Programmer behind YouPorn empire arrested in Belgium
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The base code can be whipped out in a few days, and getting traffic for that kind of thing seems to be super easy. The goal would then be to make minor money through smart advertising (most porn websites today are usability hell, with every single white space covered in ads; i'm sure one could do some smart conversion optimizations there), and major money through acquisition when the brand is built.
I feel that this might be a "low hanging fruit" kind of venture because of the social stigma associated with it ("I'm CEO for a social cupcake sharing app" is so much more cooler than "I'm CEO for a porn site"), but I might just be naive about the whole thing.
Also, I think there was a bit of a land grab in porn before; it has really consolidated to a few big players, with margins otherwise in decline. Manwin/youporn is one of those big players, from the article.
The other bad thing about porn is that even if you have high revenues (and earnings), companies often sell for something like 1x earnings, which is crap.
so like reddit then
Though there are a lot of niche and non-mainstream, and very user submitted porn subreddits.
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.
If you want to start out, I suggest to get yourself a domain name and use http://www.smutnode.com to setup a tube site in minutes.
The biggest issue back in the day was Content licencing, which with today's whole DMCA crap, I would expect it to be far worse on a user-generated content site. If you licensed images for a specific domain and they appeared on another domain you owned, you would have legal representatives sending you emails (most of the time you would just do a deal with the owners and extend the license). This wasn't the result of the content being found by the owner, this was from organised firms that were hired just to scan images and videos looking for specific sets that they represented. When I hear about user-generated content sites these days, I think of one giant nightmare when it comes to content.
It's easy enough to throw something together and try to make some money from advertising, but to be successful in that industry boils down to 3 things. Traffic, Quality and Retention.
- You won't get subscribers without Traffic (fairly simple). If you think that you can get organic traffic off the bat, think twice. You'll need to set up some deals with guys who own key domains to have them funnel traffic through to you. (I don't know if this sort of market still exists, but I can't see that it would have died off)
- To convert the subscribers you need Quality or unique content (which the successful sites will usually do in-house or through companies that will work with them to produce unique content). If you're going to throw up a few galleries of cheap $5 content sets that everyone has seen before, you're not going to get the conversion.
- Retention, is a tricky one. Back in the day you used to count on the subscriber, doing a one off then forgetting stinging them with a re-bill or two, or three. Then when they got their bill they were too embarrassed to challenge they usually silently cancelled. As I said before, around the time I left, Visa was starting to really crack down on charge backs as subscribers had actually grown a pair and started wanting their money back. The only way to fight this is to offer what you advertise and more. You won't keep everyone happy, but you'll see a nicer charge-back rate.
For the record, I was a coder, I wasn't the guy behind the camera, or even the guy that designed the sites. I dealt with the systems, and kept them running. It's not a glamorous title to throw around at dinner parties, but it does bring up some interesting conversations when you start talking about the things that you seen in the industry.
He won't have to worry about licencing content, since he won't knowingly use copyrighted content beyond what freebies are offered to CPA partners.
I think everything you're saying makes sense for a Paysite, but he's not a paysite---just an affiliate and traffic producer which is a bit more downstream.
As for dealing with the major players to have traffic funnelled through him, he won't be able to do that initially because (a) traffic trades require that you have traffic to trade and (b) you're going to want to have your traffic stream through organic links and SEM since you likely can't afford to pay for traffic for a non-paysite: the ROI just isn't there in advertising.
The adult market has no one with the clout of the RIAA to lobby congress.
I said the adult industry doesn't have an organization with clout comparative to the RIAA. That's true as far as I know.
Do you know of such a broad-based lobbying group for the adult market?
This would instantly remove their DMCA safe harbor protections as it relies on Megaupload not being aware of illegal material on their platform. Further it also requires that Megaupload have no financial gain directly attributable to the illegal material.
So basically if the Skype logs are real and the prosecutor can prove this then Megaupload was rightly indicted and should be prosecuted without the protection of DMCA safe harbor.
As a final note, though, I do note necessarily believe they should have the power to take down the business until after they've proven the illegal activity. Just in case anybody got away with that impression.
