2. Porn 2.0 & Market Hxstory
How Did We Get Here?
In order to understand where to even start in digital pornographic research, and how to interpret our data, we need to clarify the origins of the sites & companies that we're investigating. PornHub currently holds some of the largest economic stakes in porn & advertising markets in the world--but how did this come to be?
The critical shift we need to understand for the purposes of this research is that of "Porn 1.0" to "Porn 2.0." This change really occurred in the early 2000s, and is more largely defined by an alteration of those who ran the market, rather than by a moving of the spaces of consumption. While the "Porn 1.0" market was generally owned by studios & distributers (creating magazines, DVDs, etc.), Porn "2.0" was owned by tech bros, and brought streaming and ad-based commission to the forefront. Tech entrepreneurs and developer specializing in ad-click monetizing entered the porn market purely because they saw a clear monetizing route for their software. Porn was simply a vessel with which to draw clicks in a largely untapped ad market.
Ads, Clicks, and NATS
Mindgeek is a company you probably have never heard of--but it basically runs the internet porn economy.¹ The story of how a seemingly unknown company came to monopolize adult-media revolves around Fabian Thylmann, a German software entrepreneur. the original founder of Manwin, a company which would later buy the original PornHub website before eventually becoming Mindgeek, the current owner of the modern PornHub.
Thylmann made his money by developing click-tracking tools for advertisements in the 90s to generate paid commissions. This included the very successful NATS (Next-Generation Administration and Tracking System) which helped generate a great amount of his wealth. Thylmann took this money and proceeded to buy various internet porn companies and embedding his software throughout the 2000s, until eventually acquiring some of the largest in the world in 2010—Pornhub (original), YouPorn, RedTube, Brazzers, Twistsy, and Mofos. This tactic of large multinational acquisitions united under one ad-affiliate tracking system is what made Mindgeek so powerful.
But Thylmann wasn't exactly operating in the clear. In 2012 he was extradited from Belgium² to Germany for suspicion of tax evasion, which led him to (allegedly, by mere coincidence) then sell Manwin in 2013, only to be then indicted again in Germany in 2015 on more tax evasion charges (which were dropped after a 5 million euro payment, but are still under investigation).
So who bought Manwin? We have to shift over to Canada, where Feras Antoon and David Tassillo had been building porn sites since the early 2000s like Brazzers. They acquired ManWin in 2013 to create MindGeek. And yet they also ran into trouble, as in 2016 the Canadian government issued search warrants under suspicion of insider trading.
The point of highlighting this fairly shady (although not exactly uncommon in the tech industry's network of corporate-veils) story of tech-turned-quasi-legitimate-business to is to point out a sort of mafia-esque monopoly of men in tech that profit the most from porn. MindGeek, through a lack of regulation in transnational business and sketchy practices, has created a monopoly that is near impossible to compete against. To me, understanding this position helps provide a better lens through which to critique the porn economy--as an issue of ownership & failed regulation, not simply as content or consumption deserving of judgement.
Interactive Corporate Timeline
The hxstory of the company is complex and scattered, but from a ton of internet scouring I've managed to put together a timeline that can hopefully clarify some of the major corporate changes, product additions, and acquisitions. This info is notoriously difficult to find, but I've done my best to compile & corroborate as much of this obfuscated hxstory as possible.
Primary Economies
Porn 2.0 brought about an explosion of highly unregulated, but not illegal, sub-economies in the porn world. While Porn 1.0 had a relatively stabile chain of performers, studios, and then distributors selling to consumers--2.0 completely reshaped the process of creation to consumption. Performers could self-produce, studios could self-release or sign deals directly with larger sites, distributors either formed digital entities or were completely annihilated by aggregator sites, and the consumer stopped even having to necessarily pay for porn. Paid downloads still profited, but most revenue began to come from ads & subscription fees--and performers started balancing these more direct payments with free streaming payments (paid directly from websites like PornHub). This shift largely happened over the course of a single decade, and it completely changed the models of production.
PornHub exists as one of the only large-scale porn site that offers this monetized streaming system (starting as early as 2013), in which performers are paid around 60 cents on average per-1000 free streams (an "RPM" model like on YouTub or Spotify). This economy has become the dominant in porn, although it usually only acts as a supplement to performer's income--or simply to drive clicks towards their paid content and subscriptions (of which PornHub takes anywhere from 35-20% depending on content). Xhamster, for example is moving to offer this, but at the moment only offers users a spot to place their banners for personal sites (in which they can run their own ads). While the numbers are not clear, it is generally understood that stream-based revenue alone cannot support producers unless they exist in the absolute highest tiers of popularity (similar to the economic realities of music producers).
