Paul, nice long speech that says "I don't understand business basics".
Advertising takes all forms - and that includes free videos on a tube site. Those videos are advertising. The tube sites make bandwidth a marketing expense, their most major expense. Rather than paying for clicks or paying affiliates, they pay for bandwidth by the bucketload. Trust me, I did the math, these guys are shovelling money over for bandwidth at rates that would scare most adult businesses.
They can do it because they have no production costs, no costs to produce the content, and the sponsors are still paying enough to justify the bandwidth.
If as you suggest the value of adult clicks were to drop, or affiliate programs were to significantly drop their payout, there would suddenly be little or no way for these tube sites to pay the bills. Already, they aren't selling porn as much as they are selling dating, poker, and hair loss products. Anything for money. That will be money gone from adult and sent elsewhere.
The cost of adult clicks will never drop far enough, as there is always a dating site, or a poker site, or a "something else" site willing to pay for it. New filters get developed, traffic gets shoved around, and the cost of the traffic never gets low enough to support your proposed business model.
Adult will never get rid of all of the theft. Nobody can, nobody ever will. That isn't the point. This isn't the quest for the absolute answer. Getting rid of the largest sites, getting legal judgements that make them harder to oparate in the future, making it harder for them to get processing, hosting, connectivity, and search engine listings are all ways to minimize the damage.
You may not think so, but people are more than willing to pay for porn, in the same manner that hundreds of millions of people are willing to pay to watch the latest movies in a theater rather than waiting for it on DVD or trying to download a crappy copy shot with a video camera on a tripod in the middle of a noisy theater. Torrent sites and tube sites are a huge negative on DVD sales (porn and non-porn alike), they create an intolerable situation for everyone involved.
Except you, because you haven't figured out yet that at some point, all the content you produce because worthless and your business ceases to exist.
But hey, carry on.
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