The Big Picture: Interview With Kelly Holland

This article originally ran in the February 2016 issue of AVN magazine. Click here to see the digital edition. The adult industry has known Penthouse Managing Director Kelly Holland for the better part of 20 years, beginning after she started directing adult videos for Vivid in 1994. In fact, she enjoys telling the story of how she got involved with adult in the first place. Seems she began looking for extra income to supplement her earnings as a documentary filmmaker, and someone told her that Vivid was looking for someone to edit some of the movies being shot by their team of directors. That arrangement went along swimmingly for several months—until Holland, ever the perfectionist, started calling to Vivid’s attention some of the continuity problems she was seeing in the films she was editing. Upshot? They offered her a job directing. As “Toni English,” Holland spent more than a decade directing, mainly for Vivid but also for Adam & Eve, Wicked Pictures and the ill-fated Jill Kelly Productions, but beginning in 2007, she plied that trade, now under her own name, almost exclusively at Penthouse Video—and so began a relationship with that brand that has brought her to the heights that a savvy adult entrepreneur can expect to reach. “I actually came in 2006. I was brought in to a company that had been acquired two years prior, and they had not developed a broadcast division; they were looking to do that, so they asked me to come in,” Holland told AVN, referring to AdultFriendFinder’s acquisition of Penthouse. “I had just come off of Playgirl, where I had been hired in to design the look and feel and the content for the channel that would define the brand, so I was asked to do the same thing for Penthouse. So I came in, produced a little content, and then I would say Penthouse took a weird turn as we went on an ill-fated road to try to become Playboy and buy Playboy and do all sorts of things, and in the process of that turn, they hired the entire Playboy executive staff on a Friday night—they did this crazy raid of the executive staff and they started down that road for a while, never bothering to ask if that was a successful road; like, were those people successful at Playboy or was the Playboy strategy successful, which it was not. So I left, I went away. That lasted for about two months and I was in New York and got a call and was asked to come back, and now slightly more officially go into the position as executive producer, first for content, and then ultimately president of broadcast.” And Holland definitely had her work cut out for her. Besides hiring more staff to run the production and broadcast operations, Holland also acquired a massive studio complex in Chatsworth, California, which served as Penthouse TV’s base of operations. As president, Holland began creating channels in the U.S. and Europe, and over the years has entered into partnerships that have put Penthouse TV in every section of the globe. “The Europeans are very open to us because they perceive Penthouse as primarily being a European brand, or at least 50 percent a European brand,” Holland explained. “Plus, I’m very easy to negotiate with; I don’t come in arrogant and believing that it’s my way or the highway. I won’t talk about my competing brands but there’s been a history in Europe of what I’ll call American cultural imperialism, and that has not played well. See, the Europeans don’t want to see Americans; are you kidding? Europeans like a few things. They like their local talent and they definitely like their local amateur talent. If you live in Belgium, you want to see girls in dirndl skirts and speaking Flemish; everybody wants to see the girl next door who’s just downstream enough that you could actually imagine having sex with her. “So I came in early on in 2009 very respectfully and said, ‘What is it that you need? I’m not going to tell you what I’m giving you; I’m going to ask you what you want,’ and they said, ‘We would like this and that,’ and I said, ‘Great! I can accommodate that,’” Holland continued. “So we’ve been much more flexible about creating content. We have ten channels around the world, serving over a hundred countries: Latin America, Canada, U.S., obviously; in Europe, all the way from Turkey, which is a secular Islamic government, to Israel and all points in between. We also have a great partnership with CanalSat, which is a French platform that launched the channel into French-speaking Africa on CanalAfriq, and we’re in the Caribbean with that same partner for CanalCarib. I’m launching VOD into Mongolia, which I’m as happy to do that as I am to do a huge deal in Germany or the U.K. or France, just because it’s Mongolia. I just want to press-release Mongolia like it’s the biggest thing on the planet because I just love saying, ‘Penthouse: Live in Mongolia!’ I just love that idea. So we’ve been very successful with our broadcast operations, and I think part of that is because we are very respectful of the cultural specifics of the territories we go into.” But perhaps one of Holland’s greatest achievements for Penthouse TV was its move into 3D DVDs, which helped jumpstart the creation of the world’s first hardcore 3D channels. “We’ve been doing 3D for four years now,” Holland said. “We launched 3D channels over two years ago. At the time we launched them, someone said to me, ‘So, is 3D the future?’ I said, ‘Well, obviously it’s not the future because I just launched it, so it’s the present.’” However, the service’s rollout of 4K high-definition content is still meeting barriers. “Usually, I like to stay well on the front of the cutting edge of technology; I love to just contemplate where culture is going, where technology is going, both for our industry and the larger entertainment industry, media industry,” Holland stated, even while admitting, “4K, I have to say, I held back on. The broadcasters were exhausted on the retool they had to do around 3D, and I will tell you that they are still exhausted, and 4K has been there now for a couple of years minimum. They are moving into it but very slowly. A couple of big platforms—a big platform in Italy, a platform in Germany—are committing to 4K; none of them are committing to a linear adult channel yet. They’re committing to 4K in a VOD environment.” Actually, Penthouse had given up producing DVDs until Keith Gordon, a longtime friend and owner of Bizarre Video, convinced Holland to get back into that game, with Bizarre as her new distributor. “Mostly we shoot vignettes, and we have been asked by Cams.com, which is part of our parent corp, to do a weekly cam show,” Holland told AVN. “All we do here [at Penthouse’s current offices] is interstitials. We’ve outsourced the bulk of our production to Europe, because the bulk of our revenues come out of European broadcast; 70 percent of our broadcast revenues are coming out of Europe, and we are by far the most dominant brand in Europe. “It all flows through here,” she added. “For example, Rebecca Lord is producing great content out of France. We’re shooting in 4K now because we want to launch a 4K channel, so Rebecca Lord is producing in France but she’s flying [legendary cameraman] Barry Wood in to shoot because he’s a great shooter and he knows how to use the 4K cameras and he knows what we need. We’ve got people producing in the U.K. I’ve got people producing right now in Spain. We’ve also got producers here in Las Vegas, Miami—producing outside the county and what they do is, they do a movie and if it meets our specs, we’ll buy it, so that’s our solution to the onerous Measure B. Hasn’t stopped our business at all; has simply pushed dollars out of this particular city.” But Holland isn’t just the president of Penthouse TV; she’s also the managing director for broadcast, licensing and publishing for Penthouse magazine, a responsibility she acquired in mid-2014, and one she takes incredibly seriously, even to the point of having thoroughly researched the life of the magazine’s (indeed, the empire’s) founder, Bob Guccione. “Guccione wanted to take on Playboy from the beginning,” she noted. “He took an ad out, two pages in The New York Times, a centerfold, and it was a target and a rabbit, and it said, ‘We’re going rabbit hunting.’ And then he did this: “Rabbinomics: Bigger Deposits, Lower Yields.’ And then he did this ad, ‘The Old Gray Hare Just Ain’t What It Used To Be.’ I think what I want to do is dress a Playboy bunny up in a burka and take an ad out that just says ‘The New Bunny.’ And then I found this, which I like, this line from Bob: ‘The culture’s catching up to us; the competition can’t.’ That’s from about the late ’80s.” Indeed, Guccione apparently didn’t play well with his peers in the adult publishing world. “Another quasi-tragedy in Bob’s life was that he never spoke to Hefner,” Holland revealed. “He tried to shake Hefner’s hand at a fundraiser one time but Hefner walked right by him and rebuffed him, because he always felt he was Hefner’s equal but Hefner would not even acknowledge him. He and Larry [Flynt] got into a couple of lawsuits. Larry did some cartoon that dissed Bob’s wife, Kathy Keeton, and Bob sued him.” Holland told AVN much more about her researches into Guccione’s life, but that will be the basis of a separate article. In the meantime, as Penthouse’s publisher, a fair amount of Holland’s time is spent proving that, in fact, print magazines aren’t dead, as some would have the public believe—but it’s been a hell of a struggle. “No, not going the way of the dodo bird,” Holland declared. “If you have a relevant magazine to the times, and I would point to a magazine like Vice, then I think that it’s as relevant as ever and you want that magazine. Even millennials want that tactile experience. I’ll tell you something about our magazine, since that’s been in question with declining subscriptions and circulation, but the costs are still significant to put out a magazine, what with the paper and the ink and distribution: How do you market to a new audience, the millennials, who perhaps have never bought a magazine? I was asked to oversee the magazine and licensing about 18 months ago, so I had to come into the magazine and ask: Is the printed page obsolete and should we go to digital? Digital is very fungible; it’s something that’s there and it’s going to change in two hours when it gets updated, and on and on and on. There is still an incredible gravitas to the printed page, and if you understand, I believe, humbly, where this brand needs to go, then you say, how can I use the gravitas of the printed page to move that narrative forward? “I’ll give you an example: We know we need to reach millennials; it’s a very tough generation. That generation was born with a cellphone in each hand; they came through the birth canal speed-dialing things. They have such a high level of radar for authenticity; they’re so savvy about brands—they are their own brand, actually. You have to approach them in a very different way. So the question is, how do we go to millennials and make a magazine relevant? What we thought was, ‘Look, let’s use the magazine to align with the brands that millennials feel are authentic. What does that mean? You can’t go straight at a millennial and say, ‘I’m going to market to you.’ They’re just too sophisticated for that.” Holland gave the example of the recent South By Southwest (SXSW) music festival, which millennials apparently abandoned in droves after they balked at the fact that snack food manufacturer Frito Lay tried to sign and brand many of the bands that were scheduled to play. “So how do you approach a millennial who’s already got radar up on that?” she asked rhetorically. “You find out what brands are authentic to them, so we started looking, most easily, at apparel brands; what apparel brands are sort of embedded in the current millennial thinking? And we found Huf; Clearweather, which is a sneaker brand; Passarella Death Squad, a fashion brand, a streetwear brand; and we went to those people and we said, ‘Hey, we’ll give you some free advertising in our magazine; we’ll give you very inexpensive advertising, and we want to do like a licensing partnership; we want to brand some T-shirts, we want to brand some sneakers, whatever.’ It’s this theory: If you want to go into the most exclusive party in Los Angeles on a Saturday night but you don’t have an invitation, how do you get in? You find out who does have an invitation, that you know, and you go in with them.” And now that Holland has put Penthouse magazine back on its feet, she’s also trying to take it back to some of its roots. “Bob always had a commitment to veterans,” she noted. “It was early on in the Vietnam War, and it was a really sincere commitment to veterans affairs. I think now even more than post-Vietnam, veterans are a larger percentage of the population; I think that their concerns are very profound. You’ve had, in this most recent set of wars in the Middle East, more veterans because of better care in the field, more veterans surviving catastrophic injury and returning home, so you have all sorts of healthcare issues. You still have PTSD, you have reintegration into society, so Penthouse made a commitment to go back to running a monthly column called Warrior Wire, dealing with veterans’ issues. “Then there’s a project in the magazine that’s very near and dear to my heart, called Pop Shots. Pop Shots is where we ask celebrities to come in and shoot a layout and we give them full rein. We give them a supporting crew, staff, and we don’t pay them any extraordinary amount of money; we give them a budget which is identical to any other photographer so they don’t have an advantage on doing a more extraordinary layout, but we say, ‘We want you to shoot a layout that epitomizes for you what’s hot. Like, what’s hot about women?’ ... There’s a fairly cookie-cutter image or vision of what a centerfold looked like and what made that woman attractive [10 or 20 or 30 years ago]. Now you have a much broader and diverse definition of what’s hot. You could have a Kelly Shibari, BBWs; you could have Suicide Girls, tattooed from head to toe; you could have American Apparel girls, flat-chested and nubile; you could have the plastic pin-up girl. So I think the definition of what’s hot is a very broad one, and we’ve seen it taken up in popular culture with people like Lena Dunham on her series Girls, and I thought that Penthouse, of all the places and spaces in the world, was the best town square, soap box in the town square to stand on and have that conversation about what makes women hot today. “Nudes, we are that space; I don’t run from that space at all,” she declared. “I’m not the president of Penthouse; I’m the shepherdess of the sheep and I am humbled to be its shepherdess, and it bears a great responsibility, which is to understand the brand that you have, to respect the brand you have. It doesn’t mean the brand can’t change; it doesn’t mean the brand can’t grow; it doesn’t mean the brand can’t expand, but you’d better understand what the core DNA is.” And speaking of “core DNA,” Holland shared a few of her thoughts regarding Playboy’s announcement that as of 2016, there would no longer be nudes in the magazine. “Scott Flanders is a brilliant CEO; he’s just made, in my opinion, a colossally stupid decision, and this way, disaster, right?” she summarized. “I’ve made colossally stupid decisions. I think lots of people have; all CEOs probably have, or presidents or managing directors. I think, if you go back and examine why a bad decision was made, it’s because you’re not making it by analyzing the marketplace or understanding your brand or doing the algorithms around your revenue. You’re making a decision for the wrong reasons. … The Playboy announcement comes out, CNN picks it up, everybody talks about it, but that wasn’t the first time that was announced. Scott Flanders actually announced it five months earlier in a trade magazine called Ad Age. He said the same thing; he was already developing the rhetoric: Nudity is passé—that’s absurd. Nudity is never passé; sex is one of the three biological motivators for continuation of the species, and nudity is core to what promotes that. So nudity is no longer passé. ‘It’s no longer unique’—absurd. I don’t think Michelangelo looked at a 17-foot high block of marble and contemplated it and said, ‘I’m not gonna do that nude guy David. The Greeks did that a thousand years ago. It’s been so done.’ He didn’t say that. He did the most extraordinary sculpture in history, and it was a nude man and it was the David. So it’s not that it’s unique/not unique; nudity is always unique if you make it unique, frankly. “So why was the decision made? The one line that wasn’t in this current narrative but was in the Ad Age article five months earlier was this one simple sentence: Scott Flanders saying, ‘The worst deal I ever did at Playboy was the partnership with MindGeek.’ Now, I don’t know what it takes to be a CEO and be in an ongoing partnership—this is an ongoing partnership he has—and to publicly come out and say that. That’s a real violation of protocol. So for Scott Flanders, who’s very professional, to come out and say that—and I’m sure MindGeek feels the same thing: Both sides were forced into an unholy alliance by the bankers that financed the privatization of Playboy, and that unholy alliance was, at its heart, a total disrespect of what those two brands are. There’s no value judgment about whether Playboy was the better brand or MindGeek was the better brand; they were simply different brands who should never have gotten married, ever. I don’t live inside of Scott Flanders’ mind, but I have to look at what he said and look at what he did and assume that all of that forced relationship with MindGeek, and free porn and gonzo porn and everything that he would hate, forced him into this hair-on-fire, brain-exploding situation where he just said, ‘I’m taking nudity out of the brand; it’s irrelevant.’ And if you notice, his reasoning behind taking the nudity out of the brand was that there’s just too much free porn on the internet—meaning ‘my partners that I hate.’ So when you make decisions that aren’t based on a dispassionate analysis of the marketplace, when they’re based on emotion, sometimes they’re inspired decisions; sometimes they’re just bad. Any time you take a 60-year-old brand and gut its DNA or try to cut its DNA out from its molecular structures, I think you’re in trouble.” Holland also had some strong thoughts on Measure B, the mandatory condom law promoted by AIDS Healthcare Foundation, which Los Angeles County doesn’t even want to enforce, as well as the current lawsuit against the federal record-keeping and labeling law, 18 U.S.C. §2257. “Measure B is this tragic example of an obsessive man’s crusade, so misplaced under the guise of healthcare of adult performers—it has nothing to do with that; regulating an industry out of control that’s not out of control; it has nothing to do with that, and it’s really vigilantism,” Holland concluded. “It’s a personal obsession on his part that he can’t put down and it’s irrational. So it has driven the industry to a point, in the city of L.A. through Measure B, to going underground, which in fact has now brought about exactly what he would tell you rhetorically is his concern. So now you have an industry that is shooting underground in L.A., they’re not getting film permits—I think film permits were down by like 80, 85 percent, 90 percent, and we have lots of runaway production, and that’s affecting the healthcare and safety of our performers and our crew in the adult industry. When you have them shooting off-permit, then they’re less likely to carry production insurance, because it was the permitting process that required them to carry production insurance. When they don’t carry production insurance, then you have exposure that goes along with that, and you start to slowly deconstruct all the infrastructure that has been built underneath production for the last 15 years. “When I first came into this industry, my first movie that I directed was for a big company, a company that I still respect and still admire the person that owns it, Steve Hirsch of Vivid Video,” she explained. “I came in to do a movie and I was coming from independent mainstream production, where we sort of did everything by the book and I said, ‘Okay, we need to pull a permit.’ And they said, ‘What?’ And I said, ‘Yeah, and we’re going to need production insurance.’ ‘What?’ I said, ‘Yeah,’ and they said, ‘Well, we don’t do any of that.’ And I said ‘Well, you’re going to have to start it now. It’s a modest cost, a few hundred dollars, four percent of your production budget, but you’re going to like have to come out of the closet and into the sunshine because if you’re going to be a mainstream player and an aboveboard business, you have to act aboveboard; you have to play the game the way we play up here,’ and that started that process with Vivid, and every company I’ve worked with, every company I’ve owned that’s done production has always carried production insurance, gotten permits, done everything by the book. Why? Because why would we not? Why would we apologize? Why would we hide in the shadows? Why would we run this industry as if we’re renegades who have something to hide? We don’t. We’re a sector of the entertainment industry and we have to operate like that. “Now, you have this fanatic who has pushed the industry back into the shadows, kicking and screaming, and now you have a lot of people who are operating off the grid without the infrastructure, and when you stop getting production insurance and you stop getting permits, the next step is, it’s really easy when the girl shows up and says, ‘Oh, my test is like two days expired,’ and everybody looks at everybody else and goes, ‘Ah, that’s okay.’ Because if you start to let things fray around the edges, it starts to collapse. There’s a great line out of Fear of the Walking Dead, where the kid says, ‘When society and civilization start to unravel, the whole thing collapses faster than you think.’ So this fanatic, this vigilante, this obsessive conservative has pushed this industry into a much less safe position for its performers and its crew than where he entered the picture. I think it’s ironic and I think it’s so counterintuitive that in 2015-16, we’re still on this kick, and I tell you the new measure he’s floating is preposterous; it’s a thousand things that would never pass muster when challenged in court, and I would like to see him now apply some of the demands that he’s embedded in this outrageous measure—now go sell it to HBO and Showtime and Dish and Direct, because now he wants to hold them accountable for airing things. Now go play with the big boys and see how it works out. It’s one thing when you come and try to beat us up; we’re an easy target because it’s so easy to paint us with the pornography brush. Now try to go impose those regulations on Direct and Dish and Time-Warner and Comcast and the broadcasters like HBO and Showtime who use our cut-down softcore versions as programming, and he wants to make all those groups liable. So he’s a very unfortunate and unhappy individual, and I hope he finds peace somewhere in this universe or a parallel one, but preferably a parallel one so we can all move on and do what we do.” Holland’s thoughts on 2257 were equally insightful and direct. “The 2257 situation has been absurd from the beginning, because of course, 2257 was the outgrowth of the Traci Lords experience, and nothing about 2257 could have ever prevented Traci Lords because she worked on a fake ID that was a good fake ID,” Holland stated. “So this entire hundreds of millions of dollars of apparatus and record-keeping that has grown up around this industry, has all at the end of the day not addressed the underlying issue that provoked it originally. “You know, Bang Bros, two or three years ago, had a 15-year-old that worked for them on a phony ID. They ultimately were not prosecuted and they ultimately would pay the family to, you know, ‘everybody calm down,’ but the same thing happened: the girl had a good fake ID. You could argue that somebody might have looked at her and went, ‘Whoa, she looks young; maybe we should check again,’ but nothing about 2257 can prevent the underlying cause of what 2257 is there to ostensibly protect against. So there needs to be mechanisms, there needs to be safeguards in place; no one would deny that, and the business and the industry is highly respectful of that, and when you get into the bigger companies who operate inside this environment, adhering to all the regulations and are highly sensitive to any accusation of exploiting underage girls or people, I think everybody takes that very, very seriously. That said, 2257 does not address the problem and there are much simpler regs that could be put in place that would.” The latest development in the Penthouse saga, of course, was the recent announcement of a Penthouse digital edition, which will be offered free to print subscribers and available to anyone for a fee. “We have some interesting, cutting-edge technology for digital print,” Holland noted. “Our digital publication is going to be really interactive, and we’re really excited about that, and we’re working on that, but saying that we’re launching digital is not to imply that we’re suspending the print publication. I think announcing that we’re launching digital coupled with the fact that we’re moving our print operations from New York to Los Angeles was somehow an easy suggestion that we’re closing print, but we absolutely are not.” Penthouse Digital will feature embedded videos and moving .gifs, and will allow Penthouse to interface more with social media and have more feedback from fans and subscribers. “This is a perfect moment to be continuing on with print, because now, frankly, by default, we own the space, thanks to—I won’t question my competitor’s decision to take nudity out of their magazine as a response to free porn; however, I am not in agreement with that position. I think that’s a very wrong analysis of the marketplace and a very wrong analysis of brand and the positioning of the magazine, so we are happy, we are applauding The Bunny in that decision, and we are happy to occupy the space they are vacating.”