An Inside Look at the Celebrity Sex Tape Industry

"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."

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