sites can be done for 5k easlily if you just buy a bunch of dvd content like many companies are doing now

I'll take a look at this for sure.

its me man..im hitting you up now

15 000$ for an exlusive pay site

Naah, easily $100,000 or more for an exclusive site. I know somebody who knows somebody's brother that spent $1million on an exclusive site. Now that's what you have to do if you really want to convert and make money.

Yeah right.

Jeezus guys, some of these numbers are crack smokeable. :uhoh

We've been in 3 positions on costs of starting a paysite
1. Produced exclusive content for a number of companies to start-up
2. Produced exclusive content for a number of companies to partner with us for start-up
3. Produced exclusive content for US to start some sites.

Costs:
1. SilverCash and TopBucks spend $25-40K just in content to start an exclusive reality site. I'm sure they already have their programming and scripts in place for the affiliates and members areas. They do budget extra $$$, not sure how much, for advertising and promotion of the sites. Think of the ads and parties you see when the big boys launch a new site.

TushyCash started out with cheaper content costs, about $10k, but keep rolling that over for more and more content to keep their niche customers coming back, my guess based on what they've ordered from us and other producers we know, about $150k just in content.

2. We've partnered with numerous companies. I know my cost to produce 25 hardcore reality episodes of BikiniHookups.com is $34k. That's talent costs, camera crew, editing, encoding, and general expenses, not including a breakdown of our fixed expenses. Gamma spent an unknown amount of dollars to build the site, integrate it into their system and promote it. We share the profits after affiliate payouts 50/50.

3. My own sites are niche related, costs are $50-$100 per scene, and we've started with 40-75 scenes per site. Designs were $750, software for numerous things was traded for custom or exclusive content, our cost about $3k, we already had our own servers and just bumped the bandwidth. Traffic budget is $5k a month and we're rolling over sales income into more traffic deals. Plan is to test with various traffic for 6 months, add a new site a month, then push for affiliates.

Bottom line is: A paysite, no matter how much or how little you put into the intial investment, IS NOT a get rich quick deal. It's a long term business committment that takes constant fine-tuning and work. Only those that have the persistence to test constantly, analyze results daily, and re-invest to make the project better, will make ANY profit.

Very insightful. Thanks!

nice! :thumbsup

I like that Greg guy. Real numbers from top to bottom. Cheers PG :drinkup

That is a good question. Prior to launching our program, I did a pretty extensive spreadsheet based on two programs with various payouts.
They were 60% revshare, PPS with 25.00, 30.00 and 35.00 payouts.

Consider these variables:

$3.95 trials
$34.95 full memberships
14% CC processing fees

Assume you have a 40% trial conversion to full memberships and each month 60% of those full memberships continue to rebill.

Lets evaluate how much 50 trials are worth.

50 trials less processing fees: $170.00

50 x 40%=20 full memberships: $600.00

Month 2 - 60% of those 20 will rebill which is 12: $360.00
Month 3 - 60% of those 12 will rebill which is 7.2: $216.00
Month 4 - 60% of those 7.2 will rebill which is 4.3: $129.60
Month 5 - 60% of those 4.3 will rebill which is 2.6: $77.76
Month 6 - 60% of those 2.6 will rebill which is 1.6: $46.66
Month 7 - 60% of those 1.6 will rebill which is .9: $27.99

Total dollars earned from those original 50 trials after 7 months: $1628.00

The value of those 50 trials is worth $1628.00/50 trials or $32.56 each

The question affiliates should ask, is what is the value of each trial not what is the value of each member.

If I was to pay $30.00 per join, I am left with $2.56 per join after 7 months.
Don't forget, that is $2.56 per join using the variables of 40% trial conversions and 60% of those continue to rebill each month.

So the question is, will $2.56 per join cover all the overhead costs of running a paysite? I think we know the answer is no. If the answer is no, then how can there be so many programs out there that offer these outrageous payouts of 30.00 - 45.00 per join?