The pirate bay case in Sweden is the best example of this. The by law required impartial police investigator was hired by one of the parties the day after he finished his work. A several order higher paying job. the exact day after he finished his report on the pirate bay. When the police was asked about it, they said it was "common" practice. Later during the trial, the lawyers requested the investigator as witness (to ask about all this), and the investigator refused to return to Sweden when the court agree to the request. This however had no impact whatsoever on the judgment.
The court judgment is also hilarious funny to read, as it include some golden nuggets of complete unknown laws, not written in the actually law books (reason being, work towards a law counts too in Europe, not just what is written). For example, if you produce a service, you might get hanged for it even if you produce it with perfect fine intentions. What counts is the primary usage of said service, so if you produce a tool, and the prosecutor claims that the primary usage of that tool is crime, you can go down for it as facilitator of crime (generic). Its facts like this, that really would have me worried if I created a program like nmap. Hopefully, prosecutors won't realize this law actually exist.
The pirate bay case is an example of a website, which though safe harbor would protect them in regard to user-uploaded content. They where wrong in that regard.
The reason they haven't is that you're wrong. The DMCA doesn't stop working when you get big. It stops working when you take steps to ensure that infringing content is featured on your site.
For a bulletin board full of nerds, we sure are happy to insult each other's intelligence about what MegaUpload was. What kind of an idiot do you have to be to not understand what made MegaUpload popular? Are you really willing to write a comment in public under your real name saying that MegaUpload was a good piece of software? That sentiment doesn't make you feel embarrassed as an engineer? It was a crappy piracy site; it was popular solely because it was an effective way to upload and download pirated movies and TV shows. If it had been a Dropbox competitor, we'd all be making fun of it, instead of pretending like its founders are technology martyrs.
This is one of the most virulent misconceptions about copyright law on HN. The DMCA does not say that you are protected as long as you honor takedown notices. In addition to honoring them, you must not have any specific knowledge of infringing use of your service that you fail to act on. If any idiot can hit the front page of your site and see that it's used mostly for piracy, law enforcement will take an interest in you once you get big. If, during discovery, they find email messages showing you conspiring to keep copyrighted material on your site, they'll charge you criminally.
But what happened instead was that a prosecutor found they were not protected under safe harbor. With the stroke of a pen, that turned the business into a criminal racket. Overly general mafia and drug war laws then allow the prosecutor to confiscate property and freeze funds, killing the business.
Of course a judge still has to sign off, but there are no provisions for the accused to defend themself or even be informed of the process.
If you don't believe commercial piracy on an industrial scale should be criminalized, then naturally you'd believe that there aren't enough due process constraints on the DoJ to pursue those cases. But if you accept the fact that creating hugely profitable high-volume piracy applications is a crime under US law, it's hard to see the "due process" problem here.
No. The DOJ destroyed the Mega business, and froze Kim Dotcom's assets, and the prosecution will take years to work its way through the courts. Worse yet, they hoodwinked our officials here in New Zealand to come along for the ride. It's a day of shame, not one to defend.
Clips4sale has a good business model. I can see this being the future. But micro-payments in porn are hard.
If you think about it, there's no real difference between the code base for a user submitted porn-site and a user submiitted site for videos and pictures. The only change is the template used on the frontend, and the nature of what you allow to be uploaded.
So a user-submitted content site can be created with a turn-key script that can be had for less than $1000.
Now, in my experience with ad-based content.... advertising rates vary by a pretty sharp degree from month to month if you go through a 3rd party agency. You can make 6 months at X rate, then see a sudden unexpected 30% decline on the same traffic. Couple that with the fact that adult-based ads pay less. For example, Facebook makes $1.00 Desktop CPC, but adult ads regularly sell for $0.01 CPC---1% of mainstream!
Because of that, I can see why sites will have 8 or 10 ads per page in order to get enough margin to cover unexpected rate losses.
I do think you are 100% right about one thing. Smart conversion optimization would be a huge boon in the adult market. Currently, none of the major CPA firms take adult content so its a green-field market. The schelp factor is that you'd have to work with 100s of independent accounts, all with minimum payout floors, but its doable with the right team and lots of traffic.
