One market that's not suffering: escapism. While other publishers founder, Harlequin is way up, taking full advantage of ebooks and internet advertising and launching a short erotic efiction line called Spice Briefs. [PW]
When I was a kid I used to steal my stepmom's Laverle Spencer books. She disguises some pretty graphic sex (complete with 'heaving bosoms' and 'engorged members' as being a 'romance'. I learned a lot from her.
A guy friend of mine had an old male romance novel in his house (what would they be called, exactly?). It was your standard run of the mill harlequin type novel, but geared towards men. I read it cover to cover, laughing all the while.