How Geeks Took Over The Online Porn Business

It's pretty much an article of faith that the internet has killed the porn business. There are plenty of sites where consumers can find every movie they want for free.

But could the internet actually be making things better for the porn business? Or at least for porn businesses smart enough to understand the new landscape.

That's one of the many things you can infer from a big dossier in New York Magazine this week on online porn.

The porn market is as good an example as any of how firms repsond to new, disruptive technologies.

To many incumbent porn businesses, the biggest culprits are "the tubes", porn sites modeled after YouTube where anyone can upload porn videos, whether amateur content or pirated professional content. Many big porn companies have seen their revenues drop 50% or more.

NY Mag however tells the story of Manwin, originally called Brazzers, a huge online porn company that is making a killing by owning most of the biggest "tubes" and selling advertising against it, as well as using it to promote its own paid smut. Fabian Thylmann, the current owner of the company, whom NYMag calls "likely the biggest porn tycoon on the planet", argues that the wide availability of free online porn has created more people who would be willing to eventually pay for porn.

In a way it's fairly reminiscent of the arguments that first started around Napster and free music. Many people argued that free music for everyone would make life easier for artists by making it easier to promote their music and make music in other ways. And indeed the Internet has helped many indie bands (and huge acts like Radiohead) connect with their audience better. But at the same time the old, Luddite labels are dying.

Another interesting aspect of the NY Mag article: thanks to the internet, today's porn mogul isn't a guy with big gold chains. It's a nerd with great SEO skills to game Google and who can drive up conversions on sites. Thylmann made his money (NYMag estimates he spent around $140 million to build his empire) buying up niche porn sites for a handful of cash and making them almost instantly more profitable by boosting things like search engine traffic and conversions.