So why are programs closing? It's because..

[PR_Dave]

Most have lost their merchant accounts or the companies they were cross selling lost their merchant accounts.

The banks that were issuing the adult merchant accounts are seldom allowing new accounts to be created.

Also the real killer, chargeback VISA ratio is now at 1.5% from 2% for offshore accounts. It is anticipated that it will drop to 1%. That will essentially NUKE 80% of the programs out there.

Industry is about to shrink and I welcome it, so much pollution out there as it stands now.

[Amputate Your Head]

Industry is about to shrink...

Already shrunk. Industry is about to sink.

[gleem]

merchant account closing, lack of x-sell, lack of new ideas, bad biz practices, I think are all contributing factors, and overall more free porn makes it a bit harder to keep up ratios.


I welcome the shrinkage, however I think there will be more free porn sites being made because less paysites will be made as everyone tries to jump on the free content wagon to try to earn a buck. Maybe it will be good? I think in the end Dating sites and cam sites are the only things viable long term for the big bucks, unless of course you are putting out awesome exclusive stuff like you Dave!


side note: I got a new merch account to add to my portfolio over the last 2 months, so they are harder to get, but not impossible... but mine is US based, EU is impossible from what I can tell since I've been trying for a year now.

[BFT3K]

Already shrunk. Industry is about to sink.

Maybe that is the answer!

Who is filming the "dirty sink" niche for example?

Opportunity knocks...

[seeandsee]

the $$$ model they were pushing was bad, they know it, affs know it, but $$$ made them going on and on, now when they can't do it, we blame tubes

[datatank]

Its because most if not all are simply not as smart as Pr Dave the smartest man to ever dabble in adult

[Phoenix]

agreed....harder and harder out there...but those left standing will reap the benefits

[PR_Dave]

Its because most if not all are simply not as smart as Pr Dave the smartest man to ever dabble in adult

1% is going to be tough for even the smartest which I don't consider myself to be, I only have a GED

Thanks for the fake complement!

[BFT3K]

[dyna mo]

is that so? i was under the impression most of the closures were just the affiliate sales channel, many "closed" program's sites are still transacting.

am i wrong?

[Paul Markham]

merchant account closing, lack of x-sell, lack of new ideas, bad biz practices, I think are all contributing factors, and overall more free porn makes it a bit harder to keep up ratios.

Add to the list.
We charge $30 for something customers don't think is worth $30.
And won't change.

As for free porn, we led the way in getting free porn onto the Net and spent more money on it than the members areas. Maybe that has a contributing factor to members saying goodbye.

I welcome the shrinkage, however I think there will be more free porn sites being made because less paysites will be made as everyone tries to jump on the free content wagon to try to earn a buck. Maybe it will be good? I think in the end Dating sites and cam sites are the only things viable long term for the big bucks, unless of course you are putting out awesome exclusive stuff like you Dave!

If you charge $30 a month and can't compete with free sites, whose fault is that?

[TeenCat]

at 6bot it looks like bit another way ... more sites are up than closed ... http://6bot.com ... stop crying, adult business is much bigger than few american crosssales thieves ...

[kristin]

I also think piss-poor money management is a factor. People spent and spent and never really saved for a rainy day. Well guess what, don't you wish you invested in umbrellas with all that money now?

I know people who still have to pay themselves ridiculous amounts cause of their mansion they bought years ago, or the cars they buy for themselves and their ladies. I think if some companies had an issue or something that would cost a decent amount - there would be many more that go under for pure reason they had no money saved.

[gleem]

Add to the list.
We charge $30 for something customers don't think is worth $30.
And won't change.

IF someone doesn't think $30 membership is worth buying, they don't. That's why sites change their price points to see what converts the best, I have changed my pricepoints to reflect what does best with my traffic and my sites.

If you charge $30 a month and can't compete with free sites, whose fault is that?

