Live Cam Sites: Revenues on The Decline?
In the business of sex and porn, the mantra of “pay more to see more” has been used both off and online, a trend that has steadily increased over the years. Let’s analyze the lap dance for instance. You enter into a transaction with a lovely maiden who in return for a set fee will provide you with a set time-block of dancing and “entertainment”. Now, the maiden usually plays it smart. She will use this time to get you totally excited and she will do her best to bring you to just before your brink when the time runs out. So, what do you do? Do you go back and join your buddies without satisfying your needs or do you pay the fair maiden some more to keep the party going?
This same concept hit the online porn world a few years back with a bang. It seemed as if overnight live feeds with upsells and cam sites were taking over the adult Internet. It was an ingenious concept for the online world and it made the first pioneers millions of dollars. There seemed to be a perfect fit for the “pay for more” idea to slip right into the folds of the other types of money making activities in the online porn world. It was easy to attract willing participants to perform these shows because they were able to perform from the comforts of their own home with just a computer and simple webcam. There was also no shortage of customers who were willing to grab their credit cards in order to be charged per minute to view an online performance.
The craze caught fire and from the onset the cam site revolution began. Webmasters were making obscene amounts of money just promoting these types of sites. Surfers became more and more confident in the security of online credit card transactions and then started charging per minute shows like crazy. More and more potential performers began to see the ease with which they could set themselves up and the potential for making large amounts of cash. iFriends basically took over the industry and then left room for all of their followers.
This concept grew and grew and grew until last year. In the past year the whole craze seems to have fizzled and died down considerably. Webmasters have started to notice a decline in their commissions from these types of sites and they most definitely have not been on the forefront of the porn agenda in the last little while. Why is this? Is this just the beginning of a downward spiral for the pay per minute live chat sites, is it just a leveling off in growth, or is it just market saturation? The first question requires an in-depth look at how these cam sites operate and how the revenue is made.
Let’s examine the process that occurs when a customer uses a cam site. The customer, let’s call him Mr. Smith, logs onto the site, views bios of various performers that are online that he may choose to watch, and then picks one. Now Mr. Smith enters the performer’s “room” and gets to usually see a free show that is available to all and not private. In this free show, the performer will tease the potential customers and flirt through the chat portion trying to entice someone to enter a private pay per minute show with him/her. Mr. Smith decides that he likes what he sees in the free show and would like to view a one-on-one private show with the performer. He enters the private “room” and immediately starts being charged a per minute fee. Once in the private show, Mr. Smith is able to view a customized performance and may tell the performer what he would like to see. In most cases, the performer will adhere to the customers’ wishes. Now, Mr. Smith wants the performer to hurry up and get to the action, but the performer wants to draw the session out so that he/she can make more money. So, before he knows it Mr. Smith has spent an hour in a private show in which he is being billed a per minute fee. Let’s say this fee is $2.99 per minute (average for the industry). This means that Mr. Smith has just shelled out $180 to watch a one hour show that is poorer quality than watching a movie on a TV screen and less personal than going to a strip club. Now, can you see where things may start unraveling for this cam site concept.
First of all, the number one threat to the cam site operation is the chargeback. The chargeback ratio for cam sites is astronomical. People get carried away and lose track of how long they have been charged per minute and then wish to dispute it and receive their money back. The second threat to the cam site is the fact that surfers in
On the other hand when looking at decreased webmaster revenues is market saturation. The technology to setup a live cam operation now a days is cheap enough for any Tom, Dick, or Sally to do it themselves and try and compete with the larger companies. I think not only are surfers ready for something new, but webmasters also.
There may be hope yet for the cam sites, a re-birth so to speak as more and more consumers in
