As much as some of the sponsors want to downplay the new changes I think this will drastically change our industry in numerous ways.
The worst offenders with deceptive billing and bad customer service have their days numbered. They'll only be able to switch company names and merchant accounts so many more times before their time is up. I think it's obvious that the days of multiple cross sells are over for most companies. However, realize that we really won't see companies dropping like flies untill sometime 1st quarter of next year. That's when the new regs, if in effect, will take it's toll.
As we have already seen, some companies are decreasing their payouts. I don't think there is necessarily much correlation between those companies that are decreasing payouts and supposedly straightening out their billing practices and those that will ultimately survive. We'll see lots of businesses go under and I wouldn't be surprised if there was some more consolidation in this industry since it's matured quite a bit.
I think previous transaction history will doom some companies and 3rd party billers portfolios. Chargebacks are calculated on current month volume despite the back you can get chargebacks from up to 6+ months of previous activity. If companies are really getting rid of some trials and cross-billing then their transaction count will be greatly reduced. Undoubtedly most programs will come up with some super cheap billing option or product just to increase their transaction counts... with the idea that having a super low price point makes doing a chargeback a mute point. I think that ultimately it's not enough to dissuade 1 out of 100 purchases from charging back whether it's a $5 purchase or a $40 purchase.
For most companies I expect that we'll see a decrease in overall consumer pricing. No fucking website is worth $39.95 per month, we all know that the consumer pricing is less a derivitive of actual demand and 'value' and was more a reverse engineering of pricing that would allow affiliate programs to pay more for affiliate traffic. The affiliate program business is very competitive and those high stakes are what got the industry into this situation... aside from the obvious greed and fraud on some peoples parts.
I wouldn't be surprised if we ultimately saw PPS leveling off to $20-$25. More programs if they're smart will put a new emphasis on switching over to their recurring programs. I honestly don't think that an affiliate program has to do much of anything but survive to ultimately thrive. I know some people would disagree but in my opinion those that are around next fall will have more market share all to themselves.
People still need and want porn. So, one way or another the money will still get spent online. Ultimately we'll build some new mousetraps and those adult companies that are innovative will be around for the long haul. I'd expect that we'll see 1-2 more billing methods introduced in the next 6 months... all affiliate programs needs another billing option, even if it's not a magic bullet and it only ends up being 10% on their volume.
I think we're far from seeing the last 3rd party billing company go tits up. Aside from the big guys like CCBill, Epoch, PSW, Jettis and IBill there are still another half dozen or more 3rd party billers. We'll see, maybe we'll find out that some of the smaller third party billing companies have been doing a more conservative job managing their portfolio. On the bigger side of things, I wouldn't be surprised if we saw IBill pull out of adult and at least one large processor fall and take out alot of webmasters with them.
These are challenging times for everyone... For me, honestly, the changes don't really change anything. I've always had constant pressure to one-up everything I'm doing. To rest on laurels is always temporary, only innovation and perseverence will continue to pay big dividends in this industry as it completes it's transformation to the next part of it's life cycle.
That's my 3 cents.
Cheers!
Brad
P.S. - I'm launching a paysite affiliate program shortly