I'd guess that the tube site is getting some sort of service fee for allowing the sites to have a "premium" service, as well as some sort of kick back depending on the conversion rate from leads generated by the content (why the premium videos are generally listed higher).
If you think that 1) the videos are legit and that guy just happened to stumble across those two girls in the woods, then you're also going to also believe that 2) most of the content is amateur. - It's a sad truth that the industry preys on the weak minded.
I'd say that a fair amount is self-uploaded (via content bought from providers, or produced specifically for the site), but a majority is uploaded from other content houses to try to promote themselves. Think Free to air TV... average crap shows, filled with 80% advertising.
I think that they view "amateur" sites as a 'fantasy' portrayal of reality like television. Yes, TV shows and adult sites don't try to break the 4th wall but that's to be expected in a drama.
That's true, but the paid staff is on the end of the content producers in exchange for having their advertisement placed next to the videos.
Also, Manwin actually charges content producers a 'content rate' in order to use their tube-sites for traffic generation. In the beginning, most tubes had unauthorized full videos which would draw in a user base, but were succeptible to DMCA take down. Now with their premier place in the marktplace, Manwin seeds their tubes with either their own content or requires content partners to produce 1 full video per X weeks in order to remain a featured partner.
As for clips... those are freebies given out to affiliates, I have a hard time believing that everyone doesn't use bots to upload that to the Tube-sites.
How do you know :)?
They are scripts for almost every successful model out there but the problem is reaching mass user adoption. For under $1000 you can have a site done, logo and all but if not enough people submit their videos...
I understand that you don't want a brand like ms. Fields cockies next to a gangbang, but that is soley for ads that promote brand adwareness -- those that directly sell products could properly advertise on porn sites with little risk. I doubt anybody will discount bingocardcreator because Patio11 got a great deal on ads.
(In fact people are known to be less rational when turned on, so it might make sense to put less "need to have products" closer to the porn).
With 50 Mb/video, you can do 20 video's for 1 Gb of traffic. Which, at AWS cost 12 cents. Let's say you'd pay half that at a cheaper CDN, 6 cents. You would, just for transporting the video, need to make 6/20=0.3 cents/page. That's $3 CPM, which seems high. And this is only for transporting the video, not the other infrastructure needed. Not so sure that's a winning business-model.
To be fair, we also looked into setting up our own servers, some places have a few TB traffic with a $50 VPS, but than you need a lot more sysadmin work.
With volume, you can get CDN pricing to 1 cent/page. The adult market, if nothing else, is a place where even mid-range sites can have massive volume and cut special deals.
(S)limelight seems to be what a lot of sites use.
People have this unrealistic view of porn site owners, as being rolling in the dough. It's true for soeme, but they're a minority. Doing porn brings a lot of heat, not just because every tax man out there assumes you're cheating, but also because if anyone is geetting naked for you, you MUST be some kind evil human trafficer, and probably a child pornographer as well. It's a strange lil world. Sometimes I miss it.
EDIT: not to mention lower taxes due to deductions, capital gains, legal tax shelters.
Tax planning, even if it involves a double Irish with a Dutch sandwich, is not.
Sometimes the actual amount you pay is essentially zero.
Do the criminal penalties for tax evasion in Germany also entail such a ban? In the US, it is fines and imprisonment only.
You don't ship anything made with materials -- the videos are all digital, so there is no shipping or transportation going on at all -- so what you are doing doesn't fall under that requirement.
(poor subject for this site)
On a side note, you may be naif about hacker culture. On one hand, a lot of hackers consume porn (by virtue of the fact that a large percentage of the general population does). On the other, we tend to be curious about stuff, even stuff that is considered a "poor subject" by conventional social norms. We're not that big on conventional social norms...
Hmm, if you want to avoid conventional social norms, then NOT talking about porn on the internet is the way to go, I would say. The world is awash with people talking about porn.
OT: Proud to be German today :-)
Ooo fun, -4 on the Karma for that comment.
My comment was not related to porn so much as to the obvious link-bait and predictable "0_o pron!" pile-on. Smells faintly of Reddit with a soft lingering bouquet reminiscent of DIGG of yore.
This is squarely within the mandate and range of interests of Hacker News.