The following profile appeared in the October
9th 2004 issue of The
Face Value | Well Endowed
Phil Harvey sells sexual excitement to the rich, then helps the poor
STROLL down the dusty streets of Awasa,
a town in southern Ethiopia, and you might find a billboard advertising
condoms with the catchy slogan: “Value your life! Superior protection.” Were
you driving along a highway in Toronto, Canada, you might have seen
another poster, this one showing a middle-aged woman peering down
into her husband's glowing boxer shorts with the cheery message: “Put
a party in your pants!” The sexual pleasures of the rich may
seem a far cry from the family-planning and AIDS-prevention problems
of the African poor. But both the ads and the products they promote
are intimately connected through Phil Harvey.
Mr Harvey is both one of the world's leading
purveyors of “adult
entertainment” and a big supplier of contraceptives to the
developing world. His PHE group, which includes Adam & Eve, America's
biggest mail-order and online retailer of sexual toys and pornographic
films, is a market leader in an industry which some estimate to be
worth more than $10 billion a year. Yet as president of DKT International,
he also leads a non-profit group that specialises in distributing
condoms, pills and other forms of birth control in some of the poorest
parts of the world.
With his penchant for a tweed jacket and
tortoiseshell glasses, Mr Harvey can look more like an academic
than a sex magnate. Perhaps this is not surprising, given his firm's
origins. In the late 1960s, he studied at the University of North
Carolina with Tim Black, now head of Marie Stopes International,
a reproductive-health agency. They both did masters degrees on
non-medical ways of promoting family planning: in particular, they
sold condoms to students through the post, even though marketing
such “obscene” items by mail
was illegal at the time. They decided to try similar techniques in
the developing world and pioneered Population Services International
(PSI), which is now the world's biggest organisation for so-called “social
marketing”. This involves using commercial techniques to persuade
people to do something that is good for them. Mr Harvey founded DKT
in 1989 to work along similar lines—in this case providing
contraceptives at knock-down prices, with the help of subsidies from
governments and private foundations.
Adam & Eve, which grew out of Mr Harvey's mail-order condom
business, sells some $70m-worth of films and goods a year—including
such products as the Scorpion Double-Shaft Probe (don't ask) and
the Pussy Enhancer. It has its own brand of sex toys and spends around
$2.5m annually making some 75 pornographic movies, including notable
hits such as “Rawhide” and “Stud Hunters: A Hard
Man is Good to Find”. The firm sends its videos and books to
licensed sex therapists for review and, says Mr Harvey, anything
that smacks of coercion gets “zapped”.
The success of Adam & Eve helps Mr Harvey's philanthropy. He
ploughs around $2m of his annual profits from the company into DKT.
With a total budget of $31m, DKT distributed 348m condoms and 29m
oral contraceptives in Africa, Asia and Latin America last year.
DKT does this with a keen eye for branding and advertising, using
any available channel, from pharmacies and kiosks to brothels and
bars, to get products to people. Mr Harvey says that rather than
donating contraceptives it is better to market and sell them—even
if only for pennies. This brings lots of shopkeepers and others into
the distribution network, and it also means customers are more likely
to value—and therefore use properly—something they have
Few Adam & Eve customers realise that
a proportion of their spending goes to promoting contraception
in poor countries. The company once made the link in its marketing,
but says it did not make any difference to sales. The philanthropic
connection does motivate some employees, however. Indeed, for all
the sex toys on desks and steamy posters on the wall, there is
a strangely un-erotic atmosphere at the firm's headquarters, located
beside an old-people's home in suburban North Carolina; even The
Economist's offices seem more sexually charged.
Selling sex is becoming a tougher proposition
and Adam & Eve
has seen its sales flatten in the past three years. The business
is also changing, along with buyers. A third of the company's 4m
customers are now women, up from about a fifth five years ago. To
tempt them, Adam & Eve has introduced home “Temptations
Parties”—a bit like Tupperware nights, only with vibrators.
It is also exploring the idea of franchising branded stores.
Liberty and the pursuit of happiness
The biggest challenge facing Mr Harvey's
adult-entertainment business is, in part, of his own making: the
emergence of new competitors. He is famously libertarian and has
long fought against censorship. His first big battle came in the
1980s when the Department of Justice raided Adam & Eve and
prosecuted the firm in several states for selling obscene material.
Mr Harvey spent eight years both defending himself and suing the
federal government for harassment and violation of free speech.
In this way he helped to win the adult entertainment business more
freedom, which has been good not only for him, but also for his
competitors, although prosecutions in the industry go on.
Now another sort of battle looms. The public-health
side of Mr Harvey's business has become more controversial because
of the Bush administration's conservative views on sex and condoms.
Last year Mr Harvey resigned from PSI's board after a flap broke
out over his presence on a body that was in receipt of substantial
government overseas-aid contracts. He laments that newly illiberal
policies are “increasing contempt
for America abroad”. And he has broadened the scope of his
fight for free speech and individual choice. Another of his targets
is America's war on drugs, a conflict he says represents a greater
threat to civil liberty than the war on terror. Might a mail-order
cannabis business be next on his list of ideas?