity they had. Between that, flooding the market, and then reflooding it with compilations sold at an even lower cost, it's like an attack of the clones.

This product formula can be summerized as:

Straight Models & Producers + Sameness of Product + Excessive Production + Remarketing = Glut & poor demand

3) The Barebacking issue and Rufus the doofus

Over the past five years, EC has been realtively unqiue in having a high schedule of production for both bareback and condoms films. Having some condom lines and some bareback, and some bareback crossover within those lines was simply confusing. Bareback customers generally don't want condoms and vice-versa. They lost some of the economies of scale because certain customers would only take a percentage of their product. These economies were another cornerstone of their business, and without them the business model does not work.

Since the business EC was attempting to build was to rival or outdo Euro players such as Prowler or Dusedo, they needed a lot of product to keep its pipeline flowing. It wasn't so much inevitable that EC and Rufus FFolkes would tie up, just that the pairing of course made so much sense. Another production powerhouse, Rufus' record speaks for itself. He rivaled Vlado in sheer numbers, but was simply too sloppy in his business practices to be taken seriously. His public disgrace and imprisonment made it difficult for EC to continue bareback production in the UK, even as other producers move in to fill the void.

EC had some very good ideas about how to run a modern porn business, but their business relied on several factors beyond their control. The company's attempt to commoditize gay porn relied on a strong dollar, and a cheap model pool. The product sported corporate authorship and lacked the authenticity that many of today's customers want, especially on the bareback side of the business. The company also was missing the real web component. The company waited too long to get it's product onto the web, and when it finally did the companies compilations alienated some on the VOD side as well.

The way forward

Since EC has experienced negative synergy -- the sum of the parts is actually less than the parts taken individually -- the only way forward is divestiture of the core components, in EC's case driven along both ideological and physical boundaries. It's like this: the original Eurocreme based in the UK does not want to produce bareback films, Vlado is worried about the current state of barebacking in the Czech Republic with the renewed government interest in these activities, and both New York and Homoactive require bareback product demanded by their markets. The four components that merged to create EC should split, and New York and Homoactive should produce locally. The question is whether the market will accept the products -- or even note any differentiation. Certainly, one can hope that Eurocreme UK will be accepted by the gay porn gliteratti that own the GayVNs, but since winning a GayVN means absolutely nothing in sales, its irrelevant. The only relevant question is whether the four that make EC can extricate themselves from one-another -- and survive.