Why Sales are Down
 

I've read a lot of theories as to why people are making less money and selling fewer memberships today than in years past.

I think most people have not realized the true reason for the change in the industry and the decline in revenues. There are actually a few major factors that have caused the declines for the casual free-site webmaster. I'll discuss the biggest one in this thread. I have a few more that I will discuss in future threads:

1- By far the biggest cause of reduced revenue are the credit card institutions of Visa and Mastercard. Adult Merchants and third-party processors are required to submit a transaction code that identifies their sales as "high-risk" and "adult-internet" Banks that are part of the system are free to reject such transactions. A recent article that I read indicated that 80% of attempted sales are now rejected. My personal experience is that it is more like 50%. In years past no sales were rejected for this reason. The result has been at least a 50% decline in available customers, and thus, a 50% decline in revenue.

It is actually more painful even than the numbers would suggest. I've heard talk of how many customers cancel before their trials end. In truth, most member sites will find that the majority of their cancels come from credit card declines - not affirmative user cancels. The reason for this is that the credit card companies have something called "velocity checks" Velocity checks instruct merchant banks to reject multiple transactions on the same card if those transactions are "high-risk" and/or "adult-internet" if the transactions are attempted too close to each other (as long as one month apart). Thus, if someone is charged $3.95 for a 3 day trial, a velocity check could mean that the card will AUTOMATICALLY get rejected for any other adult-internet charge for the next 30 days. This results in about 50% (from my experience) of all membership drop-offs between trial and full member.

2- Coming up next: Email Lists

IT'S BECAUSE THE TGP'S ARE GIVING AWAY TOO MANY BIG TOURS AND POPPING CONSOLES!!

Is this the first recorded PayPal spam on GFY?

How is he spaming about PayPal?

Actually, people have been saying that free sites give away too much content ever since the start of the industry. Truth is, they don't really give away any more now than they did back then (in relative terms - after all, membership sites are MUCH bigger and better now than they ever have been).

I don't think that too much free content is to blame. People who are going to pay for porn will pay for porn, and people who won't won't.

I don't see how newbies can make it today. If I was just starting out today and making all the newbie mistakes, there is no way I would be making any money.

Just reporting what I hear around here. :)

I have plenty of my own opinions on what's going on in the industry, but it's easier to type stupid crap in all caps. :)

I was a newbie a year ago, and now I am doing pretty well.

I don't see why it so much more dificult for a newbie to do well than someone who is not - everyone started off as a newbie. Sure it isn't as easy to become a hun or persian kitty, but there is still money to be made.

The thing that cracks me up the most is that most of the webmasters I see doing poorly are ALWAYS complaining and BITCHING about sponsors adding this and that - or too much free porn.

They think that doing things such as trying to get rid of sponsors that support free porn - and things like that are going to work. There is virtually no understanding of supply and demand among this group of people.

The vast majority do not treat their business like a business. I have never seen more unprofessional behavior than I have from webmasters. Accusing sponsors of shaving with no proof. Getting pissed off because your check is a day late.

Tons of people just trying to start their own TGP. Lots of gallery submitters - with no real business plan. I see galleries with average girls advertising petite stuff. Check out the ARS boards - people are talking about 1:10000 ratios. If you are doing 1:10000 with ANY SPONSOR - you are doing something wrong. I don't care what your excuse is - YOU ARE DOING SOMETHING WRONG SIMPLY BY SENDING 10,000 hits without a sale.

I know people who see how well I am doing and the ask what I do - I tell them - and they have this impression that it is easy.

"Oh sex sells - that is the best business to be in"

BULLSHIT.

It is a great opportunity, but if you don't have a plan to make money - how are you GOING to make money.

Most internet businesses fail. When you get into this, you have to have something to compete. If you do what everyone else is doing - you will go where everyone else does - the poorhouse.

Just my 2 cents

:)

Thanks, Chris.

A question for wiseoldone (or KimmyKim) or anyone.

Has online adult always been categorized as "high risk" by the payment processors from day one, or was that risk rating earned by all the fuck ups in the industry?

It was probably developed after Visa and Mastercard noticed 99.9999% of people were doing chargebacks to adult sites.

take these numbers as examples

1997 - 1 million people online, 60% have credit cards
2002 - 20 million people online, 10 % have credit cards

Lets face it, every day, more and more people are coming online from countries that cant pay. Traffic goes up, conversions down.

Those numbers by the way are not actual numbers, just used as an example.

I'm sure the fuckups had plenty to do with it. Not to mention all the scam sites which would charge people who cancled, month after month after month. I think there needs to be a worldwide payment method for the internet, especially with the new influx of foriegn traffic to the net.

Visa has always considered adult to be "High-risk." HOWEVER, it has only been in the past 12 months or so that the processing system has had the capability of transmitting this code (and also charging the merchant). The code submission is now mandatory, and merchant banks and merchants who circumvent that code transmission are subject to major fines.

So, really it has only been in the past year or so that transactions are being rejected because the system was upgraded to allow the "high-risk" code to be sent to the issueing bank.

well we should start to market a real credit card...... if we all advertised it we could make some money and improve the whole industry... fuck these banks let's do something about this...

if we get the whole industry behind one card we would be able to make a big difference... or do we just keep pushing paypal...?

Thats a good point. More and more people from countries like India and China (which have a combined population of over 2 billion people) are getting internet access and very very few of these people even have credit cards to buy porn.

