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Originally Posted by signupdamnit
I think it's a combination of all the above. Some have moved to mainstream others have taken offline jobs. I still make some sales with paysites but I won't even think about promoting something unless it's absolute cream of the crop stuff which has proven ratios. It's just not worth experimenting with anymore as most now convert like crap. And it's no mystery why. Now even all the niched terms in Google have been taken over by these ridiculous sites giving out full scenes by the thousands so that they can sell ad space. Frankly I'm shocked when I make new affiliate paysite sales. I don't understand why people would still buy! Just type the name of the site in Google or the niche and between Manwin's tubes, redtube, and Xhamster you can find every full scene ever made from that site. And failing that there are even backups at the file lockers and the torrents. Why buy? 
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Because again there are people who buy bottled water. Some people - those with HD monitors, etc - want quality. They also want to be able to show their porn on their giant wide-screen HD tvs. They don't want the wife/kids finding their browser hsitory, the reasons go on and on. Is it a smaller percentage today than it was before the advent of free porn? Absolutely. But there are still ways to sell to surfers.
I make sales every day, from affiliates who don't have tube sites, so I know it's possible and is happening.