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My thoughts:
In todays environment if you know how to get traffic it is more profitable to run free sites advertising affiliate programs.
Pay sites are a pain to manage and operate and with all the new visa regulations/chargeback issues there retention levels and profit margins are at an all time low. The big guys make money on volume plain and simple and the odds of ANYONE new comming into the game and opening up huge successful paysites is slim to none. You simply aren't going to get enough affiliates if you're a new program IMHO. Not to mention the big guys also have YEARS of rebills behind them that make there per sale profits average out to a lot more than a new program.
In the past I've considered opening up paysites but then after carefull consideration I always come to the same conclusion: The amount of time it would take to "manage" a paysite would take a way from time I could spent getting traffic. Not to mention that my initial retention would be low and therefore my average gross per sale wouldn't be great. So bottom line equals less traffic and less money made per join. The only hope of making bank is increasing your volume through affiliates which is a very hard task.
So enought of my ramblings... For ME I find it much more profitable running free site pushing affliate programs.
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