Quote:
Originally Posted by FreeHugeMovies
It can be done and the sponsors would have a huge increase of traffic before the promo period and at the end. Those galleries would still be out there trickling that traffic to the sponsors. Hell, you might get some new affiliates as well who would continue to do business beyond the promotion period.
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If the payout was on trials - there are not many paysite sponsors that have a
per-trial net-net VPS of over $100. There would be absolutely zero profit from all of those joins for the period in question. So, if it were even 1000 joins per day for 30 days, that's $3,000,000 in payout (HUGE cashflow crunch) - with a net-net loss of at least $300,000 - $1,000,000 (depending on VPS) which would be realized over say a 12 month period.
So for any sponsor to do this they would need several million dollars of cash just sitting there, on top of normal operating expenses. In addition, assuming a per-trial VPS of, say, $70 and a normal payout of $30, with a net-net profit of $20 per join (payout + variable costs + fixed costs), the program would have to pick up an ADDITIONAL 45,000 joins on top of their normal business before breaking a profit.
So, give a 12 month time horizon a program would have to add, on average, 134 NEW joins per day over an 11 month period to BREAK EVEN on the $900,000 net loss of the promo (using $100PPS / $70 VPS / $20 net profit per join).
This does not even factor in the time-value of money on $3 million dollars, even at say 3% interest over 12 months that return is (compounded monthly) about $91,000. That's not even including the opportunity cost of $3 million dollars (which could be invested in, say, purchasing one or several other profitable businesses).
I run all the promos here and I do this math all the time. A $100 PPS promo would be the ideal way for me to put us out of business in 30 days
