Wendys Manager

Alternative Medicine
Take heart. A number of alternative billing mechanisms are beginning to emerge that have the potential to replace the current credit card system, according to experts. "Over time, marketing practices within the adult Internet have become far more aggressive, as most of the established consumers who have been around do not jump as quickly for premium subscription offers," explains Scott Rabinowitz of TrafficDude.com, "Of course, since traffic has a baseline cost, whether through advertising, labor, bandwidth, or all three, we have had to find more creative ways to derive return on our investments." Three primary mechanisms have the potential to replace credit card billing: direct billing via banks, payment clearing houses, and telephone companies.
Direct billing takes two forms: using ATM charges rather than credit cards, and online checks. Online checks don't work well for Website charges, though, because Webmasters don't know whether the consumer actually has funds in the bank to cover the check, raising the possibility that the consumer might download a gigabyte of content in the time it takes for the check to be rejected. ATM billing shows additional promise, but consumers are rightly afraid to put that level of financial information onto the Web because online checks lack the protection of credit cards, leaving the consumer with no recourse in the event that he gets ripped off. This is not to say that direct billing does not have potential. However, it would have to be set up so that consumers would feel comfortable and secure, and so that Webmasters would be able to immediately check for the presence of funds in the account.
Payment clearing houses have become increasingly popular among adult Websites. Some of these business concepts are surprisingly sophisticated. E-gold.com, for example, allows consumers and businesses to send specified weights of previously-purchased gold into others' e-gold accounts. Only the ownership of the gold changes, while the gold itself remains in the e-gold.com vault. Officials from e-gold insist that the service offers immediate settlement of charges, worldwide; low transaction fees; and no chargebacks. "Adult sites such as BedroomBondage.com and RussianPix.com, apparently acting in response to the void created by PayPal's departure from various adult niches, have started taking e-gold," says Dr. Douglas Jackson, chairman of e-gold Ltd.
Telephone companies would seem to be a natural replacement for credit cards because these firms have internal billing mechanisms and a one-to-one relationship with consumers. Up until now, schemes for using telephone companies for adult Internet billing have been limited to dialers and 900 numbers. Though they are quite popular overseas, in the U.S. at least, dialers are probably not the answer.
This is because they have been subject to Webmaster abuse, as evidenced by widely-publicized horror stories of unscrupulous Webmasters who don't inform the consumer of charges that are being generated. The alternative method, 900 numbers, doesn't have this liability, but has another liability that makes them unattractive to Webmasters - the inability to do automatic rebilling.
A solution to this problem may be emerging in Europe, where a number of sites have been billing consumers via SMS (Short Message Service), a technology that enables short messages of generally no more than 140-160 characters in length to be sent and transmitted from a cell phone. It works something like this: When the consumer sees a Website that s/he'd like to access, s/he authorizes the site to send his/her cell phone a message every day, for the life of the subscription, with a charge connected to each message. So long as the consumer continues to accept the message, the subscription continues, and the fact that the consumer must authorize the charge (by accepting the message) prevents the most obvious kinds of fraud. As an advantage, the SMS billing method is totally anonymous and untraceable because the transaction isn't channeled through the consumer's bank account.

Changes in Behavior
What's significant about all of these alternative billing methods is that they move the consumer/Webmaster relationship away from a "paid subscription model" to a "pay as you go" model. This is very bad news for Webmasters whose revenue stream depends upon fully automatic billing (as in "I hope he doesn't notice the monthly charges.") Instead, future porn consumers will need to make regular, explicit decisions to remain with a site. This is a requirement because, without a "pay as you go" model, any alternative billing mechanism that evolves, if it supports fully automatic chargebacks, will eventually reproduce the same abuses that are making credit card processing uneconomical.
Regardless of what mechanism eventually evolves, adult Webmasters will no longer be able to depend upon consumer forgetfulness to secure an ongoing revenue stream. Instead, adult Webmasters will be forced to build sites that retain customers, that continue to interest consumers longer than a trial membership period. This is going to come as a major financial shock to Webmasters who are more concerned with acquiring new customers than with keeping them, because as consumers switch to a more pay-as-you-go billing mechanism, those Webmasters will find their customers gravitating toward sites that remain interesting over a longer period of time.
In other words, taking advantage of the future of online billing will lie in providing the consumer with an experience that justifies ongoing charges. Some top Webmasters are already implementing such schemes. Max Hardcore, for example, now offers all of his photo shoots on a simulcast Webcam, with very little advance announcement, a policy that encourages consumers interested in his content to hang around on his site to see what's going to happen next. He also keeps a very lively forum, with frequent participation from Mr. Hardcore, his Webmaster, and a couple of his best models. "A member never knows what he's going to find," he says, "and there's usually some crazy shit going on." Hardcore also is one of the few Webmasters to implement staggered content, where some of the archival content of the Website is gradually revealed to the paying customer - another good method for customer retention.
As Webmasters move toward a sustainable, pay-as-you-go business model, they'll also be re-examining their affiliate programs. Indeed, that's already taking place, according to Colin Rowntree of Wasteland.com. "Webmasters are finding that it's no longer economic to make big payments for conversions and instead are moving back to a revenue sharing model, where the affiliate is paid a proportion of the revenue generated from the referred customer," he explains. While this means that payments to affiliates will be stretched out over a longer period of time, it will give affiliates incentive to direct traffic to pay sites that are not only likely to convert well, but likely to generate the kind of customers who will stay with the pay sites for a long period of time, thereby creating ongoing revenue for both the pay site and the affiliate.
The end result of these structural changes will hopefully be a business model that's sustainable and which does not, like today's business model, contain the seeds of its own destruction. How to position for the future? That's easy. Smart adult Webmasters are already focusing on obtaining high quality traffic that's likely to generate high quality conversions that remain as members of the site for a long period of time, thereby creating ongoing revenue. At the same time, these Webmasters are focusing on putting together sites that have the kind of content, entertainment, and interaction that increase customer retention. Colin Rowntree puts it this way: "It's a bit strange that it's taken this industry so long to figure out that finding good customers and treating them well is the key to making money."




if you don't understand this then you should either get out of this indusrty or just shoot yourself in the eye

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I said SIG TOO FUCKING BIG ASSHAT