I am competing just fine Paul, just takes more work and diversification. My sales have remained steady for years now. I was referring to two things, someone starting out new down the road, unless you were in the biz and dug in already, best of luck cause you will need it. As for myself, I know with the niche / paysite model that I am using now it'll take too long to be as successful and rich like you Paul, so things need to be adapted to be as profitable as you and all the other top dawgs like Dave here, topbucks, playboy, etc..

[baddog]

Its because most if not all are simply not as smart as Pr Dave the smartest man to ever dabble in adult

QFT

I also think piss-poor money management is a factor. People spent and spent and never really saved for a rainy day. Well guess what, don't you wish you invested in umbrellas with all that money now?

That has always been a problem with adult. Too many people that never had to consider "what if" when it comes to money.

[CurrentlySober]

Who is filming the "dirty sink" niche for example?

Nahh... Its the Erotic Falconry niche thats hitting the spot for me $$$

[Paul Markham]

IF someone doesn't think $30 membership is worth buying, they don't. That's why sites change their price points to see what converts the best, I have changed my pricepoints to reflect what does best with my traffic and my sites.

It's not what works for you, it's what works for customers that counts. And obviously they way they're diminishing we have got it wrong.

I am competing just fine Paul, just takes more work and diversification. My sales have remained steady for years now. I was referring to two things, someone starting out new down the road, unless you were in the biz and dug in already, best of luck cause you will need it. As for myself, I know with the niche / paysite model that I am using now it'll take too long to be as successful and rich like you Paul, so things need to be adapted to be as profitable as you and all the other top dawgs like Dave here, topbucks, playboy, etc..

I know you are. You're marvelous.

But for the industry as a whole times are hard. Even for those who have been here a long time and dug in. As a content provider I get a much wider view of the industry than most.

Nice spam from you though.

[baddog]

Nice spam from you though.

Man, the irony . . . .

[MrDeiz]

actually there's not a single closed program i regret

only really business determined programs should stay, all that shady and phony shit should go

[pradaboy]

Let it shrink, much needed clean up.

[B2BwithJoeD]

Europeans Billing Europe!

QFT - Quoted For Truth

Prepare for a new round of innovation

[GonZo]

QFT - Quoted For Truth

Prepare for a new round of innovation

Joe I need to set up that call before your swilling mojitos from the bucket this weekend.

[SykkBoy]

A lot of companies have spent years chasing the tail and it kept getting shorter and shorter and they didn't/couldn't adjust....

[IllTestYourGirls]

This is what recessions do. It weeds everything out, cuts down the dead big trees and allows new growth.

[gleem]

It's not what works for you, it's what works for customers that counts. And obviously they way they're diminishing we have got it wrong.

Again, businesses that don't adapt their pricing to reflect the demand have it wrong, if I however adjust pricing to several price points, and 1 does better than the rest, I have a sweet spot, and it's never the cheapest price that does best.

I know you are. You're marvelous.

Thanx Paul, appreciate the vote of confidence

But for the industry as a whole times are hard.

that's what everyone keeps saying for the past 10 years and to some extent it's true if you are trying to do the same thing year in and year out.

As a content provider I get a much wider view of the industry than most.

Shooting content gives a real insight into everything this biz is about, you do get a much wider view than the rest of us who build sites, manage traffic, manage content buys, shoot ourselves, buy/sell traffic spots, and sell membership to our own sites. You can see what the market needs before other people can and you capitalize on it, making yourself a fortune to boot.

Nice spam from you though.

Any chance I can get...

[Trend]

Paul.. always appreciate your posts. May not always agree but always agreeing is never healthy

On this price point issue I have to disagree on numerous levels. The main being this. We did beta test reduced price points. From gallery offers to social campaigns and everything in between. The bottom line was this: Reduced pricing did ZERO to the # of daily joins and number of people who rebilled . What is did do was devastate the test sites profitability.

[Martin]

Because they weren't using Member Channels :P

[The Porn Nerd]

Paul.. always appreciate your posts. May not always agree but always agreeing is never healthy

On this price point issue I have to disagree on numerous levels. The main being this. We did beta test reduced price points. From gallery offers to social campaigns and everything in between. The bottom line was this: Reduced pricing did ZERO to the # of daily joins and number of people who rebilled . What is did do was devastate the test sites profitability.

