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What do cable TV, online payments, and book printing have in common? All of these innovations have spread thanks to “adult content”. And now, the porn industry can give an impulse to a whole direction of AI development.
The question that prompted this article is, what is Ethical Capital Partners, and why are they investing in such assets? Although the term “ethical” may suggest that ECP invests solely in companies with a moral agenda, their focus is actually on assets that are lacking ethical practices in their management.
According to their website, ECP provides support to streaming services, online content creation studios, and advertising platforms to grow their ethical business practices. However, the impressive profitability of such ventures is not explicitly mentioned on their landing page. Nevertheless, this article is not about their profitability but rather to set the context for the acquisition of the porn empire by ECP.
MindGeek is an IT holding company that many people may not have heard of. While you might expect the techies at MindGeek to be developing innovative IT technologies, their most recognizable assets are not exactly known for their technology. MindGeek is the parent company of Porhnub (also known as “orange Youtube”) and Brazzers, two of the most popular adult content portals.
I won’t go into much detail about the activities of these brands. However, it’s worth mentioning that Pornhub, which is MindGeek’s main asset, has been at the center of multiple scandals in recent years.
The accusations against them range from illegal uploading of copyrighted content on the portal without permission to trading pornography involving minors. There have also been concerns about their verification procedures, which have been deemed insufficient.
Like other major players in the porn industry, MindGeek has been accused of excessive sexualization and exploitation of women. Interestingly, there’s not much talk about men’s involvement in porn, which seems to suggest that they participate on a voluntary basis.
In fact, in 2021, Visa and Mastercard suspended processing payments for Pornhub due to their reputation issues, which had become too significant to ignore.
Why is this ethical fund really buying unethical pornographers?
A few weeks ago, ECP, a group of ethical investors, announced that they were purchasing MindGeek for an undisclosed but undoubtedly substantial amount. MindGeek’s dubious reputation made the acquisition a challenging sell, but it was justified by the intention to reform the company’s practices and eliminate its negative image.
However, according to insiders, the purchase is not solely about that, nor is it only about ECP’s attempt to buy the leader of a highly profitable market while disguising their intentions with ethical investments. Instead, the motive behind the acquisition could be even more fascinating.
Surprisingly, it could be a desire to solidify ECP’s dominance in specific areas of artificial intelligence-based solutions. The development and commercialization of deepfake technology have been active in the video content industry for some time, even preceding the GPT boom. For instance, fake versions of Tom Cruise, Leonardo DiCaprio, and Elon Musk have been used in advertisements. Additionally, the former creators of South Park raised $20 million for their deepfake studio, Deep Voodoo, which primarily targets the film industry.
- An advertisement featuring deepfakes of Tom Cruise and Leonardo DiCaprio aired six months ago, and it is unknown if the real Tom Cruise performed the stunts for his deepfake. A month later, a fake Elon Musk was used to promote a startup in the real estate industry. A year earlier, there was a Megafon ad with a fake Bruce Willis and supposedly real Azamat Musagaliev.
- In December, the former creators of South Park established their deepfake studio, Deep Voodoo, with a $20 million investment. The studio previously produced deepfake clips for various rappers, but their primary focus is the film industry.
- The film industry has already embraced a more specific implementation of the technology. For instance, Robert Downey Jr. was digitally de-aged in the Avengers movie, and the likeness of Mark Hamill was used in the Mandalorian series.
The progress of deepfake technology is now set to take a fundamentally different direction. However, the widespread implementation of deepfake characters in major films still has limitations. Such films may not be considered authentic by critics, viewers may dismiss them as mere popcorn entertainment, and they may receive poor ratings on Rotten Tomatoes, among other concerns.
Moreover, it is uncertain whether A-list actors at the height of their popularity would agree to have their likeness used for such experiments. While it may be acceptable for lesser-known actors like Bruce Willis, the same cannot be said for those with more prominence. As such, reconciling AI-generated films with traditional ones or cultivating a new generation of virtual stars may be necessary, which will take time.
However, the situation is markedly different in the porn industry. Consider the following:
- Pornography is primarily created for the purpose of mass consumption, representing entertainment in its most raw and unfiltered form. Unlike traditional cinema, the opinions of critics and ratings hold little to no weight in the porn industry. Although there are awards and moments of recognition, people consume porn for different reasons and according to various criteria.
- Individuals who enter the industry do not typically do so for artistic purposes, nor do they often envision themselves winning prestigious awards like the Oscars. Instead, many view it as a means of social advancement, a path taken by those who are daring and desperate. As a result, it may be easier to reach an agreement with adult film actors regarding the use of their likeness in deepfake videos.
- Compared to traditional cinema, pornography is much simpler to produce, as it does not require a complex story, editing, special effects, or cinematography. While some may argue that porn does have a storyline and even cinematographic elements, in reality, even a neural network could easily create a basic pizza delivery scene.
- Finally, the gradual replacement of live actors with deepfake technology has the potential to significantly mitigate the scandals that have plagued the porn industry. It could transform this business from one associated with the exploitation of vulnerable individuals, including girls and boys, into a socially responsible enterprise that takes responsibility for and improves its practices. This transformation will likely occur in many industries, but the porn industry will experience the most dramatic contrast. It’s safe to say that individuals with diverse perspectives and interests will appreciate this shift.
To put it simply, the porn industry provides an ideal testing ground for deepfake technologies and other AI-based solutions for visual content creation. It also has sufficient demand to finance the commercialization of even the most complex technology. Furthermore, neural network-based solutions are already being actively used by adult enthusiasts.
