Although we may rarely think about it in terms of business and profitability, one thing is certain – the pornographic industry is not just there to entertain the masses with excess testosterone, time, and a lack of imagination. It is an industry that has been generating millions of dollars in revenue for decades, with its global value estimated at $97 billion. The United States alone generates between 12 and 14 billion annually in the porn market, and approximately 35 percent of all downloads from the internet are related to pornography!
This incredibly high percentage is a good indicator of its strong influence in the digital world, as well as the reach that ensures high profitability for the industry in one way or another. If we were to translate those numbers to the media industry, we would be talking about a huge market for advertisers who want a piece of that multi-million viewership pie. Interestingly, online pornography accounts for about 20 percent of total e-commerce sales in the U.S., clearly showing that it is an industry that is one of the main players when it comes to online payments.
Dangerous Rejection from Card Issuers
Based on the latest available data, Xvideos collects as much as 2.9 billion monthly views, Pornhub 2.7 billion, and XNXX 2.4 billion. We could make an entire separate story about the list, considering that there are countless pornographic sites on the internet, many of which have better viewership than European national media, but let’s get back to the industry’s earnings.
Pornhub’s parent company is surprisingly profitable despite recent financial and reputational blows, according to internal projections reviewed by the Semafor portal, which provide a rare glimpse inside the company. Pornhub’s managers predicted earnings of several tens of millions of dollars despite MasterCard and Visa refusing to process payments for some websites, including Pornhub, with operating margins of around 27 percent in 2021 and nearly 30 percent in 2022. At least those estimates were shown to potential investors by Pornhub’s management in 2021. In comparison, Facebook, or Meta, had an operating margin of 25 percent in 2022.
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Rarely does an opportunity arise to buy a website that attracts more eyes than Amazon and TikTok. It is precisely because of such an opportunity that an investment fund called Ethical Capital was established – to take over MindGeek, which stands behind Pornhub and Brazzers in March.
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MindGeek, the company that owns Pornhub and other adult sites like Brazzers, was expected to turn a profit despite not attracting top advertisers, primarily due to its very low operating costs. However, the ban from Visa and MasterCard reduced expected earnings by as much as 40 percent in 2022. If the card giants start cooperating with MindGeek again, the company projects that its revenue in 2022 will be around 455 million dollars, which is still less than the 460 million dollars the company claimed to have earned in 2018.
Ethical Partner
These numbers come from presentations and internal reports that MindGeek (through an external company) showed to potential investors, i.e., acquirers when it was trying to attract a strategic partner and present itself as a good match. The investment group Ethical Capital Partners, established specifically for this acquisition, ultimately bought MindGeek in March this year. Pornhub remains the 12th most visited website in the world in June, according to the web traffic tracking tool SimilarWeb, which means that more than tracking content on Amazon, TikTok, and LinkedIn – people are watching porn.
When the purchase was announced, the executives of Ethical Capital, composed of lawyers, former police chiefs, and marijuana entrepreneurs, refused to disclose how much they paid for the company. The statement from the investment manager describes MindGeek as a ‘dynamic technology brand built on the foundations of trust, safety, and compliance,’ reported Semafor.
Legally and Responsibly
Without knowing the price at which MindGeek got new owners, it is impossible to say whether it was a good deal (in terms of profit) for Ethical Capital, but from a reputational and legal perspective, it is clear that it is a toxic asset. Do you see it as a flaw? Don’t forget what industry we are talking about! The toxicity of the asset could be the strongest selling point as it likely reduced the asking price, and one thing remains certain – huge viewership. Imagine how often an opportunity arises to buy a website that attracts more eyes than Amazon?
– Our pre-purchase reviews revealed that MindGeek operates legally and responsibly – said Derek Ogden, a partner at Ethical Capital Partners and former director of the Royal Canadian Mounted Police, in a press release.
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Porn stars and digital sex workers, whatever that means, have discovered that the subscription model is truly every entrepreneur’s wet dream and have started using the platform Only Fans to bypass MindGeek and all its sites.
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Despite promises of a security audit, a person working at Pornhub’s headquarters in Montreal told Semafor that absolutely everything is identical in their operations since the new owners took over the parent company, partly because many changes have already been made. At the end of 2020, Pornhub deleted all its unverified videos (previously anonymous users could upload content to the site) in response to the decision by Visa and MasterCard. This accounted for as much as two-thirds of the site’s total content library.
Dangerous Streaming
Streaming sites are the worst in the adult industry for both consumers and content creators due to poor age verification on free sites, ultimately leading to pornography bans in conservative states – and unearned revenue in some markets. Meanwhile, porn stars and digital sex workers (whatever that means) have discovered that the subscription model is truly every entrepreneur’s wet dream and have started using the well-known platform Only Fans, where they earn enviable ‘clean’ money. This is potentially a bigger blow to MindGeek and all its sites than any nationwide ban, which has prompted audiences to seek VPNs for fear of revealing the sad truth – that everyone watches porn. But with that, we haven’t even scratched the surface of legal entanglements.
Shocking Statistics
There are at least seven class-action lawsuits related to alleged child pornography and non-consensual content that could cost the company billions of dollars. Do you think such accusations are strange? Of course, you don’t, especially when we think about the kind of audience pornographic sites attract, of which there are more than 4.2 million worldwide. This means they account for as much as 12 percent of all sites on the internet, and 25 percent of searches on search engines are directed towards such sites. The most commonly observed age group consuming online pornography is 18 – 24-year-olds, with 77 percent of them reporting recent visits. This is an important statistic to consider when discussing the pornographic industry, as it provides insight into the industry’s marketing strategies and the potential impact it has on young adults – but perhaps not for long. Sadly, even nine percent of pornography users in the U.S. are children under the age of 12. This statistic is a shocking reminder of the prevalence of pornography among children in the U.S. and highlights the need for parents and teachers to be aware of the potential dangers of pornography and to take steps to protect children from its influence. It also serves as a reminder of the need for further research into the effects of pornography on children and adolescents, as well as the need for more effective measures to prevent children’s access to pornography, because, no matter how much we think that the American situation will not replicate in Europe, think again about when that has not happened.
TOP 20 IN JULY 2023. The Most Visited Websites Globally
1. Google – 88.1 billion visitors
2. YouTube – 33.4 billion visitors
3. Facebook – 17.4 billion visitors
4. Twitter – 6.58 billion visitors
5. Instagram – 6.57 billion visitors
6. Baidu – 5.33 billion visitors
7. Wikipedia – 4.66 billion visitors
8. Yandex – 3.44 billion visitors
9. Yahoo – 3.32 billion visitors
10. WhatsApp – 3.08 billion visitors
11. Xvideos – 2.92 billion visitors
12. Pornhub – 2.68 billion visitors
13. XNXX – 2.35 billion visitors
14. Amazon – 2.35 billion visitors
15. TikTok – 2.11 billion visitors
16. Live – 2.07 billion visitors
17. OpenAI – 1.86 billion visitors
18. Yahoo.co.jp – 1.80 billion visitors
19. Docomo.ne.jp – 1.76 billion visitors
20. Reddit – 1.73 billion visitors
Source: SimilarWeb
