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The pie is bigger, but more and more non-porn and non-adult companies are using porn to springboard their products and services into the market, and as such, the amount of porn dollars staying in the porn business isn't growing like it use to.
Further, with the combinations of higher quality scams and technology theives running under the radar there is a great shift of money away from affiliates and into a smaller and smaller number of blackhat operators hands. Not blackhat SEO, but blackhat operations completely (see 85.255.*.* for more info). As a result, the programs are still seeing big sales, the content providers and backend service people are still seeing their business grow, but on the pure affiliate side, it isn't growing in the slightest.
The number of people I know who have either left the business or shrunk down to nothing is amazing. 2006-2007 has been a horrible year to be an affiliate selling stuff.
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