Originally Posted by hjnet

Maybe I'm stupid, but I'm still wondering how tube sites could be profitable. As many of you know I'm running a few mid/bigger MGPs myself, and it makes me some nice money each month. But costs for servers/BW also eat ~20-30% from that each month, and I buy at ~ $9-10/mbps, and manage my servers on my own.

So I know that there's still cheaper stuff, let's say ~$6/mbps for bigger costumers, but somehow I still don't get it how Tube sites can produce a reasonable ROI each month. I doubt that the conversion rates on a tube sites are better than those on a plain MGP/TGP traffic, but since they're hosting their video stuff all by themselves, their BW bill must be much higher. And additionally you always have the risk of getting sued, or some other legal issues, which is also some kind of "cost". And wasn't it in the media 1-2 years ago that even youtube.com has issues to became profitable? And we know that mainstream traffic is worth a lot more than our porn stuff. So I'm seriously wondering how these sites make money.

Or is it just a hype a few investors started to get their sites big, and sell them later. And now lot's of people start to jump on the bandwagon in the hopes for quick money?

DISCUSS, tell me what I'm missing here....