Quote:
Originally posted by Mike AI@Feb 9 2003, 09:21 AM
IT might eat a little bandwith, but with BW prices dropping they are not a major factor in expense. The money to create great gallaries, abd the dubuios signups from them might be more of an issues.
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Bandwidth is alot cheaper today then 1 year ago, and it will probably be even cheaper 1 year from now, however conversions were also better 1 year ago, and conversions will probably be even worse 1 year from now...
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Most average PPS paysites who will payout $35 on a $1.99/$39.95 membership today are not going to see great returns, so adding to the cost per member by adding free hosted galleries is going right from the profit margins.
Lets do some very average numbers (note there are alot of factors which I have left out - just trying to do some very overall average numbers
)
Signups from TGPs without offering free hosted galleries:
$35 per signup + costs for bw/hosting, content and design $0 (tgp submiter paid all of these costs)... Total cost to get a signup from a TGP = $35/signup
Signups from TGPs with offering free hosted galleries:
$35 per signup + $5.95 bw/hosting ($0.85/GB = 7GB = 50K uniques to gallery, for every 1 signup) + good gallery design and content is $100 per gallery.... Lets say you get 100 signups from a gallery which have these numbers, then your total cost to get a signup from a TGP = circa $42/signup
Then start to add things like really low conversions from trial to recurring on tgp traffic, more chargebacks, more fraud, more content stealing etc. and the above numbers start to look even worse...
Now as I said, there are many factors left out, and the numbers will be different from paysite to paysite, TGP to TGP, and volume to volume - just tried to make somekinda of average to show my point... and that is more cost per signup for the paysites, which surely will be taken from the current paysite profits.
So how will paysites pay for this extra cost without more scrubbing, more cross selling, higher pricing etc. which again will lead to even worse conversions in 1 year from now.
Average paysites giving away new free hosted galleries on a daily/weekly basis without lowering their payouts will not have it easy...
I think TGP owners will rather get a lower payout (ex $15-20/signup) if they get fresh galleries/content, good conversions, and timely payment... remember half of the deal for TGP owners is to get some good content/galleries which makes their surfers come back to their site - the extra income from the galleries is new to TGP owners.
Last edited by Rolo at Feb 10 2003, 03:11 AM