Think Cross Sales Werent a Big part of the Biz?

[gonzo]

Today’s communication with our affiliates comes after much deliberation, as well as a heavy heart. After 10 years, and millions of dollars in affiliate payouts, Wegcash has decided that the continuation of the affiliate program is no longer sustainable. Therefore, we will no longer be accepting referrals effective May 21st, at 4PM PST.

The reasons, many of which are obvious to all of us, revolve around the decline in membership revenue. The continued proliferation of free adult videos has spawned a market which does not support an affiliate program. This communication should in no way be interpreted as an industry, political or ethical stance, nor should it be deemed dispiritedness; rather, we choose to look at this as a time to embrace the future.

While our company is closing one door, we are working steadfastly on new opportunities. While we could all engage in the revisionist history of "what ifs," events leading up to the current free tube models aren't negotiable; we are better served focusing on the future. We also feel that energy is better served realizing the true successes that our affiliate program brought to us, and to our thousands of wonderful affiliates (without whom we would never have achieved the success we did).

The gravity of this announcement is in no way lost on our company’s staff, from executives and programmers, to its owners. The Wegcash brand was conceived by two passionate and driven entrepreneurs. Throughout the years, its continued prosperity is attributable to the hard working staff members, past and present, who stayed late, came in early, and passionately put their heart and soul into the product. It is also very much attributable to the thousands of affiliates that entrusted our brand with their business.

While today undoubtedly is revealing in terms of the current market, it’s also the lore for the successful future.

Our sincerest thanks to each and every one of you for the past decade of fruition,

Wegcash.

[softball]

wow.....

[bluemoney]

Originally Posted by rhetorical

wow.....

I was thinking more along the lines of "Ka-fucking-boom"!

[RawAlex]

I will be interested to see if they continue to accept the traffic (without credit) or if they do the honest thing and 404 stuff out. It is going to be interesting what their end play is on this one.

[Far-L]

Ok, we all saw the writing on the wall but who is going to step up and predict which dinosaur is going extinct next?

[Toby]

Is anyone else hearing violin music as they read that?

[RawAlex]

Originally Posted by Toby

Is anyone else hearing violin music as they read that?

actually, I was sitting here thinking that this is much like the death of the big dialer programs.

Dialers and cross sales were both dependent on getting the most money from the customer as quickly as possible without regard for long term viability. I think that many programs (no comment directly on wegcash) saw the cross sales as a way to fix non-functional business models, in light of poorer conversions and dropping income.

The reality is that there is a very strong business case / model out there for the affiliate business, but it has to be based on realistic business models. Programs cannot make big payouts ($100 plus) without retention and long term income. Programs that are set up on 2 - 10 year old content, fancy tours and poor members areas, credit card slamming and little value for customer will find themselves burned out and dead.

It is exactly like dialers. They forgot what we are trying to sell.

[tony404]

Originally Posted by RawAlex

actually, I was sitting here thinking that this is much like the death of the big dialer programs.

Dialers and cross sales were both dependent on getting the most money from the customer as quickly as possible without regard for long term viability. I think that many programs (no comment directly on wegcash) saw the cross sales as a way to fix non-functional business models, in light of poorer conversions and dropping income.

The reality is that there is a very strong business case / model out there for the affiliate business, but it has to be based on realistic business models. Programs cannot make big payouts ($100 plus) without retention and long term income. Programs that are set up on 2 - 10 year old content, fancy tours and poor members areas, credit card slamming and little value for customer will find themselves burned out and dead.

It is exactly like dialers. They forgot what we are trying to sell.

I think the whole $100 payout on $30 sale doesn't work.To see a dollar honestly its almost the 4th month before seeing dime. It was that model that caused the games. Look at mainstream affiliate programs you have to do huge volume to make money. I worked for mainstream we paid $2 for a completed valid insurance form. Not a dollar more whether you were joe around the corner or webmd.

[housekeeper]

Originally Posted by Toby

Is anyone else hearing violin music as they read that?

More like a cello strung with chicken wire...

we are better served focusing on the future

They however fail to outline or give any inferrence as to what the future may hold, or what their vision is..

The domino effect is forthcoming..

