Tube Sites, Bandwith Bill, Conversion Ratios
 

Maybe I'm stupid, but I'm still wondering how tube sites could be profitable. As many of you know I'm running a few mid/bigger MGPs myself, and it makes me some nice money each month. But costs for servers/BW also eat ~20-30% from that each month, and I buy at ~ $9-10/mbps, and manage my servers on my own.

So I know that there's still cheaper stuff, let's say ~$6/mbps for bigger costumers, but somehow I still don't get it how Tube sites can produce a reasonable ROI each month. I doubt that the conversion rates on a tube sites are better than those on a plain MGP/TGP traffic, but since they're hosting their video stuff all by themselves, their BW bill must be much higher. And additionally you always have the risk of getting sued, or some other legal issues, which is also some kind of "cost". And wasn't it in the media 1-2 years ago that even youtube.com has issues to became profitable? And we know that mainstream traffic is worth a lot more than our porn stuff. So I'm seriously wondering how these sites make money.

Or is it just a hype a few investors started to get their sites big, and sell them later. And now lot's of people start to jump on the bandwagon in the hopes for quick money?

DISCUSS, tell me what I'm missing here.... :thumbsup

Mad monies in tubes... i know A LOT of tube site owners...

how do paysites owners make $$$ serving up all that bw ....?

Because they have paying costumers?

If 100k different people download a video from a paysite the owner had made ~$2-3Million gross. If 100k people download a video from a tube site the owner might be lucky to get a $35 sale....

Mad monies for the web hosts, they really must be partying over the latest trends :)

they sell spots for $15k :) price for the banner under the video :)

As for the Youtube thing, it was just a month ago they admitted they can't monetize Youtube traffic that well. It makes so little they leave it off the balance sheets.

I've been checking out redtube lately and it seems like they barely add any new movies each day so that may be somewhat telling. Plus, many of the "new movies" in that section have been on there for a while so they just recycle them.

For those that surf the other big tube sites, how many movies are being added on a daily basis? Any? Are they just recycled?

Either way, I'd have to assume they are making some profit.

Hmm, I see. Would be interesting how many upsells they have per 100k free downloads. As I see it free members are still allowed to download 20 vids per day. But that's for sure a nice additional income for Megaerotic.com, to cover their BW.
But how about all the other tubes, that try to make a living with just sponsor ads?

That's not really a tube as I see it, just a bunch of free cam previews that are used as upsells to a sponsor. That doesn't hurt the business, it's a creative way of advertising.

I've seen their prices a long time ago, and nobody with half a clue would buy for that CPC. You can even buy cheaper traffic from Google AdWords, and I'm pretty sure that Google's traffic is more valuable than YouPorn's traffic.
I doubt that they have many people that are unexperienced enough to buy for that price.

tubes are a bad investment :2 cents:

geez your smart.. www.tube8.com

As far as I know RedTube.com is just planned as a big bubble to blow up and sell to some idiot one day. The investors are located in Vienna. I think they're trying to sell it since ~ 6 months, but haven't found a buyer to this date (rumors).

And smaller tubes are paying a higher price per mbps too, as they can't buy that much in bulk either....

Sorry, didn't know, might be helpfull if you write in complete sentences the next time, instead of text snippets. :)

But then it's just a plain tube, that tries to sell something to their freeloaders. Their conversion rate doesn't improve 10-times just because they sell through a nice interface for their cam traffic, that doesn't make them much more money, maybe an improvement of ~ 10-20%.
The only reasonable way I've seen so far is the "Premium Member" up selling that MegaErotic does, but looks to me that they even had to start their own billing (Megapay) therefore, as they've found no one who's willing to process their stuff. That's not an option for 99.99% of smaller tube site owners out there, they'd still have to stick with income from sponsors, and hope that they'd make enough sales.....

Would be interesting to have a legal tube owner in here, to tell us something about his conversion rates, and what percentage of his monthly income goes to web hosting. That way we could elaborate how much the illegal tubes are making, or not making....

I personally think its all hype, however, I'm not fully sure...

tubes are in their decline stage. check alexa charts. :thumbsup

So doubt that would seriously happen and be correct info. Few would be willing to show they are either failing, getting no traffic at all, or well we all know the story.

I am very tempted and in planning mode of setting up a legit tube, toss crap loads of traffic at it and just see what the numbers really could be. Of course I will do my best to monetize it as best as I can to send as many clicks as possible to sponsors. Yet to run the test properly I really think I would have to have plenty of cams and dating sponsors as well. Will be interesting regardless, yet I expect great failure when it comes to time versus cash.

Hmm, could also be because more and more sites are popping up, so the traffic spreads out to more sources. I think surfers love them, I'm visiting them too every now and then. But I doubt that they're profitable, especially the smaller ones that have been created by webmasters that tried to jump on the bandwagon. They don't have the budget to monetize their sites as well as i.e. MegaErotic does, they aren't large enough to make special, higher paying deals with sponsors, and they pay more per mbps at their hosts as they don't buy that much in bulk. So it must be even harder for them IMHO

what you're missing is the long run, even if they aren't making any profit right now, they can sell tomorrow morning and keep making money for the next 5 years off rebills + revshare cam sponsors and I'm not talking making $27.92 per day either

OMFG, do a mouse over on the webcam cash banner in the quick reply box - that's the most irritating shit I've ever heard in my life !!! hahaha

I think cam/dating sponsors is the only way to go with tube sites, otherwise it would be like selling ice on the north pole. Cam and Dating is at least like flavored ice cream.

If you can't make coin with a legal tube site then stick to blogs and tgps.

Well, as a seller of a script for tubes, I think you're one of the few real profiters of the tube hype. :)

Your right. My wareztraffic only converts on dating and not too bad.. :thumbsup

I agree ... its better to buy Google traffic ... or even some extra exclusive scenes ... more scenes ... more galleries ... more promo content for affiliates ... more traffic ...

