Marriott, Westin, and Hilton

These major hotel chains all offer in-room X-rated movies delivered to the hotel by one of two major distribution companies, LodgeNet or On Command. Some analysts say these in-room sex movies generate more money for the hotel chains than revenue from the hotels' mini-bars.

"The 5 percent or 10 percent of revenue that the hotel chain gets, that's pure profit to them because they have no cost," says Dennis McAlpine, an entertainment industry analyst. "They didn't put in the wiring system, they didn't supply the programming." (Read more of McAlpine's analysis.)

CABLE & SATELLITE COMPANIES

Cable and satellite companies channel pornography into millions of homes and take approximately 80 percent of the pay-per-view dollar that gets spent by the consumer, according to Bill Asher, president of Vivid Entertainment, which produces adult movies.

AT&T

AT&T is the biggest American company that has accommodated itself to the pornography boom. Its cable division, AT&T Broadband, distributes to subscribers the explicit porn channel, The Hot Network. With its pending $72 billion merger with cable competitor Comcast, the new AT&T Comcast Corporation would become the nation's largest cable outfit.

For AT&T, porn distribution is great business, but there's no mention of adult material in the company's annual report, nor how much it contributes to the company's bottom line.

"Remember, there's virtually no cost to AT&T for carrying [adult material]," says Dennis McAlpine, entertainment industry analyst. "That's virtually all found money going into the bottom line, so it can be a significant amount."

In the spring of 2001, an interfaith coalition of religious leaders brought their concerns about AT&T's connection to porn directly to the top at AT&T. Cardinal William Keeler, co-chairman of the Religious Alliance Against Pornography, met with AT&T Chairman C. Michael Armstrong, and told him, "Ma Bell shouldn't be selling smut." Keeler says that "when a company like AT&T, which has won the hearts and allegiance of so many, gets into this business, it's a way of legitimating it, saying it's OK, it's alright. That's the Good Housekeeping Seal of Approval we don't want to see put on this kind of business."

While AT&T refused to grant FRONTLINE an interview about The Hot Network, the company has publicly stated its position. It says that competitive pressures with companies like General Motors, which owns rival service DirecTV, are keeping AT&T in the business. (Read AT&T's letter of explanation, which cites competitor companies that also offer The Hot Network.)

General Motors

General Motors owns the national satellite distribution service DirecTV, which channels pornography into millions of American homes for a nice profit.

For example, via DirecTV, the three adult movie channels packaged and owned by Vivid Entertainment Group were carried in 40 million homes before Vivid sold them to Playboy in July 2001. "We know what's called a 'buy rate,' which is that for every million homes you're in, in any given month we'll know how many times someone bought a movie. Generally our buy rates were between 10-20 percent."

That's four million homes every month where people were paying to view a Vivid adult movie. That's good for Vivid, and it's good for General Motors.

Top Five Cable Companies:

COMPANY SUBSCRIBERS

Comcast/AT&T Broadband 22.2 million

AOL Time Warner 12.7 million

Charter 7.0 million

Cox 6.2 million

Adelphia 5.7 million

(Source: New York Times, Dec. 21, 2001)

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