[Greg B]

Originally Posted by housekeeper

More like a cello strung with chicken wire...

They however fail to outline or give any inferrence as to what the future may hold, or what their vision is..

The domino effect is forthcoming..

That's the second part of what will be interesting to see. First, how do our sales measure up after this storm has passed and who will still be standing. I've been in this biz for 14 years now and am still here after many bigshots have come, gone, been buried, and some in jail until Jesus comes back.

When the dominoes fall it will show a clearer picture who has been naughty and will give insight to handling mainstream scumbags too.

[Greg B]

http://www.cnbc.com/id/37259541

This story also emphasizes what is happening in this industry. It's about the global economy collapsing. After reading it and it's followups I realized we don't have an economic problem, we have an hoesty/integrity problem. Far too many institutions and law enforcement agencies let so much shit slide down the hill it turned into an avalanche. There's just so much you can steal before it turns around and bites you in the ass.

Too many crooks spoil the broth.

[softball]

Affiliate marketing is very, very expensive. There needs to be a correction in the market. My prediction is smaller percentages, fewer affiliates making more money.

[DannyCox]

I think it's great! The larger programs are now just to fat to sustain themselves in an honest market. They just can't go back to doing business in the proper way and have no choice but to shut things down and skim off what they can.

The good thing is it opens thing sup nicely for us that run things lean and inexpensively. I think we're going to see a resurgence of the true niche model and not the "big boys" idea of what is niche.

[Peedy]

Originally Posted by DannyCox

I think it's great! The larger programs are now just to fat to sustain themselves in an honest market. They just can't go back to doing business in the proper way and have no choice but to shut things down and skim off what they can.

The good thing is it opens thing sup nicely for us that run things lean and inexpensively. I think we're going to see a resurgence of the true niche model and not the "big boys" idea of what is niche.

Totally agree. We need a good cleanout of programs.

[Greg B]

Originally Posted by DannyCox

I think it's great! The larger programs are now just to fat to sustain themselves in an honest market. They just can't go back to doing business in the proper way and have no choice but to shut things down and skim off what they can.

The good thing is it opens thing sup nicely for us that run things lean and inexpensively. I think we're going to see a resurgence of the true niche model and not the "big boys" idea of what is niche.

Right the fuck on.

Actually I'm happy to agree with just about everyone's response. Me and Gonzo go waaaayyyy back. He's always been an upstanding guy. We've seen em' rise and fall. I keep things lean and mean. I toyed with affiliate programs and things went great. However, the company that I was working with ACPay at the time took a shit. A sign of things that would soon follow.

WEGCash I'll always remember for their funny ads with Gabe.

Had a friendly atmosphere about them back in the day.

Maybe now we can get back to the good ol' days of just doing a good job, enjoying ourselves and keeping the wolves off the door.

[gonzo]

Originally Posted by Greg B

Right the fuck on.

Actually I'm happy to agree with just about everyone's response. Me and Gonzo go waaaayyyy back. He's always been an upstanding guy. We've seen em' rise and fall. I keep things lean and mean. I toyed with affiliate programs and things went great. However, the company that I was working with ACPay at the time took a shit. A sign of things that would soon follow.

WEGCash I'll always remember for their funny ads with Gabe.

Had a friendly atmosphere about them back in the day.

Maybe now we can get back to the good ol' days of just doing a good job, enjoying ourselves and keeping the wolves off the door.

My favorite WEG story is the posturing and reaction when I mentioned that the asian site they had showcased 2 hotties all over the tour but were nowhere to be found inside.

Ranks up there with the marketing genius that created G3X and then asked me if I could get them a feed for the movie descriptions from one of my clients.

Then again this is the same marketing genius that destroyed Mike AI's very profitable Purecash in less than 6 months and also stole the idea for a cannonball contest in Miami. I guess if you rename it to something lame like bellyflop then it makes it ok.

Im guessing the new jobs they have found will garner them the same amount of success in the long run.

[EmporerEJ]

I remember, a ways back, when I questioned one of those "Big Boys," (Now gone) about the wisdom of paying back what would take 3.5 months to break even. I was called crazy, and chastised for questioning them.

