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.