I'd also like to add a 3rd reason
3) Too many paysites.
I know this will make some of you shake your heads, but the problem isn't too many free sites with free content, its too many paysites.
Why did Cybererotica convert at 1 in 50 in 1998? And retain for 6 months?
Because the surfers had nowhere else to go. There were very few porn options for the paying customer.
Now the customer has more choices than he can ever possibly look at. And alot of these choices have unique content, so he can afford to be picky and shop around for the site he likes the best (shitty conversion ratios) and he can sign up for a short period of time and move on to the next site that has different content (shitty retention)
Competition here, just like any other business, is good for the consumer and bad for the business owner.
You can adapt to the current marketplace and make money, or you can whine about how good things used to be while you go bankrupt.
