After experiencing success with the Sodomania line of movies, Collins split Elegant Angel off into its own independent label in The company began to find its true creative groove in , when Collins opted to revamp the style and approach of the studio. It was in this era that Elegant introduced the streamlined, modernized look that has become its calling card.
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The two labels soon became a pioneer of Gonzo pornography, along with other producers such as Rodney Moore and Ed Powers. Stagliano had pioneered the Gonzo genre in the late s. In , Collins established Elegant Angel as a separate company, and in it ended all cooperation with Evil Angel. Lazzaretto and wounded two others at the company's warehouse in Chatsworth. In the company attempted to switch from Gonzo to producing "Feature" films. However, by early it was clear the change had proved "unsuccessful and costly", according to General Manager Graham Travis. In order to resolve its problems the studio stopped production for two months. In August the company opposed calls from Democratic California Assembly member Paul Koretz for the adult industry to use condoms.
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