Are We Working for A Dying Industry?
 

Is it possible we are working in an ever-growing dying business? Think about ratios over the last eight years, from 1:100 to 1:1000ish, more traffic these days is less sales, as newer young adults get CC's they have already been exposed to millions of free pictures. Every day we all seem to "trade" traffic, exchange sales almost. We have massive groups of people that won't ever buy porn, and that group is growing as more free services come out.

So, think about over the last eight years, have we increased or decreased as an industry? I see nothing but an overall decrease in almost all areas of adult, so why do we continue to work for a business that statistically is dying?

And please do not come on this post and say oh well my site is rocking with 1:200 and spam your shit ? we know as an industry we are not doing as well as we once were. I?ve seen the post from the big boys all the way down.

So what?s it worth to you? From a big webmaster that?s making millions to a smaller webmaster starting out, is it worth the struggle, the laws, the slaps in the face to wake up to a 1:2500 ratio? I?ll admit it ? last week we woke up to some of the worst ratios we?ve seen in a LONG time. Hell, this year has been all over the board.

What are your thoughts?

Think of it as farming. The small independends are being forced out by the giants; the giants will continue to automate and thrive .

But I'm aware of the giants themselves ... and they have posted as well. I believe they are struggling just as much. They may have the funds from years ago, but I think their ratios are sucking just as much as the little guys are. They have to pump out sites to keep themselves at pace ... Notice at pace, not growing.

Free Sites have definately hurt sales for pay site owners. But I am not bitter at any free site owners as, free sites is as much now part of the industry as pay sites are to affiliate program owners.

We can't expect free sites to go away, we have to adapt.

Right now the adult online business is in it's consolidation phase, every industry has one. Automobiles had one in the mid 1920's where growth leveled off and consolidation and development of new technology and new incentives and new promotions were done during a 5 year perioid.

During that time is when the strong companies get stronger and the rest either get bought out or move onto other projects. There will be a consolidation phase right now may last another 3-5 years who knows, but after that is when we will continue growth upwards at an even faster pace then the last 5 years.

That's the way business cycles work, online adult is no different.

Good times are ahead for companies that endure the next 3-5 years and roll with the punches

worsening ratios scare me too... 1:5000 might be considered average in 2 years heh

i hope it wont come to that though

There are ways to make just as much money in a saturated market. Just have to innovate new marketing angles and know which niche's are hot.

99% of the industry are followers, not waking up figuring out how to market something brand new to people. So the pizza pie gets sliced into crumb sized pieces. People still want pizza, but you've got to figure out some new toppings.

*leaves thread*

Yep, for sure.

One comment on this topic.

The low cost of entry will continue to hurt our industry for years to come.

Making $20 a day is a joke for a US Webmaster. However if you were from Macedonia that's more than the average person makes and in the end it's worth working 8 hours for that $20. I think what we'll continue to see is big business being run in the US however less and less smaller sites in the US. As the profits go down and making a dollar becomes tougher i think some US webmasters will either step up or step out, meanwhile the number of NON Us Webmasters will continue to grow.

With tgp submission I am averaging 1 in about 450 to 600 and that is not bad. and that is the same for several differnet programs. with banners flying on peoples sites just placed in niche spots, we have seen sales in as low as 1 in 12 to 1 in 90 from the same affiliate every month. he sends between 12 and 90 clicks a month, and gets 1 sale, and sometimes 2.

it just depends on how you run your sites. How you filter the traffic.

everytime I think something is wrong god ratios and new ideas kick me in the ass and ask me wtf was I thinking

More free photos...
More free vid clips...
More free cam shows...

All add up to one thing....
More girls want to grow up to be whores!

And with more girls flooding the market place...
They price on vagina and colon gets cheaper and cheaper.

Hate to say it...
But that's the way the business models are going.

I personally say that there is no more money to be made in porn and everyone should get out immediately.

except me and a few people i like.