In this sense, sites like PornHub have created a loop that benefits themselves and devalues performers & producers, all while using a relatively unsubstantiated concept of providing increased freedoms for more creators to individually profit.³ Because they hold a monopoly on porn (in the sense that no other site can even come close to competing with their more than four million videos), producers must publicize themselves on the service in order to draw viewership. But given the swath of free content, they must produce a constant amount of popular free content to draw people in towards their paid media. If there simply wasn't all this free porn, and wasn't a need to climb the stats on a free site, they would not have to put anything up for free. The amount of essentially unpaid work that goes into maintaining this free section that makes them so little money it may even end up negating the earnings from paid content they can drive from increased traffic to their profiles.⁴
That is the current reality of the Porn 2.0 economy--and it is shares eerily similar contradictions with almost every major media streaming platform in the world.
Sub-Economies
But here's where things get really interesting, and more unique: the affiliate market. This hxstory is particularly critical for understanding why we actually have public access to so much data--it's the reason most of this project is even possible. In the next section, we'll use databases known as "Embed Dumps" to grab significant publicly available data--these are accessible not out of a desire for transparency, but out of an economic imperative core to the porn economy.
Content Affiliate/Referral programs are the driver that allows for porn monopolies to maintain algorithmic dominance & thrive. It creates an economic opportunity for anyone who can spin up a basic website and capture traffic. Via what I call "porn shell-sites" one can earn money not only through ads on pages but through payment from PornHub by embedding videos on their site. In this situation, while PornHub still runs their own ads in the videos, and these streams count towards producer payments, the shell-site owner is able to instantly host millions of videos, and earn money for every click that sends users over to PornHub's site. In this sub-economy, people do not need to make any content, or sign any deals, they simply need to embed PornHub's content and draw clicks.
This sub-economy gives random mildly tech-savvy humans an economic incentive to pollinate the internet with PornHub content and improve PornHub's SEO. It also seems to a sort of "leaning in" to the problem of piracy that PornHub faces. It's similar to the music industry shifting to streaming to essentially cut their losses from illegal torrenting and downloading by turning to ads. In the past, to create an aggregate site, one would actually rip the videos from porn sites and then re-host that media, taking all the money for any ads on the new site. But because of affiliate embed systems, both the new site and the original hosting site (PornHub) can still make revenue.
So, for example, if I just make a site called pornhub.cum instead, and just throw a search bar in there that references the embed dump, I can get advertising from the site clicks and pop ups, and Pornhub gets money from the video plays and embedded ads.
The irony is that plenty of PornHub's content is actually pirated from other site. While they can shut down verified accounts that are pirating, unverified accounts can easily spring up and re-upload. That being said, only verified accounts can actually make money via PornHub from content, so in this case PornHub is the only party actually winning, since they can pull ad revenue and clicks from any videos on the site--and simply wait to see if they ever receive a takedown notice to remove the video. On the other hand, PornHub commonly issues takedown notices to any sites pirating their "exclusive" content. Performers can opt in for this protect by giving the site full & exclusive rights to their uploads in order to gain a measly 5% increase in per-1000 (RPM) streaming payouts (that's something they don't advertise until you're mid-upload). PornHub then adds “digital fingerprints” in order to track the video across the web. We'll get into the privacy concerns about all this later.
Clicks vs Streams
I've generated a map of the affiliate click pay-scale used by HubTraffic. Values are based on country of origin and device. Here, you can explore desktop click values across the globe. To me, this map points to a dominated western ownership of digital sexuality. Money defines digital sex, and the market is near completely focused on western countries. As bans started in Russia, China, India, and the Philippines, this map has only become more and more clearly focused on wealthy, white countries.
Note: Interestingly, despite the majority of porn viewership existing on mobile devices, desktop clicks are still worth the most. This may be due to the increased physical ad space available on desktops, or the quality of viewership, but it is rather unclear.
- Neubecker-Slate, R. (2016, July 12). How a (Canadian-founded) Company You've Never Heard of Took Control of the Porn Industry. National Post.
- Paterson, T. (2012, December 12). Fabian Thylmann, 'the ruler in the Realms of Lust', is Arrested For Alleged Tax Evasion. Independent.
- Ronson, J. (2017). The Butterfly Effect. Podcast: Audible.
- Bisley, A. (2017, October 6). How Free Porn Enriched the Tech Industry - and Ruined the Lives of Actors. Vox.