I am damn near sure you are 100% right on that. However as a paysite owner I want to check the numbers and the possible BS I hear about how it can and does still sell memberships. After all who else is giving all these new legal tubes free content to use in order to get some sign ups right?

So I figure it will be built to sell memberships but several areas with non sponsor provided content will be full of the standard cam and dating spots. Just so I can see the real differences in numbers and if there is enough justification in it all.

I personally do not see much issue between 4-5 15 second clips versus 1-2 minute continuous clips as long as they are done right. In theory the numbers should not be terribly different than what one would see at a MGP (hosting aside). I just really feel this will not be the case and I think it attracts even a more different type of consumer all together. They type that are pretty hellbent and trained on not paying for shit. Hell I do not even think they would earn that much on average at a cam site so I will be running a combo of revshare and PPS. Again I really think PPS will kill out revshare on that too.

Yes I am highly pessimistic about this but I will try hard with a goal of making it profitable. I also would love to be wrong.

Sorry, but that's a flawed business model.

- At first, if they make enough sales to be profitable over a timeframe of 5 years, then there has to be a point when they'd have to be profitable by running the site too. So it wouldn't be neccessary to sell the site, or close it down in case you don't find a buyer.
Or in other words, if you run the sites long enough, they'd have to become profitable some day. If you don't have that perspective then you've lost money, you're just loosing less if you close the site right now.

- And second, imagine what kind of ROI we're talking about here. If you invest let's say $20k in money and work time in a tube, run it for 2 years without any financial losses, only with investing your time ($20k at least for 2 years part-time), and then close it to live off the rebills, I'd say you make an return of ~30% on your initial investment over 5 years. That's about 5% per year, you'd be better off if you'd have put your money on a savings account, and you'd be much better off if you'd have spent your time with a normal job, or a better project.


I mean, I'm working to make money, I don't like to spend my time with working for free, and trying to break even on my BW bill.

Well, maybe you've already answered yourself by saying "Yes I am highly pessimistic about this but I will try hard with a goal of making it profitable. I also would love to be wrong."
Maybe many site owners think the same way when they give out content, and the fear of loosing affiliates is an more important argument to them than the fear of dropping conversion rates.
And there's some kind of group dynamic, it doesn't make any difference if sponsor A gives out content or not, conversion rates will drop anyway if sponsors B-Z give content out, sponsor A will only suffer from loosing affiliates to Sponsor B-Z

But to be back on topic again, I have to say that I think that legal tubes can make a profit, but I'd guess that ~70% is spent on bandwidth. And illegal tubes, with full size videos can be lucky if they break even IMHO

Hey I just really need to know numbers myself.

I also have yet to give out tube content for my personal paysites. Not enough to justify it in my eyes. It shall wait until I see my own numbers from trying a site. I am not going to just do what others do. To many programs go to shit or end up with no cash following that model.

Wasn't meant as criticism, I was just thinking that many paysite owners give out content cause the market forces them to do so. That's why some kind of overhead union wouldn't be the worst idea in this industry, to be able to make at least the most basic decisions for the good of this industry together, but that's another topic. :)

I guess... :2 cents:

Well what I see there:

- can't upsell a sponsor teasers if giving away full length scenes right next to it - the surfer just goes for the longest chunk, it's like if you could get a free kiss or a free handjob, you go for the most there is

- I seriously suspect these viewers are in majority return viewers who also surf other tubes - what's there: cams and AFF, the same thing all over again on all the major illegal tubes, so I guess the conversions for aff and cams have to be suffering badly too

Having said that, I suspect most of the return traffic is turning seriously advert blind, not to mention lots of unfiltered crap (underage / university students from all around the world with bandwith) traffic..

- they basically trained freeloaders to consume their bandwith on full scenes and now when they make them come back frequently there is hardly a way to monetize it.

It's like gas prices.. pass on the higher X to someone else.

some seriously good points here

hjnet, those sites all run off of pre-paid spots. Back 3 years ago I used to get $6,000 for a text link on ampland. I would sell 5 or 6 of those a month. That was just to honest webmasters who wanted real traffic.

If I could easily make 30 grand cash every month in extra income off of the "good guys" with just a simple text link that should give you a clue right there.

Now talking about the pre-paid spots you see on Tubes? I had offers of 20 grand a month from one of our favorite dating sites. And that was when ampland had around 800,000 uniques a day.

The dating sites weren't interested in sales. They were interested in numbers. And building a brand. Which eventually led to their big half billion dollar sale.

And that is how tube sites make money. Pre-paid spots. Nobody is selling anything off of those sites. It's just a numbers game that leads to big money down the line for the companies that buy those spots. Gives 'em fake numbers to use to make real money somewhere else.

The guys who did it already have made their money. Smart. But now all the johnny-come-latelies are gonna have a much harder time trying to pull that same stunt because the very foundation of this trick is empty. No sales. As penthouse is apparently finding out now that their paysites are falling fast.

It's a cool game of smoke and mirrors for the advertisers on tube sites. But eventually money has to be MADE and not just scammed. I wouldn't give a shit about any of it except for the fact that it's KILLING legit sales to so many sites now.

90% of the webmasters that run TEVS make sales. Because TEVS hotlinks the videos from selected sponsors, it saves bandwidth for the webmasters.

Some webmasters complaine because they don't make sales, it's because they don't know how to sell. One of those webmasters only had the text link under the video as the advertising. That's not going to make sales. You need banners and "click here" blinking to get your sales. Putting up 50,000+ videos and only linking to the sponsor via a small txt link is NOT going to make you coin.

I completely agree, excellent post.