[softball]

Originally Posted by EmporerEJ

I remember, a ways back, when I questioned one of those "Big Boys," (Now gone) about the wisdom of paying back what would take 3.5 months to break even. I was called crazy, and chastised for questioning them.

had the same kinda conversations myself. A lot of these guys got their education at the Madoff School of Business. If it looks like a duck, swims like a duck, quacks like a duck.....its a duck.

[RawAlex]

For me, it is pretty easy to see who will disappear: Any program with nothing but old, out of date content, with fresh tours and old insides.

The ones that live on? They are still producing fresher content (even if it is monthly), they are paying reasonable commissions for traffic, and are even opening new sites.

WEGcash wasn't the ones I expected to see go first, but I suspect they are leaving with bank accounts intact, rather than slowly bleeding themselves to death.

[DannyCox]

Ten years ago, back in 2000, JoeE from CEN was in Montreal seeing a girl he met at the WebExpo show in 1999. We'd get together for dinner whenever he came into town. Even back then he saw the writing on the wall and that what they were doing wasn't sustainable in the long run. He also thought it was funny that there were webmasters who didn't think there was shaving and other shady tactics going on, in order to cover those ridiculously high pay-outs! And remember, this was all 10 years ago.

He even talked about how he wished they never got into their dick swinging competitions with CE and RJB and the rest, and that the majority of their money was just going right back out to cover affiliates. That was before the really dirty tactics even started!

The only problem will be getting the average webmaster to support the smaller programs. The vast majority are just followers, always have been, and just follow the GFY trend of the moment. It's still all "Bros", and I really don't see that changing. These people would rather get a free beer at a show than make some real money with a proper program. It's the way it i now, and the way it has always been.

[RawAlex]

Originally Posted by DannyCox

Ten years ago, back in 2000, JoeE from CEN was in Montreal seeing a girl he met at the WebExpo show in 1999. We'd get together for dinner whenever he came into town. Even back then he saw the writing on the wall and that what they were doing wasn't sustainable in the long run. He also thought it was funny that there were webmasters who didn't think there was shaving and other shady tactics going on, in order to cover those ridiculously high pay-outs! And remember, this was all 10 years ago.

He even talked about how he wished they never got into their dick swinging competitions with CE and RJB and the rest, and that the majority of their money was just going right back out to cover affiliates. That was before the really dirty tactics even started!

The only problem will be getting the average webmaster to support the smaller programs. The vast majority are just followers, always have been, and just follow the GFY trend of the moment. It's still all "Bros", and I really don't see that changing. These people would rather get a free beer at a show than make some real money with a proper program. It's the way it i now, and the way it has always been.

The only difference I think is that some programs got incredibly greed not against their affiliates but against the customers. Rather than just being satisified to shave 30% of the signups and pay 30% more per signup (marketing), they turned around and learned ways to much more income from every signup than they were paying out. So even as they swing the $100 per signup dicks around, they still had another $100 or more in their pockets from the signup, so it wasn't an issue.

But a few things have happened in short order that have changed things. The Brazzers "offshore" money issue with the feds in the US is not to my knowledge resolved but pretty much put everyone else on notice. The offshore Visa providers started getting hit with issues and fines because of excessive chargebacks, which made them less interested in playing the game. Finally, Visa outrightly changed the rules for cross sales, making them pretty much impossible to pull off. So there is no real simple way to make it work anymore, and the US government is looking very closely at the money coming in. It pretty much shuts things down.

I for one would be happy to get back to plenty of smaller programs with reasonably fresh content that actually want to get promoted, respect their affiliates, and pay a reasonable amount flat or percentage to make it all work out.

[gonzo]

Originally Posted by RawAlex

I for one would be happy to get back to plenty of smaller programs with reasonably fresh content that actually want to get promoted, respect their affiliates, and pay a reasonable amount flat or percentage to make it all work out.

Damn you just lost all your GFY street cred.

[Far-L]

Originally Posted by RawAlex

The only difference I think is that some programs got incredibly greed not against their affiliates but against the customers. Rather than just being satisified to shave 30% of the signups and pay 30% more per signup (marketing), they turned around and learned ways to much more income from every signup than they were paying out. So even as they swing the $100 per signup dicks around, they still had another $100 or more in their pockets from the signup, so it wasn't an issue.

