While obviously they'd restore adult content to Tumblr, my guess is they'd keep Tumblr as a somewhat mainstream brand, and not let it be too directly associated with their existing properties to maintain mainstream appeal. A YouTube competitor would fall along the same lines.
Although we all know a few people here and there who don't know YouTube is owned by Google, the majority of people do understand the YouTube + Google/Alphabet relationship.
I think this is very tech centric view. I asked my wife (tech savy enough but doesn't work in the industry) and she didn't have any idea who owned Youtube, and had never heard of Alphabet.
I know it's only one data point, but I think it's easy to be blinkered when actually the truth is probably that most people outside of tech have no idea about tech company relationships.
Advertising is not the only way to generate revenue, and even if they want to go the advertising route, there are non-mainstream advertisers that may be interested.
Then eventually the big studios just started buying the toob sites and cut out the middle. Most of them serve a subset of studio content or clips. Tumblr's limited video size/length really helped contribute to this model. Most people watch the clips, but the people who buy can get sucked into a lot of hidden subscriptions they forget to uncheck, or even direct up-selling they'll intentionally select.
I mentioned it in a different comment: I miss the content that YouTube used to have before they started punishing the stuff that advertisers objected to (through demonetization and refusal to recommend them).
Far too many YouTube channels now are clearly walking on eggshells and being very careful about what they say and do. It makes the videos less interesting and informative and more like traditional broadcast TV.
There are still channels that don't sweat demonetization at all, and those tend to be the only ones I watch anymore, but they're getting few and far between.
The issue with YouTube in recent years, is that it's been treating its content creators and viewers as "product" and the advertisers as the users. YouTube has been pandering to executives in media and their particular thought bubbles while throwing users and content creators under the bus. (Or doing things specifically to increase centralized control for the sake of pandering to advertisers, to the detriment of users and content creators.)
Pornhub could well do better. (Or they could repeat the same mistakes.)
Advertisers don't want their brand associated with content they find questionable. They pulled their advertising or at least threatened to. This lead to the "Adpocalypse".
A lot of creators argue that content is unfairly or incorrectly demonetized. That's an area where a competitor could improve. The competitor would still have to deal with the fact that advertisers are sitting on the money and want a say in how their ads are showing up.
PH already has paying premium users, so maybe would be just something to keep them on PH-related websites through the end of their refractory period, hopefully directing them back to PH when they start getting horny again
It's certainly something to keep in mind during the market research phase, but I don't think this means that all the possible competitors are destined to lose money if they make an attempt at competing.
They would just clone youtube—they have the exact same relationship with advertisers. I don’t see that gaining any traction.