Quote:
Originally Posted by Toby
FWIW, I was up 6% in 2009 over 2008, and 2010 was within $130 of 2009. So far in 2011, thru end of April, I'm up 31% over the same period in 2010. April 2011 set a new single month record.
Not exactly sure what I'm doing different than everyone else, but business is just fine here.
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One of the biggest mistakes that I see made in business is being in your position and thinking things are okay. While you may be seeing positive results in the current situation, you are still gaining ground on a sinking island.
There is a blog / news / propaganda site out there (called techdirt) which is all about copyright, trademarks, and patents. They are particularly hateful of content producers, supportive of pirates, and they spend a whole lot of time talking about "business models that work" in this situation. They show some situations where things work out. They never address the idea however that these "successes" happen in a failing, collapsing marketplace. When that marketplace fails, the "successful" will die right along with everyone else, because the market will no longer exist.
To use one of their own analogies, it's like being a buggy whip maker in the late 1800s. Your business might be booming, but those new fangled horseless carriages are going to wipe out the entire market soon enough.
In our case, we are dealing with a stranger situation, because it isn't demand that is failing. Rather, we face the issue that the product is easily duplicated and distributed, and there is a little that the porn industry can offer to these people that they cannot already get for free as a result of piracy. We are literally being driven out of business by our own products.
Tube sites are only an admission by some that the idea of selling porn in and of itself is such a marginal business, that they would rather be in the traffic aggregation business than the selling or marketing of porn business. What they are doing is really hastening the end of things, because they are training more and more surfers to get their porn for nothing.
What is funny in all of this is that when they do manage to drag porn down to nothing, they will be killing themselves as well. The income / expense ratios of running a bit tube site are pretty high, and actually having to pay for exclusive content to fill the tube site would be beyond what most of them can handle. There is less porn made now than before, and that trend is likely to continue. They may find themselves with no sources of cheap / free content, with no ability to grow their businesses.
So while they may find themselves currently gaining ground, they have most certainly gained ground on a sinking island.
For anyone involved in selling porn online, the real risks lie in companies like CCBill, Epoch, and other processors no longer being able to support their business models. As the total transactional value of porn continues to shrink, these companies will also find themselves pinched. Some of them get involved in somewhat shady practices to pump up the bottom line, but in the end, they end up in the same place: They transact less business, they deal with higher chargeback and fraud rates, and they suffer on the bottom line. If those few remaining dominoes in the processing area fail, all the gained ground is meaningless.
It's not to be negative and it's not to being a downer. Things haven't "changed", they are "changing". The current situation isn't the end position, so being good in the current situation isn't any indication that you have the right tools and the right place for the next phase (coming soon to an internet near you).