Not only that, but these countries aren't exactly wealthy either, so even if they did have a credit card....I highly doubt that they could afford to buy a membership for $29.95/month USD.

I hate these kind of threads...You people start to get me scared even when I'm doing QUITE good for myself..You make it seem like it's all coming down tomorrow..If you have a chance to make a lot in the next 5 years,DO IT because nobody knows where shit is going to be after that..ooOoOoOO SCARED!!!

WHY NO ONE MAKES $$???

CAUSE WE ALL WASTE OUR TIME POSTING HERE...

Indeed! Let's get 'em :BangBang:

Also I don't know where the hell some of these stats are coming from...If chargebacks were so high you would see ALL the major sponsorship programs closing up shop,wouldnt you? They live in recurring...I doubt chargebacls are higher than 10% overall..If somebody has some solid facts I think I would be a bit more swayed into believing that...Sales aren't down for the people that have always made big sales,it's only the little fucks...

I've always wanted to say this,If you aren't at least making hmmm $8k+ a month RIGHT now and you have been in the game for sometime...You won't be around in a few years,unless you have something really promising....

you're 100% right chris... 75% of the people in this biz don't take their own f*ckin' biz serious... can you name any other biz that's so full of amateurs!?! i can't...
but after all, we shouldn't try so hard to make them amateurs grow up... coz they're the reason why making money for an intelligent, professional and serious person/company in this biz is still so damn easy PLUS accesable compared to any other biz.
so hé, let them all find it out the hard way, just like you and i did...

and those are just _my_ :2 cents: :thumbsup

yet most of you morons give equal wieght to what THEY have to say and to what the PROFFESSIONALS have to say.

Good point Gary. This math suggests that sales are down on a relative basis (relative to clicks that is). I agree with that. There is more to it, though.

I suggest that sales are actually down on an absolute basis from two years ago, despite an increase in overall traffic from both people who have the ability to pay and people who don't. The primary reason for this is that even people in countries that are wealthy and people who have credit cards, are often having those cards rejected.

It is also important to note that it is not chargebacks that are the problem here, but outright rejections of cards.

Of course, chargebacks themselves have contributed to a reduction in sales for a variety of reasons, which I will bring up in a future thread.

The problem affecting webmasters of adult sites is that many unscrupulous webmasters have gotten into the arena of gaming as well. It's the activity in the gaming arena that has banks turning down credit cards left and right. Not free content.

uhoh, angered mr. attitude again...

btw - it's proFessionals, not proFFessionals

Who said sales were down???.....Maybe if your sales and income are down, then you need to make some changes??...Theres more and more new people on the net everyday, you just need the right advertising techniques to get them.
Just my 2 cents.

I've been in porn many years and the is the porn business. It has always been the same, 1,000s of guys want to be in the porn business.

They think it's cool, will make them as rich as Larry and get them laid. While in truth they can toss off to a mag this is where there knowledge of porn ends.

The Internet allows them to join in for relatiively little money. Buy a digital camera, 1 gig of webspace and find an unemployed girl and HEY PRESTO he thinks he's Larry Flynt.

I do not know how many make it work, probably 1 - 1,000. But just look at some of the posts on this board, if they were starting up in any other business they would be laughed at, we help them.

We are new to the net, but not porn. and this month we sold more on the net than to the magazines. All this in 9 months, so the net is still a good place to make money.

IF YOU KNOW WHAT YOU ARE DOING.

I've been in porn many years and this is the porn business. It has always been the same, 1,000s of guys want to be in it.

They think it's cool, will make them as rich as Larry and get them laid. While in truth they can toss off to a mag this is where there knowledge of porn ends.

The Internet allows them to join for relatiively little money. Buy a digital camera, 1 gig of webspace and find an unemployed girl and HEY PRESTO he thinks he's Larry Flynt.

I do not know how many make it work, probably 1 - 1,000. But just look at some of the posts on this board, if they were starting up in any other business they would be laughed at, we help them.

We are new to the net, but not porn. and this month we sold more on the net than to the magazines. All this in 9 months, so the net is still a good place to make money.

IF YOU KNOW WHAT YOU ARE DOING.

The only reason the number of failures are up is the number of people trying to get in.

fact is its much harder to make money now than it was a few years ago. there's a ton of competition now, and its growing daily. competition drops margins and thats what we're all seeing now.

this thread sounds like a bunch of first year amway hopefuls.

only 1 in 1000 of them make it too, and only after years of relentless hard work - and they sell freakin soap. ever been to an amway convention? i bet it's not exactly internext.

how 'bout a little attitude of gratitude here eh? our product is freakin porn! naked people, coitus, foriegn objects in the ass, bi-trans-mature-nude-plumpers covered in grape jelly doing the hula-hoop - it doesn't matter. it sells! all of it! there's a wrench for EVERY nut out there. there is an exponentially growing audience on its way folks.

oh, and free, schmee, it'a all part of a natural selection. as soon as the next tech wave hits all the pretenders will scramble back to their xSP.com's for pre-ipo stock, nerf guns and pliates classes at lunch.

everything is cyclical. it will be ok.

now get back to work, be creative, love thy neighbor, and drink those worries away ...

that is all ...:thumbsup

and how did you make that calculation and reached this very number? or did you just see a chance to measure your cock with the rest of the big-ego punks over here?

i simply go ballistic when i see people walking around, poking their finger up the others' chests and tutoring them about a business they know nothing about.

and on the eight day
God created Dialers

People cant pay with cc
give them a dialer