Originally Posted by RawAlex

Rhino, saturation is always an issue, but only because it dillutes the profit potential for any single item. It doesn't, in my mind, mean that the total number of sales would drop from it, just that they are spread over more product points.

The real issues facing online porn at this point are these:

(A) Convergence. We are very close to reaching the point where people will start (in numbers) to use things like windows media edition or other web connected appliances to download movies and tv shows to view Tivo style. The number of players in this field will be much smaller, and the overhead required to get in the door much higher than the current bar for opening a paysite.

(B) Programs and systems such as Zango, spyware, and such are whittling away sales from affiliates at a fairly alarming rate, such that the open affiliate model is actually currently at some risk of collapsing over time.

(C) keyword purchases, placement purchases, and other search engine pay per manipulations are making it nearly impossible for normal webmasters to acheive decent rankings for any period of time.

(D) P2P networks, file sharing, new group resellers, and similar are taking a big chunk out of the porn market these days.

(E) the market overall is pretty much matured, and as such, overall growth in the market has slowed. Anything new is often just taking business from other existing sites (the dillution you mention). Very few items get a very long term buzz, even the Jordan Capri Honeymoon tape deal pretty much ran out of steam withing 45 days end to end (might come back for one more shot when the rest of the material is released in the next 10 days or so).

(F) Most of the big money categories from the last couple of years, such as live chat and dating have pretty much run their course, mostly because these programs have bought and now own a large percentage of the possible customers already, and they aren't going to pay for them to signup again.

(F2) Most of the major programs have either "join 1 get all" or "mega pass" sites, which basically pay you for a buyer once, even if you could have resold them something else next month in the same program. Every sale these days pretty much makes that surfer "dead" for anywhere from 10 to up to 100 sites.

(G) The expansion of the internet in the english marketplace has slowed dramatically, more and more surfers are "experienced", less likely to buy, and more than likely got burned by a scam, spyware, spam, or some other misdirection and are no longer intending to takeout their credit card online.

All of those things go together to form up a business that isn't going anywhere any time soon.

I wish any new webmaster the best of luck.