Originally Posted by After Shock Media

Reasonable gambles. The cost of investment if brutally small in comparison to most pay site models. Potential for a large profit margin exists even if the site only receives marginal promotion. Comes backed up with a exit strategy that will salvage most if not all of the up front content costs, that being if site fails they can always just close it down or leave it up and find a broker to sell out the content sets.

Bandwidth is cheap.
Initial content falls into the ranges of free to several grand. (free is if it is a rev share with the model, though this looses one exit strategy.)
If you are already established with a processor there is no extra costs to add a pay site.
Design can be done super cheap since many put little focus on it and outsourcing has driven the price into the dirt.
TGP and blog owners are addicted to new material so almost anything released gets some promotion.