Welcome to marketing 101, the days of a pioneering industry are gone. This is now a competitive phase industry complicated by the amount of FREE content out there forever. As KRL said you need a better mousetrap to catch more mice.

This is probably one of the major reasons for declining ratios.

I disagree with the main comment that young adults will never buy porn. They won't buy porn now. However once they are married, have kids and life has changed they will be interested in porn again and not the cheap shit they used to look at. They'll have the disposable income and will be looking to spend it on some high quality porn they never got to see when they were younger. I believe alot of people return to porn for the prospect of seeing something they've never seen before. Same reason guys turn their heads when they see a hot girl. They've seen a million hot girls yet every hot girl that walks by guys check out. Why? I think a large part is the prospect of seeing that one perfect woman. Same reason guys are drawn to sports, the chance of watching that one amazing moment that goes down in history. I think alot of the young adults will feel they probably didn't get to see the best porn when they were surfing for free and once they are middle aged will be ready for it. Who knows i may be wrong.

As an industry we slit our own throats. People blame free sites and free content as the death of our business. Paysite members rip, distribute and share our members area content making our pay content, free content. It sux.

Bigger companies get stronger because they can spend the money to buy sites & programs. Doesn?t it bother you to know that, if you want to keep growing you have to buy out sites and programs? Even those will dry up, then you buy more.. Always trying to keep your numbers at some level.

As ratios get worse, you have to buy and drop money to just stay at the same level. To grow you either found your one niched site that rocks, or figured out a slick way to market your new products.

Every niche, ever site, fights for the same bubble of traffic and sales.


If you notice, almost every company is going automated, dropping staff and expenses (adverts, trade shows, etc), they bring in cheaper, better working contract staff.. So for me to grow 30% this year, I gota work some magic and spend a good amount of money to assist me. Or? I can easily cut 30% of my expenses. Many programs working a 10% profit margin, people are starting to find out that increasing 10% costs a ton of money, but getting rid of 10% of expenses is better money.

Its all in how you package the product.

Sex has been selling since the beginning of time in one form or another. The delivery methods are where you see the revenues.....

I was just thinking about all this the other day and I have come up with a theory.

I believe the only thing that really matters is how much money is made in absolute terms - conversion ratios are often misued as a gauge of performance. A few key points:

- I think the velocity of traffic has increased almost exponentially in the adult internet. That is, the amount of clicks-per-surfer-per-session has skyrocketed due to the TGP. I think there should be an index of traffic based on velocity where velocity is a function of clicks-per-dollar-spent. For example, TGP traffic has high velocity - that is a user will have a high number of clicks per dollar spent whereas very targetted SE traffic for example has lower velocity - people know what they are looking for and when they find it are likely to buy.

So, if 7 years ago converions to site X were 1:100 and are now 1:2000, one has to consider the sources of traffic at those two points in time. I will bet you that when the ratio was 1:100 the traffic was more heavily weighted to low-velocity traffic. Nowadays, there is such a high volume of high velocity traffic, that the proportion of the traffic send to site X is high velocity, and therefore has a worse conversion ratio based on the clicks-per-$ of the surfers.

For the industry as a whole, we can say that rising average conversions can be related to an increase in the average velocity of traffic.

:1orglaugh :1orglaugh :thumbsup

I have to say I haven't seen this as much as this post is indicating. In 2005 we added 17 new employees, started a new office, didn't add any sites, didn't do nearly as much as I wanted and yet we were still able to more than double both revenues and profits. This year we are looking to add more staff, more sites, and I am quite confident we will again double both revenues and profits.

On Twistys we haven't added a tour in 3 years. Haven't changed our gallery layout in 2 years and yet our ratio is in the same range it was 2 years ago. I'm not sure if it is our niche or what. I believe had we had more staff on earlier and had been able to launch more tours and galleries we would have improved our ratio and sales much more than we did.

I will say on our freesites i have seen the drop in ratios on sites we don't control the advertising for. When we control the advertising the sales have been rock solid. When we go with the FHGs we do terrible.

