Ramblings About Rates, etc.

[Cinesis1]

I am fairly new here, and fairly new to the Webcam Industry (but not the adult industry) and I wanted to start a discussion about rates.

This industry, like any other, is governed by the laws of supply & demand. Keeping that in mind, if there is a high demand (which there definitely appears to be) why would a performer, chathost, or company cheapen their rates just to gain business.

What I mean is, if a guy is WILLING to pay $2.99 to $3.99 per minute for a service, then why charge $1.99, or $.99 or lower (and yes I have seen some for lower)? Yes, I know that this makes you the "HOT" company or performer...especially the independents, but in the long run doesn't it hurt your business as much as help?

Here is an Example of what I mean:

Company A charges $3.99 per minute, does 10,000 minutes a month, and grosses $39,990.00 in a month. It pays its performers 50% (so subtract $19,995.00) and its fixed operating costs (let's use $.10 per minute as a round number...so this would be $1,000.00) leaving a net profit of $18,995.00

Company B charges $1.99 per minute, does 20,000 minutes a month, and grosses $39,800.00 in a month. Using the same pay rate & fixed operating costs (subtract $19,900 for pay & $2,000.00 for expenses) this leaves a net profit of $17,900.00...over $1000.00 per month less.

Operating costs are for the most part fixed, meaning we all have to pay hosting fees, light bills, merchant fees, etc. so why would you do this? It just has never made sense to me. You make more, the performers make more, and the customers still get what they want...Everybody wins!

I understand that a lot of "Independents" and people on some services set their own rates, and do this to gain market share, but is it really worth it in the long run? After all, this isn't like selling gasoline where the cost per barrel of oil is constantly fluctuating.

I am not trying to sound greedy, but I also want my company and my performers to be compensated fairly for their services.

Here's another Example:

A girl working for Company A doing 1000 minutes a month would make $995.00 for her time based on 50% from the above example.

A girl working for Company B doing 1000 minutes in a month would make $1,995.00 for her time.

Company B earns a higer net profit as well. The only one paying more is the customer who has ALREADY demonstrated a willingness to pay the higher rate. If the demand were lower I could see a lower rate, but this business is pretty much recession proof!

Just curious what everyone's thoughts on this are.

[Martina]

Hey Todd,

In Germany a lot of camsites now think about "quality". quality means tecnical quality (fast connection, good pictures) and also a good quality from the chathosts.

This point is very important, I think. If the customers see and write with "good chathosts", they will come back to this site. otherwise they try another site.

And- I know it from Germany, I dont know how it is in USA- the experienced, good chathosts work on the "good sites". good sites means a fast and friendly support, who helps you and - much money

So - if you are a german camsite owner - you have to pay your chathosts good money, otherwise they will work on the other sites. To pay them good money, your prices for the customers must be high and/or your site must have a lot of traffic.

In germany one of the biggest camsites (visit-x) changed their prices for customers from 1 euro/minute minimum price to 1,50 per minute minimum price (chathosts can choose now from 1,50 to 3,00 euro). and they have success with this, they have more customers than before.

best regards,
Martina

[Horny Joe]

[blueangel]

oops.. sorry for posting twice

[blueangel]

[Horny Joe]

Hmm... i don't see any reference to Germany in the original post.

By quality, I mean technical quality. Quality of host varies from host to host rather than from site to site. You might be better now than when you started but I've seen the opposite too. For example, a girl loses her enthusiasm for the job after some time.

The site is directsex.com. It's the best video I've seen so far. They work in studios and the lighting in most rooms is top-notch. There are drawbacks though. The fast video can't be better but there's a delay. What I do is open two windows. One for chat and see real time and another just to watch the fast, continuous video. The best thing is I can double-click on the video and it goes full screen.... but then I lose the chat window... just need to double-click again to go back to normal size. If the video is skimpy in full screen, you can fix it by lowering the frequency of your monitor. Just wish there was a middle size.

[Cinesis1]

Hmmm...maybe I shouldn't have posted this in this forum for "cheap" customers to see. Besides, my original post said nothing about quality as that sometimes depends on the equipment the performer has.

As far as window size goes...I believe the standard is 640x480 on most sites...so if you have your browser set to a high resolution then the window will be small. However, having your browser set any higher than 1024x768 is a waste anyway as most websites are gearded to a lower resolution and web graphics are generally only 72 pixels per inch.

You get what you pay for.

[Horny Joe]

Standard is usually 320*240. A few are larger but often it's only bigger pixels.

