It's long been thought that investing pornography companies can provide a hedge against an economic downturn. In times of high unemployment, men have more free time, are often depressed, at home alone, and...you know the rest. So perhaps the recent numbers for adult DVD sales are a bullish signal for the economy. In 2006, sales of adult DVDs fell by more than 15%, after a decade of steady growth.
So has the porn industry fallen on hard times? Maybe not. The growth of adult sites on the Internet and even cellphones may just be spreading the wealth more broadly: it used to be that people bought DVDs, but now they have many other options.
If you're interested in making a bet on growth in the industry, the two main publicly traded players are New Frontier Media, Inc. (NASDAQ:NOOF) and, of course Playboy Enterprises, Inc. (NYSE:PLA).
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