Note.. we plan to update our tours and come out with new tour designs at new designs our FHGs in the very near future :thumbsup

I will say with the majority of the industry using Ccbill and Paycom that can't help. Their blacklist grows by the day and while that helps us all long term it can't be helping signup ratios.

i hate this subject, tho i somewhat agree with kristin, even tho i had my best week in my 8 year career 2 weeks ago, still tho overall i think it's slowly dying but i think it can only be capable of dying down, not dying completely

Speaking from the perspective of a hubby/wife team ... our sales have gone up every year since 1998, however, we do have to work much harder for it now. Including purchasing paid spots. My opinion is this .. the day of the mega site of just pictures and movies is over. Surfers want interaction and the ability to feel "part of a community", Women that run their sites with interactivity and real personality will survive. People buy them because they are "real" i.e. meaning the woman is really at the other end of her email and really answering it herself. With interaction through cams, blogs, forums, chat & personal meetings at social functions the members (or potential members) really feel they get to know her.

Bottomline for us .. potential members are much more loyal and willing to spend if they feel part of community.

One main difference now is that you have to give the member good value for their dollar. Surfers are more and more educated and the days of updating a paysite once a month and not reinvesting in it are long gone. Which definitely has lowered the profit margins. I know our monthly content costs are absolutely sick and would shock most people. However that's what keeps our members happy so we continue to do it.

Although the industry has always been subject to up and down trends, having been in the game a long time, I tend to agree that there's an overall decline in the profitability. At least from our perspective.

There's no one single reason for it, I think there are many factors involved. One of the main reasons I blame is the large amount of free content available out there. And we're all guilty of it, one way or another. Another reason is that although there are more and more people gaining access to the web, more people are also purchasing their own camera gear for producing cheap content - the digital revolution has made it very affordable to spend a few hundred bucks and attempt to become an online entrepreneur.

Another reason is the shady business owners who rip off customers, one way or the other - causing consumers to become more wary of how they use their plastic online. Add to that hardly a week goes by that we don't hear a data security breach somewhere along the line.

Then there's the poor currency exchange rate with the U.S. dollar (for those of us producers outside the U.S.). Here in Canada we've lost over $0.40 cents on the dollar in the past two years - and that amounts to a helluva chunk of change to absorb.

And of course there's the constant legal pressure from the feds and moral minority against us all. Transaction processing becomes more and more costly and difficult to maintain with each passing day.

And last but not least, there's also an incestuous production factor at work. So much of the stuff starts to all look like the same shit after a while. There's very little innovation or groundbreaking work being done (for the most part - not all). A lot of websites start to look the same, routine and formulated clones of each other. I can't help but think a lot of surfers start to develop a desensitivity to it all - 'seen one...you've seen them all' mentality.

Just a few thoughts...for what they're worth. :cool-smil

Hey Shap.. Your niche and quality keep you and many others going well. Hell, with any of us still doing this, we have at least one or two things making us some damn good money.

Gota look at the overall, not one company or one site as an example. I may be rocking and growing doing one thing, but how long will that ?one thing? last? Which is why you have to look at the overall picture.

Yes, I'm not saying it's completely going to die ... it's just slowing down. And it's tougher to gain new sales.

And as someone said below you it's a lot more work than it was years ago.

And my main point to it all was is ... is it worth it to you? And for what? I'm not sure what you all make a year and I don't care personally, some make millions, some make tens of thousands.

That was more my point ... As a US webmaster, it's getting to a point to where it's not worth it to ME. I'm a 25 year old mother of two with a double MBA ... I really prefer not to be in porn for the rest of my life and have said that from the get-go.

Chris (TheDoc) owns our company, it may be worth it to him, but not ME, so these are my thoughts, not the thoughts of EGC or anything, so please don't take them that way.

1:100 years ago versus 1:1000 today. well if you look at the fact that there are more than 10 times the amount of people on the internet today than there was even a few years ago, then you are converting the same people and more now.