Same thing here. We tried $24.95, $19.95, $14.95, $39.95 etc. For US the 'sweet spot' is $29.95. A dollar a day is GREAT value for what a member gets, still one of the best entertainment values around.

Anyway, changing prices did ZERO in terms of boosting sales/rebills. Someone who wants to buy will pay a (reasonable) price. plus, you have to factor in affiliates and model splits to that $29.95; go any lower and there's little to no profit left for Mister P.

[AmeliaG]

Nahh... Its the Erotic Falconry niche thats hitting the spot for me $$$

I would totally do a whole erotic falconry front end, if someone offered me enough content for it.

[gleem]

Same thing here. We tried $24.95, $19.95, $14.95, $39.95 etc. For US the 'sweet spot' is $29.95. A dollar a day is GREAT value for what a member gets, still one of the best entertainment values around.

Anyway, changing prices did ZERO in terms of boosting sales/rebills. Someone who wants to buy will pay a (reasonable) price. plus, you have to factor in affiliates and model splits to that $29.95; go any lower and there's little to no profit left for Mister P.

Same thing here, tried $15 - $39 and $24 was our sweet spot

[kristin]

Same thing here, tried $15 - $39 and $24 was our sweet spot

$24-29 is good for us. If you go too low, people think it's a gimmick or it's shitty, etc and don't want to buy.

Years ago I started the Wal-Mart pricing theory, doing off price points like $18.87 and weird ones like that. Worked well.

[Paul Markham]

Shooting content gives a real insight into everything this biz is about, you do get a much wider view than the rest of us who build sites, manage traffic, manage content buys, shoot ourselves, buy/sell traffic spots, and sell membership to our own sites. You can see what the market needs before other people can and you capitalize on it, making yourself a fortune to boot.

And who do you thing content providers sell to? Sponsors. We see their trend of what they can afford to buy for the members areas, exclusive and non.

And who do you thing we mix with? Other content providers and we discuss business.

So are you saying sponsors are making a fortune?

Paul.. always appreciate your posts. May not always agree but always agreeing is never healthy

On this price point issue I have to disagree on numerous levels. The main being this. We did beta test reduced price points. From gallery offers to social campaigns and everything in between. The bottom line was this: Reduced pricing did ZERO to the # of daily joins and number of people who rebilled . What is did do was devastate the test sites profitability.

No Trend I said the customers, as a whole, don't think what we sell is worth what we charge. Mayne because we still sell what others give away for free. As Gleem says we need to change.

[Robbie]

Strange...I haven't seen any paysites themselves closing. So they must be processing somehow. All I see are paysite owners dropping us affiliates and closing the affiliate program because it's no longer profitable.

[OY]

Most have lost their merchant accounts or the companies they were cross selling lost their merchant accounts.

The banks that were issuing the adult merchant accounts are seldom allowing new accounts to be created.

Also the real killer, chargeback VISA ratio is now at 1.5% from 2% for offshore accounts. It is anticipated that it will drop to 1%.

Quoted for truth.

Third party processors like Epoch, Commercegate, CCBill, Segpay, etc. most likely are picking up a LOT of business right now.

[Brujah]

re: price points, SuicideGirls is still very cheap. I wonder how many members they have and how rebills looks.

$12 per month
$24 for 3 months
$48 for 12 months

http://suicidegirls.com/join/

[pornstar2fag]

so how are you currently slamming your cards?

[amateurbfs]

re: price points, SuicideGirls is still very cheap. I wonder how many members they have and how rebills looks.

$12 per month
$24 for 3 months
$48 for 12 months

http://suicidegirls.com/join/

Suicide Girls and Gods Girls are unlike typical adult member sites. They are communities inside, all the girls interact, it's like a myspace almost. I have been inside the member's area for both and they are like nothing else and totally active.

