The Pornhub saga shows how market forces can lead to beneficial changes

Topics porn | child pornography

The ongoing saga of Pornhub holds many lessons for online entrepreneurs. The latest developments indicate how a free media and market forces can, in conjunction, lead to beneficial changes. In the early 2000s, a gang of four young college-mates decided to monetise their shared interest in adult entertainment.

These four graduates of Concordia, Montreal, launched three audio-visual sites, Pornhub, Red Tube and YouPorn. They also incorporated multiple entities to create adult content. All these properties are owned by a privately-held company, MindGeek. MindGeek is incorporated in the Duchy of Luxembourg, which makes it a European Union entity. But the multi-national company is headquartered in Montreal with over 1,200 employees worldwide.

Pornhub adopted the YouTube (YT) model, though the content was more focussed. Basic access was free, and content could be uploaded by anybody. There were also premium options, where users could subscribe to premium channels. Revenue came through banner ads, and subscriptions.

This dramatically disrupted the adult entertainment industry. Like YT, those three sites became aggregators of millions of videos cross-indexed in multiple ways, making them easily searchable. Uploaders whose content proved popular became stars. The adult content generated by other MindGeek companies also found a platform.

The earlier business model for adult entertainment was heavily skewed in favour of studios, which hired actors who were paid a one-time fee. Unlike in the conventional entertainment industry, adult performers received no royalties, even if the content they created sold millions of times.

Pornhub changed that paradigm. While some stars complained about copyright violations as their content was uploaded without consent, others found ways to generate revenues from the new model. Many also learnt to leverage and monetise other social media models.

The New York Times recently carried a piece, which alleged citing evidence, that Pornhub content included under-age and non-consensual performers. It also alleged there was violent content. As a result, credit card majors, Visa and Mastercard cut off services to MindGeek, pending investigation. American Express does not, on principle, service adult entertainment businesses. PayPal has also stopped processing payments. So this revenue stream dried up. MindGeek was also hit by a lawsuit by 40 women who allege it had profited from a sex-trafficking ring run by a content creator.

The response to the financial squeeze was instant. Pornhub promptly removed all content created by unverified users — that’s over 80 per cent of all the content it was hosting. Independent assessments said that over 10 million videos were removed overnight.

MindGeek also said it was going to put in a system of rigorous user-verification and age-verification to prevent illegal content being uploaded anywhere on its sites, in future. In a statement, it claimed, “This means every piece of content is from verified uploaders, a requirement that platforms like Facebook, Instagram, TikTok, YouTube, Snapchat and Twitter have yet to institute“.

This is true. Of course, the paradigms are very different since Twitter, Facebook, YouTube, et al, all carry tons of anonymous content from anonymous users, which various authoritarian governments consider subversive. Also, the revenue models are different in most cases.

It is a remarkable example of how reportage from free media can trigger a healthy market response, and how a company can be pushed into instituting more ethical business practices as a result. It’s a different matter that this comes late in the day — Pornhub has been running since 2007.

Porn has been at the cutting edge of technology, from Gutenberg to social media. Adult entertainment is a big, big industry. In 2019, Pornhub alone claimed 42 billion visits — 115 million per day — with 6.83 million new video uploads. Visitors from India ranked #15 on the site, even though Pornhub is banned in India. (Many more desis would have used VPNs, with their visits registering as coming from elsewhere.)

It’s a pity India bought into the mealy-mouthed Victorian hypocrisy of our erstwhile British overlords, given our glorious millennia-old traditions of creating adult content. India could easily be a world leader, with our heritage properties that already attract tourists (that’s a category on Pornhub by the way), our tech-savvy, young population and our huge movie industry.


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