In the mid 2005s, the 'tube' sites emerged serving theoretically user-generated content in the vein of Youtube. In reality, very few actually focused on ameteur material, and most just had full videos or clips from paysites.
The ones with full videos were considered to be 'illegal' tubes but the adult market doesn't have an organization with the clout or lawyers equivalent of the RIAA so most of the content stayed up.
The tube sites made their money through advertising and through CPA affiliate programs for paysite networks. Paysites had a love-hate relationship with the tubes. On the one hand, they got traffic conversions. On the other hand, the tubes would use content without authorization which hurt the conversion ratios, and made the paysite content as a whole less valuable to surfers in the know.
Manwin was originally a paysite network, but unlike their competition they embraced the idea of tubes. They launched paid-content websites (under the Brazzers brand) while founding their own tube network (KeezMovies, PornHub).
That vertical integration gave them higher margins than the compeition---they owned both the traffic generators and the eventual paysites needed for conversions. As they became more successful, they went on a buying spree and through various mergers and name changes emerged with over 10 paysite networks under their brand as either wholly owned entities or content partners (e..g Playboy), and 8 of top ten tube sites.
As for margins....
I believe there was a margins slump from 2007 onwards due to the slump in the advertising market as a whole. But mainstream adprices are creeping upwards, so adult-side margins should also be improving.
> companies often sell for something like 1x earnings
AFAIK all deals are closed behind the scenes, and mostly between private parties. So the information on the sale price is not good.
In the mid 2005s, the 'tube' sites emerged serving theoretically user-generated content in the vein of Youtube. In reality, very few actually focused on ameteur material, and most just had full videos or clips from paysites.
The ones with full videos were considered to be 'illegal' tubes but the adult market doesn't have an organization with the clout or lawyers equivalent of the RIAA so most of the content stayed up.
The tube sites made their money through advertising and through CPA affiliate programs for paysite networks. Paysites had a love-hate relationship with the tubes. On the one hand, they got traffic conversions. On the other hand, the tubes would use content without authorization which hurt the conversion ratios, and made the paysite content as a whole less valuable to surfers in the know.
Manwin was originally a paysite network, but unlike their competition they embraced the idea of tubes. They launched paid-content websites (under the Brazzers brand) while founding their own tube network (KeezMovies, PornHub).
That vertical integration gave them higher margins than the compeition---they owned both the traffic generators and the eventual paysites needed for conversions. As they became more successful, they went on a buying spree and through various mergers and name changes emerged with over 10 paysite networks under their brand as either wholly owned entities or content partners (e..g Playboy), and 8 of top ten tube sites.
As for margins....
I believe there was a margins slump from 2007 onwards due to the slump in the advertising market as a whole. But mainstream adprices are creeping upwards, so adult-side margins should also be improving.
> companies often sell for something like 1x earnings
AFAIK all deals are closed behind the scenes, and mostly between private parties. So the information on the sale price is not good.