Horrible men like Larry Flynt and Al Goldstein knew us better than we knew ourselves: Down deep we did have a strong desire for pornography, though even the smut peddlers couldn’t have imagined they’d live to see the day when the predominant medium of the era would allow for the ubiquitous access to videos and live acts of hardcore sex, “a thousand variations, every service with a smile,” as the song said.

The thing is, it would seem impossible for those producing the content to make a buck, but an usual detente between the mongers and aggregators have allowed all sides to surprisingly profit since the old model was disrupted, a reinvention most mainstream media companies have yet to master. An explanation from the resident wankers at the Economist:

With most porn on the internet now free and easy to find, the number of adult sites, and traffic to them, have exploded. The web boasts an estimated 700m-800m individual porn pages, three-fifths in America. PornHub, Mindgeek’s biggest tube, claims to have had nearly 80 billion video viewings last year, and more than 18 billion visits (see chart). In terms of traffic and bandwidth, Mindgeek is now one of the world’s biggest online operators in any industry. The company says its sites serve more than 100m visitors a day, consuming 1.5 terabits of data per second—enough to download 150 feature films.

Earlier than other parts of the online world, porn discovered that traffic and data are the coin of the digital realm. Tsunami-like traffic became the basis for a new business model. The list sites of the web’s early days sold clicks on their sites to traffic brokers, which redirected visitors to pay sites. If one ended up subscribing, the pay site would give the broker a fixed fee or a share of the revenue. Next-Generation Affiliate Tracking Software, known as NATS, which Mr Thylmann developed in the 1990s, was best at monitoring traffic and ensuring that it was paid for. Mindgeek now uses the data it collects to refine ad placement: TrafficJunky, its online advertising network, delivers highly targeted ads, for instance to mobile devices owned by gay people in San Francisco.

Beyond explicit

The traffic the tubes can direct towards pay sites means that their relationship has evolved from hostility to close, if grudging, co-operation. More and more content producers are signing deals to let their stuff appear on tubes: if a viewer clicks through to the originating site and subscribes, the tube will get a cut, sometimes as much as 50%. Since tubes get so many visitors, the bargain may be worthwhile for pay sites even if only one in 1,000 of them decides to subscribe. But the tubes are by far the bigger winners, getting not only commissions but more videos, which in turn drive up their traffic and ad rates. The model has been likened to a “vampiric ecosystem” in which Mindgeek and the other tube sites feed on pay sites, sucking their profitability.

All this will sound painfully familiar to other media firms. Echoing the aggregation deals struck by the tubes with commercial porn producers, social-media sites are starting not just to link to content, but to host it. Snapchat, a messaging app that lets users send each other photos and videos that vanish after a few seconds, allows news outlets to publish articles on its service in return for a share of advertising revenue. Facebook is doing something similar with its Instant Articles service. Indeed, Facebook, Twitter and their like have essentially evolved into traffic-brokers. Many of the clicks they pass on come from links posted by users. But the number of ads, promoted posts and suchlike is growing.•