An Inside Look at the Celebrity Sex Tape Industry

In the season finale Monday of her reality show, "Kendra," former Playboy Playmate Kendra Wilkinson reacted to the release last month of a sex tape that -- apparently to her surprise -- she starred in.

"It just sucks," Wilkinson said on the show. "It's the hardest thing to deal with right now. It's going to be really hard. It's going to probably be the hardest time of our lives."

Surprise: Youre a Sex Tape StarPlay
Inside Celeb Sex Tape Industry

Wilkinson said she was furious.

"I just hope to God nobody looks at me like a porn star," she said on her show. "I just hope they don't press 'play,' because that's not me. I mean, that was me, but that's not me now."

Released on May 26, the video is already breaking sales records, according to distributor Vivid Entertainment. Which proves once again that in an era where the public's appetite for all things celebrity seems insatiable, nothing, it seems, is off limits.

VIDEO: Adult film company sends Kendra Wilkinson $680,000 for a yet-to-be-released sex tape.Play
Kendra Wilkinson's Big Payday for Sex Tape

That includes the barest of celebrity commodities, a phenomenon so widespread it's now commonly known as the "celebrity sex tape."

Whether the stars of the tapes are socialites or reality stars, musicians or actors, the sex tape business -- which by all appearances is based on videos released against a person's will -- is actually strategically and shrewdly run, and thriving.

'It's Still Selling'

David Joseph is the president of Red Light District, the company that put out the mother of all celebrity sex tapes, featuring socialite Paris Hilton.

"One Night in Paris," he told "Nightline," has shown staying power.

"It's still selling," Joseph said. He said he knew, the second he saw it that sales would be off the charts.

"At first I was afraid of the Hilton family, and I heard at one point Donald Trump was really upset about it because he knows the family really well, and he was going to get involved and do whatever it took to stop it," said Joseph. "And so, yes, it definitely crossed my mind and I had to be very careful on how this was dealt with."

Celeb Sex Tapes: Agents, Managers and More

Roughly $20 million in sales later, Joseph has become an expert in the process of securing and distributing celebrity sex tapes. The DVDs fill the boxes of Red Light's warehouse and make up the most profitable arm of the distributor's porn empire.

"Usually what happens is you will be approached by an agent, a manager of a celebrity or a boyfriend who did it with a celebrity," Joseph explained. "Usually it's a girl, sometimes it's a guy. But mostly it's a female. And it's never normally the actual female. It's an agent that approaches the adult companies."

Odds are the agent is a man named Kevin Blatt. And he isn't shy about his business.

"I don't distribute DVDs, I don't own a website. I'm just an information broker," Blatt told "Nightline." "In most cases, I'm like a porn version of Robin Hood. I take tapes sometimes that shouldn't be on the marketplace and I make sure they go back to their rightful owners."

Of course he plays the other side, too -- brokering deals to get tapes like the Paris Hilton phenomenon out to the public.

"Paris Hilton, when that tape crossed my lap, I had no idea who she was," said Blatt. "I was just told she was a socialite, heir of the Hilton family fortune and hotel chain. Had no idea that she was going to become this big of a star. For all intents and purposes, Paris Hilton and Kim Kardashian are the two biggest porn stars on the planet.

"They would probably beg to differ with [that]..."

Personal Crisis -- or Career Boost?

In the case of Hilton and Kim Kardashian, Blatt insisted the sex tapes catapulted their careers to a whole new level.

For others, Blatt says, the release of a sex tape is no accident, but a strategic move to revive the career of a celebrity who's fallen out of the limelight.

Blatt listed careers that had been helped by sex tapes. "Paris, Kim Kardashian, Dustin Diamond, Chyna the wrestler, Tom Sizemore, Amy Fisher..." he said. "God, the list... Shauna Sand, the list goes on and on. At the end of the day, you ask me a very good question. How do these make or break celebrities? I have never, in my 14 years of being in this industry, seen an instance where anybody has ever had anything negative happen as a result of a sex tape. The publicity has only been positive.

"We can talk about Chyna the wrestler that we put out. Her career was pretty much, nothing was going on. The tape comes out, she's in the tabloids again, talking about it on the news, she's on Howard Stern. And it got her back out there again. ..."

We asked Joseph about the idea of having to bare all to reignite a career. Isn't that sort of a crazy strategy?

"You know, if you're a celebrity, you like the spotlight, you like that, and you miss it and you're craving it and you want to be on television," said Joseph. "Is it really?"

Comedian Chelsea Handler says her sex tape was made as a joke -- nothing more. She talked about it on her late-night show. "Someone called and offered me a million dollars for it," she said. "I said I'm not worth it."

But Blatt said Handler's tape is a perfect example of a naughty video energizing a career.

"I'm not saying it's all thanks to her sex tape," Blatt said. "She's an accomplished comedienne. What I'm saying is, now she's crossed over, and now she's got a whole different marketplace that knows who she is as a result of her sex tape. Now guys know who she is."

We spoke with Steve Hirsch of Vivid Entertainment, the other industry leader. Vivid released the Kim Kardashian video and even reached back in time to release a Jimi Hendrix video.

Hirsch said a new offer crosses his desk "every single day" and that he's always looking for the next big thing. He said he's been offered a possible Tiger Woods tape.

"We did see 30 seconds of something that we thought might be him, but we could never really confirm that it was him, that we just passed on that," Hirsch said.

Celeb Sex Tapes: 'Buyer's Remorse'

It's a strange business to say the least.

Some celebs, such as musician Kid Rock and actor Colin Farrell, have sued successfully to keep tapes private.

Other cases have played out very differently.

Vivid just released a video featuring country music singer Mindy McCready.

But McCready told "Nightline" the release was over her objections and she doesn't want it out.

"Well, in Mindy's case, she signed something that says she agrees that she had made this tape and that she was turning over the rights," Hirsch said. "Buyer's remorse."

But if she decides she doesn't want the tape out there, doesn't Vivid have some moral obligation to withdraw it?

"I don't think so, because at the time that she made it, she signed a model release, she was OK with this footage being distributed," said Hirsch. "We did that, we bought it from a third party, we were sure that all of our paperwork was in order."

Blatt said it's par for the course in a very litigious and very profitable business. He said McCready was "absolutely" a willing participant in the tape's release, whether she admitted it or not.

"Absolutely. Absolutely," Blatt said. "And if that's not true, Mindy, come sue me next. I mean that's just the bottom line. I mean look, I would love to sit here and perpetuate and keep these things going. But at the end of the day, I think the general public's [going to] start to get hip to what's going on."

Just weeks after the tape's release, McCready was hospitalized for an apparent drug overdose.

So what does this say about the entertainment-consuming public that craves every moment of a celebrity's life -- and even rewards them for shedding their last morsel of privacy?

We asked Hirsch if he was ever surprised that people seem to videotape so much of their sex lives, and then have the tapes floating around out there for people to try to sell.

"We live in a time where everybody has a video camera, so no, it's not surprising to me that people experiment with that," Hirsch said. "I think for the most part people [keep their videos locked away].

"But for those few that don't -- we're here for them!"