The future is going to be interesting that's for sure.
The belief that free content drives all the traffic is BS. I know the truth based on the sales we get on
www.bargainbasementcontent.com just how many buy content to drive traffic. A lot more webmasters buy it than sponsors that's for sure.
Reasons are simple, unless the site has an exclusive twist or style, like Perfect Gonzo or Bang Bus there is bought content that will do the job.
I'm finding some sponsors are still using free content they bought 2 years ago. Any affiliate using that content will soon find out why freesites don't want it.
Sponsors will often buy on price when purchasing content for affilaites. They want a deal on stuff they will saturate.
If you can't afford to buy a $10 set you control it's use on, what you do with the traffic you drive with it and that is intended to get you sales then you are in trouble.
Free content will continue and it will have an effect. But is does not rule the traffic business. Webmasters making real money will continue to buy content and more will see the benefits.
Sponsors have the options of giving out hardcore and IDs and risk getting sued, or giong softcore and/ot hosted galleries.
On our paysite we will give out free content without IDs to non US webmasters and the free hosted galleries. All content will be updated all the time so our affilaites are not submitting old crap.
http://www.paulmarkhamteens.com/affiliates/