Any predictions for 2009?

[RawAlex]

Actually, I want to take a kick at this one.

My most major prediction for 2009 is the collapse of the big time payout affiliate programs. It is a bit of a combination of things that is going to bring this on, not any one thing.

Obviously, the Mastercard move on pre-checked cross sales (or any cross sales for that matter) could lead to Visa doing the same. That would eliminate part of the scourge of the porn world right now, companies burning customers for all they are worth. The chargeback rates might get them before the regs do, but in my mind it is doubtful the $100 per signup guys will be able to last it out.

The second part is the whole AFF situation. The IPO is a hail mary of all hail marys, and their opening of the books for the IPO shows that they have been routinely losing about $20-$30 per signup, on an average payout of somewhere around $70 or so over the last couple of years (consider that some of the signups are through Zango and ad buys, not their affiliate program). Everyone of their direct competitors nows knows that AFF has been losing money at a pretty fast pace (100 million in 3 years) and that it cannot continue. Either the IPO won't come off and AFF will be decimated, or the IPO will work, and shareholder pressure (or a change of controlling ownership) will force them to drop their per signup payouts to levels where the program is profitable. As soon as one cam / dating program blinks, they all will, because you have to assume that most of them are losing their asses trying to keep up with the high payouts.

The indirect result of this is major pain for the high traffic tube sites. Many of them are entirely dependant on high payout programs to make them enough money to keep going. Already some of them are suffering because cheap hosts like Alphared have gone out of business, raising their costs of bandwidth (for those who don't know, many of the tube sites are hosted at good places, but in turn host and serve their movie files from some of the crappiest, cheapest, nastiest hosts on the planet). So a squeeze between higher costs on the bottom and lower payouts on the top may in fact make their lives more miserable than before. When your entire business is spending $1 to make $1.10 and your expenses go up 20% and your revenue drops 50%, well, shit ain't working.

I also see 2009 at a year with great potential for he rebirth of solid well managed affiliate programs. Many of the big players have ground to a halt, victims of the tubes and their own greed, and many of the midline programs that were suffering in 2007 were bought out or closed in 2008. With the potential of cheaper labor costs (unemployment leads to more pussy for porn) and a fairly wide open market place for new concepts, I think 2009 will be a year that will see a weird sort of regrowth in the market. With 2257 hopefully settling down and third party record keepers being once again acceptable, I think that the real amateur market may once again rise up and get back to it.

All those programs that are caught in the cross sale web, creating off shore billing entities and trading customer info are in for a shock. They will likely be the ones on the outside looking in, or potentially on the inside looking at bars - as most of them haven't considered the implications of European and Canadian privacy laws.

Oh yeah, 2009 is the year that some lucky surfers will get a real touch! Then they will be hooked.

[gonzo]

Originally Posted by RawAlex

Oh yeah, 2009 is the year that some lucky surfers will get a real touch! Then they will be hooked.

What little exposure I have gotten with this device and peoples reaction has been pretty damn positive.

This device taps in to the core of the desired end result for any adult entertainmentan that is to get the viewer off.

The closest thing so far is the fleshlight and based on its sales and popularity I would say that RealTouch could way more surpass this demand.

Keep in mind you are looking at a novelty device that has a recurring revenue stream by design.

In the coming weeks you will hear me talk a lot more about how this device is going to end up positioned in the business and some of the conclusions I have about it.

I can also tell you I believe that whats left of the TGP market will be replaced by an incredible amount of growth in the Tube market. For us oldie moldies in this biz.... think how Shaven Ferret was able to expand the TGP market and kill off the PicPosts a long time ago.

I think consolidation continues which for reasons youve seen in prior posts is a good thing.

I see billing becoming a major issue for all of us.

I see a rebirth in webcams as they become the new personals and entertainment hybrid of sorts.

[tony404]

Originally Posted by gonzo

What little exposure I have gotten with this device and peoples reaction has been pretty damn positive.

This device taps in to the core of the desired end result for any adult entertainmentan that is to get the viewer off.

The closest thing so far is the fleshlight and based on its sales and popularity I would say that RealTouch could way more surpass this demand.

Keep in mind you are looking at a novelty device that has a recurring revenue stream by design.

In the coming weeks you will hear me talk a lot more about how this device is going to end up positioned in the business and some of the conclusions I have about it.

I can also tell you I believe that whats left of the TGP market will be replaced by an incredible amount of growth in the Tube market. For us oldie moldies in this biz.... think how Shaven Ferret was able to expand the TGP market and kill off the PicPosts a long time ago.

I think consolidation continues which for reasons youve seen in prior posts is a good thing.

I see billing becoming a major issue for all of us.

I see a rebirth in webcams as they become the new personals and entertainment hybrid of sorts.