Yes I know, I can earn dollars on exits, cross sales, upsells, email cancelled members...etc....I have figured that into my spreadsheet as well. So then that must mean these programs are making their income based on these other means of generating revenues. Hmmmm, really?....makes you scratch your head.

great post Alex. Let me add to that the average PPS doesnt do any email marketing at all and their upsales is a banner or text link. These exits must worth a lot these days .lol

If I add more exits and a few more banners in my members area, I too can maybe throw an extravaganza at the next internext....lol

A 40% trial to monthly you are being very generous.

many sites who pay per SU have trials rebilling at $40, so it would look like
$170
$700

420
245
150
90
50
35
=
1860 / 50 = $37 + exits, usells, cross sales, mailings
So the result is, that a program with a good retention can easily pay high amount of $$$ per SU, programs with a bad retention...I dont know...:)

You cant have a guaranteed 40% to full membership on generic traffic coming from various sources no matter how good is your members area. It's not different from the way ifriends credit you future sales. They adapt the sales they credit you based on your traffic quality. Bottom line, nobody will pay you more than what your traffic worths.

of course, its not that easy to have 40% trial to full conversions on all types of traffic, therefore I said, that programs with GOOD retention can pay per SU easily, others cant :)

maybe i should post some paysite passwords again like i did before christmas to see some of you what kind of content will retain at 60% :glugglug

Show me a program that 60% or more of their current members rebill month after month : ))

Even with a 40.00 membership fee + exits, upsells, cross sales, mailings, you still can't pay 35.00 PS....you might be able to get away with 20.00 PS

But you better have a 40% conversion and a 60% rebill at the minimum.

i hear naughtyamerica does something like 40% trial to monthly rebill

:anon :costumed- :Kissmy

$100 :anon

so alex do you even promote pps programs these days?

LOL you was the one who started with the 40-60% math :) I do not say, many programs have such good retention.

Excellent work

Isn't it the big boys supposedly with the crappy members areas that are always paying out the highest PPS?

Isn't it the big boys supposedly with the crappy members areas (which translates into bad retention) that are always paying out the highest PPS?

I'm seriously inquiring, not judging or condemning.

yes, some of them have really bad members areas...but for example if you get $5 NET on each sale(PPS program), its harder for a program that get 100 sales a day to pay that, than for a program with 5000 sales per day...they get the profits on high volume

I promote PPS and revshare but the PPS programs I do promote, I have a long relationship with and I don't get 30.00 - 35.00 PS...not even close.

The traffic I send to PPS programs are all from SE traffic too.

is anyone really doing 5k joins a day accept maybe the python crew

I know at least 2 programs with 5k+ a day, except ND/bangbros

It is all relative regardless if a program does 100 sales per day or 5000 per day.

100 sales per day with 30 PS has to pay out 3k per day or 90k per month

5000 sales per day with 30 PS has to pay out 150k per day or 4.5 million per month

What that tells me, you better have plenty of start up capital....LOL

Forget salaries and overhead....you need around 1.5 million in reserves just for a program that is doing 100 sales per day....lol

Numbers don't lie and never will...sorry but I minored in mathmatics....lol

yes, thats true, when starting a PPS program, the owner needs to have enough reserves to pay for the joins. Even a revshare program that start offering PPS needs to have tons of capital for the first months...

I'm just thinking that the actual number of sales per day wouldn't make a difference in profit margins because that would assume that the ratio in Alex's calculations changes at some value of sales.

For instance, even if the program is doing 5000 in sales it would still be losing in the end if we assume that 40% trial conversion become full memberships and each month 60% of those full memberships continue to rebill.

how can they lose money when they make $37 per sale only with rebills? As I heard before, PPS programs often dont pay on check, dialer and other revenue, so add another 20-30% to it + cross sales, upsalles, mailings(each member email is worth $3+ for sure)

if pps programs are shaving, what techniques are they using to shave so they don't get caught by an affilate doing test joins

the "sorry" method, you will make a test sale, it wont show in your stats, you make a thread on GFY about it or email them, they will add the join and tell you, we are sorry, it was a bug in the system and the sale wasnt credited properly. Everybody on GFY says what a great job they did (if they like the owner of the program) and after few days nobody remembers... :)

Exactly my point Mike...you will always lose reagrdless of how many joins per day comes through the program....if you net 5.00 per join, it is still 5.00 per join....LOL

I think you understand Mike : ))

Wow.... interesting. Some of you guys are paying way to much for exclusive content. God Im glad I shoot my own.

:) you dont see the difference? if you make 500 sales and then start making 5000 sales, doesnt mean that your costs are 10x like before, the hosting costs are higher, the content costs are the same, but the revenue is 10x higher.

so you say that 100 sales a day and $500 net profit is the same like 5000 sales a day and $25000 profit?