A lot of good responses and input so far. :thumbsup

Diversify. I move every dime I can into my mainstream projects. I love porn. I love the money I make from porn. I know it'll never go away. But shit will change. So I diversify.

I know what ours is monthly ... so I don't even want to guestimate what yours is .... fucking sick.

BTW ... when you gonna pick up the BoobPlugin.com? We can template it to look like Twisty's? Seriously ...

But I know you don't do plugins ...

It's not slowing down. Porn is bigger than ever.

The pie is just getting divided into smaller pieces for the independent webmasters because there are hundreds of thousands out there.

Like I said you've got to be different, make your sites interesting, and get other people making you money as well.

I agree. There are very few companies that stand out from each other. Most companies are using similar tours, similar galleries, similar cash program designs. That is a problem. However I think if times get tougher and tougher two things will happen. 1. People will either go out of business (which has been happening more and more in the past year). or 2. step up and start differentiating themselves. When that happens everybody will benefit. As long as the money is good I don't think we'll see many people putting in that extra effort which is great for those of us that do because it's more $$$ for us :thumbsup

I'm too much of a control freak to do plugins. If ever i get counseling and am able to reverse that you'll be the 2nd plugin i'll contact (Phil from Itsyourporn 1st because he's my boy :winkwink: ).

i totally agree, and yes it is much more difficult nowdays especially for new ppl trying to get in the biz imho

I'll accept that cause Phil's cool. I appreciate your answers and someday I hope to meet you Shap. I've heard great things about you and your program from TheDoc and other program owners.

I sat at a dinner last year in Miami where you incredibly missed ... you better be there this year is all I'm saying. :winkwink:

Honestly we haven't noticed any change on the ratios for the last 3years or so. We experience a steadily growth but we do work a lot and smart for this to happen. Unlike Shap, just the last year for tours we DIDN'T use we spent an easy $40k. Has to be niche related, because we work on ratio droping trends all the time to maintain good ratios.

Members have become more demanding than ever. They are educated and they shop around, compare and of not satisfied cancel/request refund or do a CB.

Some personal perspectives:

Back in '99 when we launched our first site, we were in a fortunate position of having very unique content for a novelty niche we basically helped to create. No one else was producing the kind of content we were back then - so we enjoyed a virtual monopoly for a while.

And since I'd been creating the content since '95 and 'seeding' Usenet for a few years, we enjoyed a massive traffic flow literally from the first day we opened. After a few years we were pulling in a six-figure yearly income from it (during the height of the good currency exchange rates). Our production costs were based on a shoestring...the majority of which consisted of my own time and labour.

Unfortunately, these days our niche has become clogged with a lot of competition - and many producers of similiar content have raised the bar and set higher benchmarks. Usenet has also dried up as a valuable promotion venue (for the most part). And since the content is still a rather unique (and narrow) niche that defies categorizing, it doesn't promote well on most mainstream TGP sites.

The novelty has lost its appeal for the most part - and lately we find ourselves scrambling a little to come up with a way of re-inventing the wheel...finding the next pet rock or mood ring.

The online dollar volume being spent in the US has continued to explode. tons of people are online, then they got DSL and got used to using the card. Adult has to still be expanding. It is going to be hard or us to contract and get dog eat dog with an ever larger pie.

I saw ratios go to hell when hitbots were all the rage. Now that foreign traffic is the fastest growing sector, they suck again. It will continue to suck as that group is growing. Wait a year or two for this thread to be true.

Absolutely correct.

There are a 140+ major sponsors and 9,000+ websites each handwaving for market share. The problem with pornsites these days is each one is trying to brand themselves as independants as you've just so eloquently pointed out. Not the way to go :2 cents:

A consolidation phase is emerging where large sponsors will gain their surfers loyaly by branding all their sites accross all channels (BangBros). Similar to what the private labels do with clothing.

The brand is everything. Do not forget that. EVERYTHING :) (Disclaimer: This is my opinion. Feel free to shoot me down anytime though.)