
Originally Posted by
KatyBoleyn
There's still a lot of misconception about how traffic and money on SM works. I realize there are a lot more intricacies, but here is the basic idea:
You put your ass on cam. Your interest is for the traffic in the room to spend money on you. SM places you based NOT on your earnings, but how well you convert traffic and how much interest the traffic takes in you. Its almost the same thing as your earnings, and there is a correlation/causation, but there are slight and fundamental differences in logic at play. This is determined by a formula that is constantly tweaked by people that may or may not be mathematically qualified, but they get it mostly right most of the time so who cares. They're also kind enough to very transparently spell most of this out, whether models choose to believe it or not.
Through any number of means, affiliates push traffic to the site. Their interest is for that customer to part with their credit card details...AND spend money. The affiliate doesn't make money if you don't. SM doesn't make money OR spend money on the traffic if neither the model or affiliate make money.
When a customer spends money, cuts are generally as follows:
35% to model/studio
35% + signup bonus to the affiliate
28-30% to SM. From that comes all accounting, tech support, customer service, umpteen girlfriends/relatives of people drawing salaries for no reason, swallowed chargebacks, fraud investigation, occasional large market ad buys (TV commercials), databanks and hardware, affiliate program managers, credit card processing, taxes, handful of competent people that keep the gears turning - all of this is standard corporate overhead you can find in any large company. Sometimes they even make a profit.
Bottom line is they AREN'T making an incredible profit off you - just one barely big enough to keep investors interested. The affiliates need enough to keep interested and not drive that traffic to other sites (a challenge with the difficult conversions), and the high percentage is the secret to SM's success so far. CB and MFC pay higher percentage to models, but their ratio of spenders is abysmal, as is the ratio of models that actually make consistent money on those sites - you have to be hyper competitive to make them work well for you (like doing your own social networking...you know, marketing yourself).
Here's the kicker that Sam keeps alluding to...SM pays models BETTER than their affiliates to drive the traffic if the models are willing to do so. You really can't beat that. Traffic driving is no joke, hubby and I try it once in a while and get beaten back each time. SM needs to keep affiliates getting a big piece of the pie in order to bring that traffic. Bringing bad traffic wastes an affiliate's time and energy as much as yours dealing with them, and SM doesn't (and shouldn't) care either way because they're not spending on it - you are, BUT, only when you make money.
Another dirty secret about who gets away with what we figured out. SM itself doesn't police their rooms that well as the workload would be incredible. They actually count on jealous models, miffed customers, and rival studio staff with too much time on their hands to send the reports. In this, nobody is immune to warnings or suspensions, no matter how much money they're raking in (and we have several personal examples of models hitting #1 to be suddenly nailed with a suspension for something - really deserved or not). Being a top model makes you even more of a target if anything.
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