[gleem]

And who do you thing content providers sell to? Sponsors. We see their trend of what they can afford to buy for the members areas, exclusive and non.

And who do you thing we mix with? Other content providers and we discuss business.

Just because a sponsor orders 100k worth of content 1 year and $20k the next doesn't mean they are making 80% less money. I've known plenty of sponsors to buy assloads of new content just because they weren't making enough and needed to launch new sites to bring up their bottom line.

Maybe sponsors are happy with their library of content and don't need much more. Maybe they are shooting in house? Maybe they are monetizing what they have already and shifted their content purchasing budget to media buys. Maybe they are simply less frivolous with their extra money and are saving it like the rest of the biz's in this economy? Maybe 5 out 10 of your clients are broke cause their sites sucked, and maybe the other 5 are happily making a pile of cash and ordering more. I dunno, but I know for myself I'm buying content no matter what.

So are you saying sponsors are making a fortune?

I don't see how you got that from my post, I was referring to you making a fortune of course, but now that you mention it, I know plenty of other sponsors I do biz with that are amassing fortunes regardless of whatever "boogiemen" people post about.

[gleem]

re: price points, SuicideGirls is still very cheap. I wonder how many members they have and how rebills looks.

$12 per month
$24 for 3 months
$48 for 12 months

http://suicidegirls.com/join/

Right, and they don't have much to do with affiliates and have given many "fuck you's" to the few they had trying to promote them. Completely different biz model, site model, and hats off to them for carving out a slice of the biz that broke the molds, obviously as many know despite the way they treat their models.

[Supz]

or they are just closing affiliate programs hoping enough people dont take down the links and keep getting sales they dont have to pay people on. that could be possible couldnt it for some of them?

[andrej_NDC]

And also, some companies thought its a perfect time to get out of the affiliate model and keep all the rebills, so they boosted their net profit a lot. And they know they won't get much bad publicity as they can blame it on the current economic situation and there are so many programs doing it, so why not do the same and be forgotten fast.

[$5 submissions]

Any chance of further restrictions re rebills?

[kristin]

Strange...I haven't seen any paysites themselves closing. So they must be processing somehow. All I see are paysite owners dropping us affiliates and closing the affiliate program because it's no longer profitable.

And they also have to have the backend to support the joins. So pretty much, programs are just not paying the affiliates. Processing fees, hosting, backends (if leased) - those are all paid for monthly.

[tiger]

Most of them aren't closing they just stop paying affiliates. All the sites I have seen are still up and running and still billing customers, they are just increasing their margins by cutting out the expense of actually paying all those pesky affiliates.

[JFK]

agreed....harder and harder out there...but those left standing will reap the benefits

agreed

[The Porn Nerd]

If I stopped paying affiliates I'd be out-of-business in a month. 70% of my sales come from affiliates, at this point.

GOD BLESS THE AFFILIATE!!!

[RogerV]

that is why I pay people to watch porn now.

[tony286]

I also think piss-poor money management is a factor. People spent and spent and never really saved for a rainy day. Well guess what, don't you wish you invested in umbrellas with all that money now?

I know people who still have to pay themselves ridiculous amounts cause of their mansion they bought years ago, or the cars they buy for themselves and their ladies. I think if some companies had an issue or something that would cost a decent amount - there would be many more that go under for pure reason they had no money saved.

Good point.

[NaughtyRob]

I think the reason that works well is that they forget about it easier on their bill, it doesnt look like a recurring charge.

Years ago I started the Wal-Mart pricing theory, doing off price points like $18.87 and weird ones like that. Worked well.

[Nathan]

Quoted for truth.

Third party processors like Epoch, Commercegate, CCBill, Segpay, etc. most likely are picking up a LOT of business right now.

This is likely one big reason why so many affiliate programs are closing... Their margins are going down. By around 10% and they already were operating very close to their limit with pps.. So now they have to drop affiliates since it was simply the non aff traffic which was paying for the aff at this point... So why keep them...

They simply did bad member value calculations or inflated them to be able to pay more for pps...

Bad math, never works...