Quote:
Originally Posted by Vjo
And I agree with you Paul that giving away content caused ratios to go sky high which caused the value of traffic to drop causing the value of domains to drop.
And really crippling the small affil. And thus hurting the entire industry.
You cant stop technology I guess and as soon as the first scripts arrived guys bought them.
Script writers really hurt the biz. Not blaming them as technology marches forward but no scripts, no tubes, or at least less effective tubes. And maybe traffic would be worth something again.
Eh it was inevitable some jackball would go, "hey why not just build a huge video site with everything free" Duh! And with them first few sites we were all in trouble.
Quick story you'll like. In 1998 I had a site with 10 pics on. I honestly forget where I got em. But I got a C&D from that well known content producer in Florida, Damn I cant remember her name but she was a pit bull about her pics.
I took um off. Somewhere along the line that "pitbull protect your content at all costs" mindset changed.
Thanks Paul. I am still a grunt so better get off to the fields a while.  |
You're talking about today, I'm also thinking about yesterday.
The idea of giving away content didn't start with Tubes. It started with TGPs and no one bothered to sit back and think about the damage it was doing.
So let's look at the coin from the other side. What can a medium site afford to spend on content and be a bit better than the norm?
I was trained at doing budgets so this is a guess work stab at the numbers, but the way a businessman looks at it.
24,000 memberships a year. (Not big and not small) = $720,000
Less 10% processing = $648,000
Less content costs of $230,000 = $415,000
Hosting 10% (early days) = $343,000
Set up costs $35,000 = $308,000
Assuming it's not a Ma & Pa operation, let's add an office and 1 staff. Cost $24,000 for the office and $35,000 for staff. Also we have equipment like computers, lawyer and accountant. $600 a moth. Total $71,000 per year. $237,000
Profit of 10% of the principal. The total left is $165,000.
22,9% of the revenue.
Obviously without access to the true figures the amounts are guess work, but if anyone wants to flame me they're welcome to. So long as they give true figures.
But it's clear you can't build a good solo girl site from scratch and pay out 50-65% to affiliates. Even if only half the sign ups are non affiliates the average spent on "traffic" could well be 30% of the revenue. Big affiliates want more for a sign up. Plus think about support and promotion to affiliates.
And the owner of the site has a business turning over 3/4 of a million dollars and takes home $72,000 before tax.
The best and only place to save money was content. Cut that by 2/3rds and it starts to look better. The problem is the free
legal content being given away and piling up on free sites everywhere.
The business model was flawed from very early on. And it got more flawed as time went on.
When I see a person giving away tons of free content to earn money as an affiliate, complaining about free content I really wonder. What is he thinking he did for the las 5-10 years if not give away free content?