I cant see tubes replacing tgp's. I still do very well with tgp's and I doubt im the only one. I have submitted to legal tubes and first I got to give them half and secondly they dont convert as well. Also for tubes to over take tgps someone has to make a submitter.
Also I loved Shaven Ferrets pic post submitter, I was very sad when it was no more.

[gonzo]

Originally Posted by tony404

I cant see tubes replacing tgp's. I still do very well with tgp's and I doubt im the only one. I have submitted to legal tubes and first I got to give them half and secondly they dont convert as well. Also for tubes to over take tgps someone has to make a submitter.
Also I loved Shaven Ferrets pic post submitter, I was very sad when it was no more.

Ill lend you my glasses in a week or two and you will see.
Your thinking the old game.

[tony404]

Originally Posted by gonzo

Ill lend you my glasses in a week or two and you will see.
Your thinking the old game.

Considering there isnt a legal tube that makes any real money or has any real traffic to speak of. I cant see it. They keep giving full scenes for traffic the buyer pool will get smaller and smaller.

[Toby]

Originally Posted by tony404

Considering there isnt a legal tube that makes any real money...

Not a one? Are you sure?

[RawAlex]

Originally Posted by Toby

Not a one? Are you sure?

I am sure there are some legal tube sites that are making money, but to some extent their success may be artificial. Example, if you ran 5 bigger traffic TGPs and filtered off 10% of the traffic from each one through various means, you could have a tube site that gets a bunch of traffic. Structured correctly, that traffic would in theory convert likely as well as normal TGP traffic, maybe a little bit better because you can control what they see.

But if you look at pretty much every tube site, they are dependant to a huge degree on non-porn sales, upsales, and other techniques to make money, because they aren't very good methods to sell actual porn. Any method that might get used to filter down the traffic (such as limiting views per user, or through various mousetrapping methods) kills what the viewer would expect in a tube site, and therefore would limit traffic growth.

Tube sites face that simple problem (that TGPs faced originally) which is that you put too much free porn in a format that is too easy for the users to find, enjoy, and ultimately finish the task at hand with. There is no way you are selling porn to a guy that has already used the kleenex box. It's exponentially worse with a tube site, because you are not only presenting links to galleries (usually sponsor hosted) but you are now also having to host the videos, which incurs potentially significant costs on all those non-buyers.

So who do you think in the tube world is actually making money (and by making money, I mean getting more than 10% return on costs)?

[gonzo]

Originally Posted by tony404

Considering there isnt a legal tube that makes any real money or has any real traffic to speak of. I cant see it. They keep giving full scenes for traffic the buyer pool will get smaller and smaller.

I know of one that does both... and its not got full scenes.

[Paul Markham]

Originally Posted by tony404

Considering there isnt a legal tube that makes any real money or has any real traffic to speak of. I cant see it. They keep giving full scenes for traffic the buyer pool will get smaller and smaller.

Here's a prediction. Sites that offer no more than a Tube offers, in the eyes of the consumer, will continue to lose traffic to Tubes.

The problem is not Tube sites. It's paysites that offer little more to the members than a Tube site. IN THE EYES OF THE CUSTOMERS. What ever you say about how marvellous our members areas are the truth is the members choosing Tubes don't agree with you.

[tony404]

Originally Posted by Paul Markham

Here's a prediction. Sites that offer no more than a Tube offers, in the eyes of the consumer, will continue to lose traffic to Tubes.

The problem is not Tube sites. It's paysites that offer little more to the members than a Tube site. IN THE EYES OF THE CUSTOMERS. What ever you say about how marvellous our members areas are the truth is the members choosing Tubes don't agree with you.

If they dont spend money they arent customers and probably half the surfers on tubes arent old enough to have a credit card. THe key is going to be locking down content so its not so easy to take.

[Paul Markham]

Originally Posted by RawAlex

Actually, I want to take a kick at this one.

Oh yeah, 2009 is the year that some lucky surfers will get a real touch! Then they will be hooked.

Great post Alex.

The problem is for many years people thought traffic was the answer. The problem was the way they got it and the cost of getting it. Tube sites that can't afford their BW are going to be hit in 2009. As more businesses cut back some of the hosting companies running on a shoe string will be closing or putting up their costs.

With less people with less money to spend more will be going to Tube sites and less will be buying. Traffic for many is like the French Kings, something they can't afford and the solution is the guillotine. (My attempt at humour.)

However the answer is not better affiliate programs. It's better members areas. Until this industry wakes up to the fact that a Tube site giving away a product costing them cents, we will not be able to sell our products for dollars. To support our cost of getting 1 buyer in 1,000 surfers to sign up.

We need a product 1 in 100 will buy and more money spent on inside a members area than we currently do.