But a few things have happened in short order that have changed things. The Brazzers "offshore" money issue with the feds in the US is not to my knowledge resolved but pretty much put everyone else on notice. The offshore Visa providers started getting hit with issues and fines because of excessive chargebacks, which made them less interested in playing the game. Finally, Visa outrightly changed the rules for cross sales, making them pretty much impossible to pull off. So there is no real simple way to make it work anymore, and the US government is looking very closely at the money coming in. It pretty much shuts things down.

I for one would be happy to get back to plenty of smaller programs with reasonably fresh content that actually want to get promoted, respect their affiliates, and pay a reasonable amount flat or percentage to make it all work out.

Eventually the wild west will always be tamed and then the real money can be made when all the lawlessness has been run out of town, tarred and feathered.

[TheEnforcer]

Originally Posted by Far-L

Eventually the wild west will always be tamed and then the real money can be made when all the lawlessness has been run out of town, tarred and feathered.

Will never truly happen. Look at Wall Street for example. No matter how tough they make the current bill there there will always be people on Wall St. looking for new and inventive ways to make an easy buck in a shady manner. You'll get a period where it's a lot tougher to do so but eventually a new way to grease the system will come about.

[Greg B]

Originally Posted by TheEnforcer

Will never truly happen. Look at Wall Street for example. No matter how tough they make the current bill there there will always be people on Wall St. looking for new and inventive ways to make an easy buck in a shady manner. You'll get a period where it's a lot tougher to do so but eventually a new way to grease the system will come about.

Not if there ain't no system to grease, which is what that news item I posted is all about. Wall Street is about to collapse. Get out of stocks now and get cash and gold.

[RawAlex]

Originally Posted by TheEnforcer

Will never truly happen. Look at Wall Street for example. No matter how tough they make the current bill there there will always be people on Wall St. looking for new and inventive ways to make an easy buck in a shady manner. You'll get a period where it's a lot tougher to do so but eventually a new way to grease the system will come about.

The difference is that the relatively honest ones survive, while the ones who are playing loose and fast with the rules fade away. Like it or not, the clients for this business talk, and the scammers never last. Yes, they make a pile of money in a short period of time, but it doesn't last. Some of them end up paying out the ass (and some in the ass, let's not forget Jim Schaffer, is he locked up at this point?)

there has been demand for porn for a long time, and there will be for a long time to come. The methods shift and change, but in the end, it all remains the same.

[GJ_Servers]

I think there willl probably be more fallout from other companies with this sort of business model.

[Toby]

Originally Posted by GJ_Servers

I think there willl probably be more fallout from other companies with this sort of business model.

Oh yeah, there have already been others, and there will be more. WEG is just the first big name to choose this particular way of modifying their business plan.

All of these programs that have been based on big up front dollars with nothing substantial to support long term rebills will be forced to modify their business, or shut it down, if they haven't already done so. Many just won't be as dramatic and as public as WEG.

[Hell Puppy]

Somewhere a fat lady just cleared her throat.

[Greg B]

Had to make a bee line over here to your board Gonzo regarding this news and the timely death of X Sales.

I'd noticed a leap in signups and it coincides with VISA and MC putting the XSales in the dirt for good.

Then chatted with some other webmasters and found out the same from them.

This is going to be worth watching over the next several months. Not only that but a keen eye on what new scams may arise from the desperadoes out there.

[RawAlex]

I would say judging by sales this month, some of the bigger players may be short of processing or having issues. Some of my most reliable ones are suddenly complete duds, while other smaller programs are suddenly turning out signups like never before.

Makes ya wonder.

[Toby]

Originally Posted by RawAlex

...Makes ya wonder.

Indeed.

[Greg B]

Originally Posted by RawAlex

I would say judging by sales this month, some of the bigger players may be short of processing or having issues. Some of my most reliable ones are suddenly complete duds, while other smaller programs are suddenly turning out signups like never before.

Makes ya wonder.

That is EXACTLY what I'm seeing too!

