I think that this is a great conversation... I commend Paul for starting a purposeful business conversation.
I don't run a paysite... I don't own a program... I am an affiliate. That said I would interject my opinion... take it for what it is. If you look at the paysite market it's easy to see that the statements above are very true... there are too many paysites and too many affiliates. I think that we need to take a strong look at what's next.
Personally, I don't think people purchase memberships purely to satisfy a 30 second need. Some do... but if you look at the popularity of solo girls and amateurs, currently, you can see a clear motivation other then that masturbation opportunity. There are underlying motivators in addition to ejaculation that most adult sites don't even market to. I think it's pure business 101 to keep an eye on your market (and associated markets) in an effort to flow with the times, especially if your product has reached it's plateau and has moved into mid life. I see that most programs deal with this product life cycle by introducing new products... some win and some don't.
All of this talk about "the decline of porn" is funny to me. The internet is NEW MEDIA. We are just at the beginning. I think that there is HUGE opportunity for companies that can think outside of the current "box" and figure out that the market is much larger then they initially thought and that they have been focused on a very small part of the market.
Every year porn is more and more mainstream. I think that successful companies of the future will learn to market to lifestyle and expand their product lines. A year ago or so I heard about a company that has a stupid ass VP who basically blew off an advertising opportunity where a mainstream film company wanted to market an upcoming film on this porn companies traffic site. I might be wrong about the exact numbers but from what I heard this advertising revenue would have been in the neighborhood of $250k. If this venture would have been profitable for the advertiser then I have no doubt that it would have led to a long term relationship and a huge proverbial foot in the door for this adult company to market mainstream products. The real issue here is that this adult company has elevated an under qualified individual to a position that affects the bottom line of the company... pure and simple. The lesson above is twofold... the adult market should expand to include more adult oriented products then just porn and also need to evaluate whether the people working at the company have the experience and knowledge to bring your company into a successful future.
Now I will rant about affiliate marketing. How much are you spending on dealing with affiliate fraud? How much do charge backs cost you? How many of you have experienced people auditing your affiliates? How many of you allow affiliates from every third world country on earth? I think that affiliates built alot of your business but at this point in time you need to audit them. I don't mean fuck them over... I mean you need a better affiliate selection process and more stringent requirements to allow promotion of your products. I think you need identity verification and affiliate responsibility. Alot of you accept traffic from every crap site on earth. I can guarantee that investing in hiring people that have REAL experience in the industry as affiliates to audit your affiliates, handle your marketing, generate your own traffic, etc would be a great investment for most of you.
The bottom line is that you need to take a close look at each dept in your company and figure out how to increase your return. There are alot of companies out there with idiots in important positions... I know... I have met them at shows. After you have completed that task, you should look at your market share and think about what needs to be done to increase it. Stop bitching about lower profit margins and take action.