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Originally Posted by ravenazrael
Really great points... So a 50% would be enough to actually turn a profit?
Do affiliates only make money based on signup in most cases? Or a rev share? I have seen sign up mostly
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I've had some first hand experience with running a cam site during the past four or so years too, even used to run two studios back in the day (but that was really old school 2003 -4)
The assumption that you'll make the cam site earn based on a pct. / payout whatever projected number or business model is not the way you want to be thinking. In fact, as long as it makes arithmetic sense, it's not really that relevant to achieving your goal - turning into profitability, as there are way too many variables that come into place.
Content - as mentioned above, the content costs for a start up site can run up to 100k a month easily, if you want decent models it will cost you $ that you won't make back anytime soon, no matter if you offer them a salary or offer your members free tokens etc.. Decent models means not only looks but also pro setup, attitude, entertaining, personable, decent language skills, well managed.
Big established studios may not work with you unless you got good references and can guarantee them frequent (say weekly) payments, at least for the first months you work together, too many got burned with new sites offering them a great deal, closing down and never paying up.
If you don't want decent models you can sign up a bunch of Phillipinos but in that case your site will die a painful death. And that is only the content alone that is necessary for you to be even able to convert anything into some $ back.
Traffic - you're competing with companies that have their ad budgets in millions, of course it can be done but again be prepared to burn a major amount of money before building a recurring member base that starts spending. An experienced and reputable ad buyer or even better own traffic is worth gold.
Development - if you think you can put together a script and off we go it's also not the way it works. The site and server setup must be extremely robust, any downtime or acting up loses you customers that will never come back, traffic landing on a site with downtime is a irreversible loss. This will also make hard to keep performers in tact, and increase your chargeback ratio.
Therefore the setup and architecture should also come from somebody who has a first hand experience with actually running (not only coding) a cam site. You will also deal with many issues among the way, there will be DDOS attacks, lots of fraud attempts, you will need to tweak the site for better conversions and retention. So the idea that you put something up on auto-pilot and do basic support and server maintenance won't work either.
Fraud / support - as a new site you are likely to be targeted by any means of fraud, this is customer fraud as well as performer fraud. You need to keep in mind that anything that can be abused will be abused. Your chargebacks ratios are likely to be high (which can get expensive with VISA and Mastercard charback management fees), and it will require a continuous attention, on a daily basis to keep the ratios in tact.
Models need to be not only carefully picked but also constantly monitored and you need to weed out those that don't perform and look for any way to abuse the system.
Administration - variety of payout options, payouts must be on time, no mess up allowed, you need to have a reserve at hand, be extremely attentious and accurate, be ready to compensate for downtime or any other tech issues.
Any of the factors above not working properly and the whole operation will collapse like a domino.
All and all, you need to be prepared to bleed financially for at least a year, including the glory of running a 24/7 operation where anything that can go wrong does go wrong in the worst possible time frame, and usually coupled together.
And that if you are experienced and know what you're doing, can avoid the countless pitfalls of running a live cam operation. As for budget I would say $5 M or better $ 10 M for a start up at least. Of course if you're very smart or have your own traffic you can start and operate on a smaller scale.
But if you're starting with nothing it's pretty much all in.