What you're missing is that the demand is not as high as you you seem to think. And no one is "willing" to pay more if they can get the same for less. I have paid all kinds of rate (as much as 4.99/min.) and I don't think the saying "you get what you pay for" is true. And remember that many models live in countries with average income around 100-150$ USD. They can get a lot more even working at 1.99$/min, so why should they charge more and risk not getting anything because their rate are too high?

Do the operating costs really work on a minute basis? Maybe I'm wrong but it doesn't seem to cost more for the site to have a model in a pvt show than it does to have her sitting there answering beggars. This means operating costs for company B would be 1000$ also and not 2000$ as in your example.

[Cinesis1]

Horny Joe:

Operating costs on most websites are generally based on the amount of bandwidth used through your hosting company, unless you are a big corporation who owns & operates your own servers. Even then you still have to pay for outside access to the internet through a T1 or T3 line.

Therefore, if you do 20,000 minutes per month as in my example with Company A and only 10,000 minutes per month as in the example with Company B, then Company A would be paying a higher operating cost than Company B because they are using twice as much bandwidth.

My example IS valid because it is based on usage. Operating costs generally have nothing to do with how much a customer is being charged except for the amount of fees that are taken by merchant banks for processing their credit card transaction. This is generally a percentage of the total transaction amount as well as a per transaction fee. Assuming that Company A is doing more transactions as well as double the minutes, then it stands to reason that they would have higher costs in this area as well.

I broke the operating cost down to a per minute cost just to simplify things for the example. There are many other backend costs associated with running ANY business that the typical customer is either not aware of or does not take into consideration when buying a product or service.

As far as your contention that paying less to a performer is justified by a lower STANDARD of living in some countries...I personally think this is bullshit. I don't think it's fair to pay a performer ANY less just because the "average" income is only $150.00. Why not provide them with the opportunity to make $1,000 or more per week, and let them rise above the poverty level? That's like saying it's ok to have children in Indonesia working in a sweat shop making $.12 an hour to produce the clothes we wear in the U.S.

Just because that may be a fair wage in their country doesn't make it right, and I think this could be considered to be taking advantage of someone in a situation that is less fortunate than our own.

[Horny Joe]

Bandwidth... precisely, sites that work on a free chat/pvt scheme don't use any more bandwith wether a performer is in pvt or not. Actually, the opposite is more likely. If you have 10 guys in free chat for 50 minutes and have a 10 min pvt show at 3.99/min, it would use more bandwidth than having 10 guys in free chat for 40 minutes but with a 20 minute pvt show at 1.99/min. In pvt, there's only one person watching so it uses less bandwidth.

Read my comment again, I never said it was right to pay perfomer less because of lower standard of living in their country. It's not right but that's how it works. No one thinks it's fair to have indonesians kids working at 12¢ an hour but we still buy the clothes produced by them. Again, if a model can make a good, err... EXCELLENT living with 1000$ a month at 1.99$/min, why should she risk getting less or no clients at all because her rates are higher than other models? You said it yourself, it's all about supply and demand.

I think guys buy time/credits/tokens as much their money can buy. So if they have 100$ to blow, they will buy for 100$, wether it's at 1.99 or 3.99. On the other hand, if he has only 20$, 10 minutes at 1.99 is still good while 5 minutes only at 3.99 is not very appealing and he might just keep that money for an indonesian made t-shirt.

[Geanyz]

joe, ur only concern is to pay as less as possible. lol
and those performer who lower the price r just not fully convinced they can get more, performing same services. they will change their mind soon

[Horny Joe]

Of course I want to pay less ... so does every other customer. You're a model, right? Don't you want to get more? and the webmasters, they want to get more too! Everybody wants more money!

[Geanyz]

of course u all wanna pay less, but u gotta think some girls r better ( every meaning of the word ) and deserve to charge more. U cant look at some dead skinny Somalia girl( ) on a fuzzy cam and pay as much as a good looking girl, with a good cam and conection charges. right ?
all im sayin is that dont u shouldnt put it all in general, each of us is a particular individual, with own personality (i'v met guys that would enjoy seeing a smart funny girl only laying and conversating, rather much than seeing her filling her holes up -- not especially talking bout me ). And girls that arent confident they can get more.. like i said.. will get tired of performing for less money

[blueangel]

Horny Joe,

I took a look on the site you said (DirectSex) and I was surprised about the low prices. 1$ per minute that you pay, means maximum 0.50 cents for the studio ( you told that they are all studio girls), so 0.25 cents for model, in the best case. God! This is really sad! In my country this is the price of a minute conversation by mobiphone. LOL

[Lorrie]

[quote="Horny Joe"]