It is a great strategic move for ChiChi! The purchase will give her control of one of the largest libraries of gay content in the world. As VOD/PPV and other direct to consumer distribution channels become the norm, this offers a huge base for revenue generation for years to come.

She's the Ted Turner of Gay porn! ;-)

This is not the end of mergers and buy-outs within the industry. I know of several other larger studios that are quietly for sale at the right price. The industry is going through a consoldiation as the gap between old-line/offline producers and new world online oriented producers widens. This is a critical tipping point in the histroy of the industry and it's tipping towards multi-media savvy companies like ChiChi's.