Quote:
Originally posted by frippeno
I agree with most of what you say, but I disagree with this. If sponsors could have made money getting rid of affiliates, they would have already done so. Truth is, they are paying pennies on the dollar for the traffic affiliates send, and they know it.
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I see your point, but it's based on how things have been up to now.
Managing employees (even telecommuting ones) is a pain in the ass. There's lots of paperwork to do and with some employees you have to look over their shoulder constantly.
The sheer annoyance of it is often enough to make someone not want to do it, and skip over it for a solution that is more expensive, but less of a hassle.
Affiliates are becoming increasingly expensive. Not only is there the high payouts or revshare percentages, but now there's free hosting, hosted galleries and free sites, hosted movie galleries, more and more free content that must be given out... you guys have no idea how much bandwidth just 20 webmasters can burn per day. Now try to imagine 200 or more on your free hosting, with another hundred pulling all of your hosted galleries. The cost is staggering. Add to it the "rewards" programs, special payout bonus days, advertising on webmaster resources to recruit more webmasters and create branding, and sponsoring parties and events for webmasters - affiliates have gotten damned expensive. Much, much more so than they were just 2 years ago.
It used to be justifiable to have affiliates rather than employees. However, things are changing. The much higher cost of recruiting/keeping affiliates and all of their demands, Acacia's fees, Visa's crackdown, and eventually the other two video patent holders are going to make it much, MUCH harder to turn a profit.
When that happens, they'll be looking for ways to recoup as much money as they can and reduce their chargeback risk. Doing more things in-house is the answer to that.
Keep in mind that most bigger sponsors *already* have in-house webmasters building sites and competing directly with you. It wouldn't be that much of a change to simply turn off the expensive affiliate programs and move *all* of the traffic generation in-house.