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The history of pornography in Hungary mainly dates from the period after the fall of communism in 1989. The production and distribution of pornography was illegal under communism, but the laws were liberalised with the emergence of democracy. Permissive government policies soon propelled the country to the forefront of the European pornography industry. Several foreign directors were attracted to the country's liberal legislation, cheap production costs and large supply of attractive female performers. Eventually, domestic producers began to prosper as well, and several actresses made big names for themselves within the industry.
During the communist era, pornography was considered a product of Western decadence, and was illegal. From the 1960s to the 1980s, however, experiments with market economy – the so-called Goulash Communism – left the Hungarian state saddled with great foreign debts. After the fall of communism in 1989, the government was eager to find new ways of producing revenues. A post-communist constitution was introduced with no ban on pornography, and this industry presented a welcome economic opportunity. The nation's capital of Budapest in particular offered a favourable combination of "camera-compatible women, laissez-faire government regulation, fin-de-siècle scenery, and low production costs."
The venture was highly successful, and Hungary soon became one of the world's leading manufacturers of pornography. In the popular imagination, the country has become closely associated with pornography, and the satirical newspaper The Onion in 2007 jokingly asserted that 70% of the country's population was involved in the industry. Though not so extreme, the industry is certainly central to Hungarian society and economy, relative to other countries. By 2005, 300 of the 1,200 pornographic films produced in Europe were of Hungarian origin. In 2008, the industry generated around € 636 million a year, making up around 0.5% of the country's GDP. The government sanction also secured a much more legitimate standard for the industry than in many other countries. Hungarian pornography has mostly been free from association with such social problems as organised crime and human trafficking. The well-organised nature of the business has also helped prevent the spread of HIV, which has a very low prevalence in the country generally.
Pornography produced in Hungary is distinctive from the more ubiquitous American pornography in several ways. The relatively poor economic conditions in the country force many young girls from the provinces to seek their fortune in the capital. This provides a constant supply of female performers with the desired qualities for the business. As the highly successful performer Mya Diamond says: "I come from a small village. I wanted to flee poverty and help my brothers and my mother financially." This results in women appearing much more natural than their American counterparts, with the absence of most forms of body modification, like surgical enhancement, tattoos or piercings.
Another consequence of the socio-economic conditions is that performers are more desperate to succeed, and therefore willing to engage in extreme types of sexual intercourse. Various forms of multiple penetration – still relatively uncommon in American pornography – are commonplace in Hungarian films. The act of anal sex has become closely associated with pornography produced in Hungary, to the point where it is now considered a "signature" of movies from this country.
The pioneers within the Hungarian pornography industry were foreign producers who were attracted to the country because of the favourable economic conditions and the steady supply of beautiful girls. The French actor and director Christoph Clark claims to have been the first, when he moved to Budapest as early as 1991. In 1993 the Italian Rocco Siffredi started making movies in Hungary, and was soon followed by others, such as Pierre Woodman and Patrick Collins. With time, local producers started to emerge and compete on the market. Hungarian director and producer István Kovács – known as Kovi – is the head of LUXx, the country's largest pornography production company.
Initially, female performers were relatively anonymous; they were identified only by first name and normally used only for a few movies. The production companies wanted to avoid name recognition, in order to keep wages at a low level. Gradually, however, certain performers started to emerge as stars with a following among viewers. Because of the international distribution of films shot in Hungary, most performers choose internationally sounding screen names, such as Nikki Anderson (Swedish), Monique Covét (French) or Michelle Wild (English). Wild, whose real name is Katalin Vad, managed to cross over into mainstream stardom, and became an actress on the television soap opera Jóban rosszban.