Retail media networks face the same existential threat as tube sites did in 2019

When Visa and Mastercard cut off Pornhub in December 2020, they didn’t just kneecap one tube site. They exposed the central vulnerability in any ad-driven aggregator model: if you’re a middleman between creators and revenue, you’re only as resilient as your weakest compliance assumption. Retail media networks—the Kroger Media Network, Walmart Connect, Target’s Roundel—are running the same playbook tube sites perfected a decade ago, and they’re about to learn the same lesson about what happens when regulators, payment processors, or platform owners decide the risk isn’t worth the margin.

The mechanics are nearly identical. Tube sites aggregated content they didn’t produce, sold ads against eyeballs they didn’t own, and extracted rent from a creator economy that had no better distribution options. Retail media networks aggregate shopping behavior from customers they don’t control, sell targeting data to brands who could theoretically go direct, and extract margin from an advertising stack that’s increasingly questioning why the middleman exists. Both models depend on a fragile equilibrium: creators or brands need the reach badly enough to tolerate the split, and the infrastructure providers—payment processors, cloud hosts, card networks—believe the compliance risk is manageable.

That equilibrium broke for tube sites when Visa’s risk committee decided user-generated sexual content created unacceptable exposure under their Acceptable Use Policy. It didn’t matter that Pornhub had moderation systems. It didn’t matter that the content was legal. What mattered was that Visa couldn’t defend the risk to their board, their regulators, or their merchant partners. Payment processing is a utility until it isn’t, and the moment a middleman becomes a liability, the infrastructure layer will cut them off without ceremony. Retail media networks haven’t internalized this yet, but they should.

The threat vector isn’t identical—retail media isn’t facing obscenity law—but the structural exposure is the same. In the U.S., the FTC is sharpening its focus on data brokers and surveillance advertising under Section 5 authority. In the EU, the Digital Markets Act requires gatekeeper platforms to allow business users access to data generated by their own transactions, which directly undermines the moat retail media networks have built. If a CPG brand can get its own first-party purchase data from Walmart without paying Walmart’s media network a 25% margin, why wouldn’t it? The only reason these networks have pricing power is because the brands don’t yet have better infrastructure. That’s changing faster than anyone in retail wants to admit.

Adult learned this the hard way. When tube sites collapsed, the creators who survived were the ones who’d already built owned distribution—email lists, membership sites, direct billing relationships, audience they controlled. The OnlyFans model isn’t just about tipping and paywalls; it’s about decoupling revenue from intermediaries who can disappear overnight. The same shift is coming for brands in retail media. The CPG companies now spending billions through Kroger or Instacart are starting to ask why they’re paying rent to access their own customers. Amazon figured this out years ago with Seller Central and Brand Analytics—give brands just enough data to feel like they’re in control, but keep them dependent on your ad stack. Retail media networks copied the tactic without copying Amazon’s leverage. Amazon owns the buy button. Walmart and Target still think of themselves as landlords, not platforms.

The compliance angle accelerates everything. Tube sites assumed their Section 230 protections and content policies were enough. They weren’t. Retail media networks assume their customer data usage complies with GDPR, CCPA, and whatever state-level privacy law passed last quarter. Maybe it does today. But regulatory frameworks are tightening, enforcement is increasing, and the moment a retail media network ends up in a consent-order negotiation with the FTC over data handling, every brand counsel in America will reassess the risk of that partnership. Payment processors didn’t wait for Pornhub to lose in court—they cut the relationship the moment the liability became visible. Card networks will do the same to any retail media stack that becomes a regulatory headache.

What adult operators learned—and what retail media strategists should absorb—is that ownership of the customer relationship is the only durable moat. Tube sites had reach, but they didn’t have relationships. When the infrastructure failed, they had nothing to fall back on. Retail media networks have targeting data, but they don’t have loyalty. The brands tolerate them because direct-to-consumer infrastructure is still expensive to build and clunky to operate. But Shopify’s ad network, TikTok Shop, and even YouTube’s shopping integrations are all building the rails for brands to bypass retail middlemen entirely. If your business model depends on brands not having better options, you’re not building a platform—you’re renting time until someone does.

Key Takeaways:

1. Middleman monetization only works as long as the infrastructure layer tolerates the risk—adult lost payment processing, retail could lose data compliance or card network support.

2. Owned distribution always beats rented reach; brands that build direct customer relationships survive platform collapse, the ones dependent on retail media networks don’t.

3. Regulatory tightening on data usage and surveillance advertising will force the same reckoning in retail that content policy enforcement caused in adult—networks that can’t prove compliance will lose access to revenue rails.

The adult industry didn’t see Visa coming because it assumed the business model was too big to cut off. Retail media networks are making the same assumption about their data partnerships, their brand relationships, and their card network dependencies. They shouldn’t.

Max Candy — maxcandy.com