I didn't know what was going on the past month and thought it was some fluke but now I know why. Things are going back to normal before this cross sales shit started. I knew something was weird when stats started dropping in 2007 and I kept getting attacked by GFY scumbags. Then to see the same scumbags then fuck over their own friends let me know I wasn't crazy. Now to see this cross sales shit fall off it is the icing on the cake.

[Greg B]

Here's a point. Look around and see how many of us have been here since darn near day-fucking-one. That says something. We argue and yell at each other but the bottom line is we're still here. The only problems have been problem people who are in the biz to fuck others over. They always get burned and end up wondering how they fucked up. Everyone on this board has skills and contributes. Even if we hate each other you gotta give the long haul webmasters their props for sticking it out.

[EmporerEJ]

Originally Posted by Greg B

Here's a point. Look around and see how many of us have been here since darn near day-fucking-one. That says something. We argue and yell at each other but the bottom line is we're still here. The only problems have been problem people who are in the biz to fuck others over. They always get burned and end up wondering how they fucked up. Everyone on this board has skills and contributes. Even if we hate each other you gotta give the long haul webmasters their props for sticking it out.

I'm pretty sure there's no one I "hate."
A couple I find "annoying," and that fat fucker that took all the donuts, but not really a "hater."

And I've been "here" since 1985.

[Greg B]

Originally Posted by EmporerEJ

I'm pretty sure there's no one I "hate."
A couple I find "annoying," and that fat fucker that took all the donuts, but not really a "hater."

And I've been "here" since 1985.

You've been doing adult online since 1985 or were you born in '85?

[EmporerEJ]

Originally Posted by Greg B

You've been doing adult online since 1985 or were you born in '85?

Actually, I was in the "VHS" video biz from 1985-1994, the BBS biz from about 92ish to 96, and the web from about 95 on.

I was born MUCH earlier.

What's scary is, IF I were born in '85, I'd be 25, and wouldn't that be great?

Ahhh, the days. 'course, if you look at my picture there, and think I'm 25, I musta' been rode hard, and put away wet, way too many times.

[Far-L]

Looks like WEG is not going to be the last of these. From what I hear others are going down fast as well. Whole business models are having to turn on a dime or perish.

I've heard people claim the affiliate model is dead. I disagree, because I think if anything it will just correct itself and return to something that is more sustainable over the long haul, more selective in terms of who can participate, and more valuable to both the program and the affiliates in the long term.

Just thinking positively?

Nope. Why would a perfectly good, time honored, marketing technique be obsolete just because some failed with it? Amway is doing fine after so many years as an MLM but tons of others have come and gone - and usually for similar reasons to what is happening in adult - unsustainable or sometimes illegitimate variations on a marketing technique is the fault of management, not sales design.

Thoughts?

[Toby]

I agree, the affiliate model will persist. I also think the 'correction' has been ongoing for a year or two already, just accelerated over the last few months due to pressures from the poor economy and the recent changes in billing policies.

[softball]

I agree with Far-L. Affiliate marketing is a fundamental of capitalism and will continue. It just needs to settle into a sustainable groove. I have been pounding this drum for years. Referrals are the basis of good business, but what other business pays such huge percentages? That is not a rhetorical question,btw. I was wondering if anyone else had examples that could further the discussion.

[Greg B]

Far L is right on target. For him to work in mainstream MLM is a tribute that he knows his stuff. That market is full of more crooks than a Batman comic book. I have seen the ravages first hand of that market and done lots to bring crooks in. It's sickening to see hopeful people fucked over stupid and the authorities dragging their feet. Adult is no where near the criminal levels of mainstream MLM and the affiliate model is a fundamental to sustainability and growth. No doubt there. Make something worth selling, put a decent price on it and allow others to sell it and nowadays you can be rich overnight. It's content and delivery without any bullshit on the side.

[Greg B]

Gonzo, how come your PM box is full? I know you're popular but how we spose ta' get hold of ya?

[gonzo]

Originally Posted by Greg B

Gonzo, how come your PM box is full? I know you're popular but how we spose ta' get hold of ya?

Ah all those chicks trying to hook up with me.
I clean it out.