Some media outlets report that “ethical investors” are investing in MindGeek, as they believe that this controversial product may soon become very cheap to create. These investors are using their supposed specialization in ethics to justify their participation in this rapidly growing industry. However, the issue of ethics may not be much of a concern, as it is likely to be resolved with time.
If some of these technologies prove to be successful, they may also be used outside the porn industry. In short, MindGeek has a bright future ahead of it. The only question is whether the individuals who previously turned to the porn industry as a means of income will be happy to be replaced by artificial intelligence. This remains uncertain.
How the adult industry has defined the direction of technological progress – remembering the most prominent cases
If you’re thinking “Big deal, the porn industry is contributing to technological advancement” after reading the previous text, then keep reading. This is not the first time the sex industry has played a role in technological progress. Although pornographers are not responsible for creating new technologies and innovative products, there are several historical examples of them acting as a “critical mass” and helping to establish a particular technology as a generally accepted standard.
Let’s take a brief look at some of these examples. Starting from a long time ago, we all know that Johann Gutenberg, a German inventor, conducted the first experiments with book printing in the 1440s. However, it wasn’t until about 30 years later that William Caxton, an Englishman, established one of the first truly large printing houses and became a fully-fledged publisher of his time.
Interestingly enough, the first book to be printed in a large edition was “The Canterbury Tales” by the poet Geoffrey Chaucer. This collection of several novellas in verse reflected and ridiculed life in England at the time, with many novellas touching on the lives of the lower classes of society and poking fun at the sins of the Catholic clergy. It’s worth noting that the novellas also contained explicit scenes, which were considered hardcore pornography at the time and deemed socially unacceptable by many of Chaucer’s contemporaries. Today, such novellas would be referred to as “erotic.”
It’s conceivable that the advancement of book printing may have been facilitated by XXX materials, as per the standards of that era. The implications of this progress on human history is a separate inquiry (hint: it’s significant).
Moving on to the era where pornography began to resemble modern pornography, there is a notable incident worth mentioning. It involves the porn industry and how it influenced the flagship video cassette format.
During the 1970s, Sony and JVC, two Japanese powerhouses, competed for market dominance in video cassette technology. Sony released the Betamax format first, followed by JVC’s VHS format a year later, which we all know today. These two formats had support from various major players in the market, resulting in the formation of two distinct influence groups. However, these groups held divergent views on the market, as well as the product characteristics themselves.
- Sony adopted a stringent approach when it came to granting licenses to potential users of their new format. Moreover, in order to minimize risks, the company declined to collaborate with distributors. The Betamax format, while having superior image quality, had a smaller recording capacity.
- In contrast, JVC opted for a more egalitarian approach and extended favorable terms to distributors interested in their format. Despite VHS having a lower image quality, it was capable of recording considerably more material, spanning several hours.
Consequently, the emerging porn industry opted to extensively use VHS, and given that the cassette formats were not interoperable, it’s not hard to guess which video cassette recorders were preferred by the general public.
In the 90s, pornographers used a similar approach with DVD discs and subsequently with the Blu-ray format.
As it turns out, in the realm of video, the adult industry was able to create the requisite network effect for specific formats, thereby ensuring their widespread popularity.
The network effect is a phenomenon where the value of a product or service increases with a growing number of users. For instance, as more people purchase VHS video recorders, more videos are released exclusively on VHS, resulting in greater benefits for each VHS video recorder owner.
One could argue that the example of video cassette and disc formats is too trivial to be considered significant. So, let’s consider a more relevant example – online payments, a ubiquitous feature that we rely on for various transactions today. Interestingly, we have adult films to thank for their inception.
In the 1990s, Christopher Mallick, a young American entrepreneur, was invited by two of his friends to help them launch a porn site. While working on the project, Mallick observed that porn sites struggled with credit card payments, which hindered their ability to monetize their content, including through subscriptions.
Consequently, Mallick convinced his friends to focus on online payment processing instead of explicit videos. This led to the birth of Paycom, a company that processed online payments for websites. While Paycom served various industries, it was porn sites that boosted the volume of transactions processed to an impressive $1.5 billion annually.
Malik faced challenges later on, specifically with his next fintech venture ePassport, which became embroiled in a fraud scandal and resulted in the blocking of users’ funds. Nevertheless, Malik’s contributions to online payments were significant and laid the groundwork for the way we make payments today.
The influence of pornography on the internet cannot be ignored. When the internet began to take shape in the 1990s, the porn industry quickly capitalized on the opportunity. It made sense because downloading porn from the internet was more convenient than purchasing tapes or magazines. Moreover, the internet provided privacy, which was crucial for such a sensitive matter.
The phrase “Internet is for porn” became famous because the internet and porn became symbiotically linked. At some point, adult content made up almost half of the global internet. However, there was a problem: speed. People wanted to consume high-resolution content, and this required faster internet.
In 2004, Nielsen released a study that found porn played a significant role in the development of broadband internet in Europe, although other factors such as file-sharing services and music downloads also contributed. Nevertheless, adult content served as a catalyst for overall internet traffic consumption.
The porn industry has contributed to numerous technological advancements beyond the ones mentioned, including webcams, private chats (which eventually evolved into messengers), cable television, and modems, among others.
Now, it appears that artificial intelligence is the next big thing. But fret not, AI, you’re in capable hands!
A few words in conclusion
Why does the porn industry seem to be a hub of innovation? Perhaps it’s similar to how many innovations emerge during times of war, or how some swindlers or prison inmates create inventive gadgets that border on genius.
When one needs to push the limits of physical ability and adaptability to survive, innovation arises naturally. And with the porn industry’s ample resources, such innovations can be scaled sustainably.
All things considered, we should express our gratitude to the porn industry. It’s possible that due to its presence, people exhibit slightly less aggression and hostility towards each other.
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