ColinP wrote:Visitor numbers are stable - the costs for running the Forums alone are over half of the total outgoings for all of the sites. Each content-driven site we own MUST pay its own way otherwise it would be closed.
Over the past few years we had built up a financial buffer with the profit the site made - to ensure that if the worst happens we could keep running for a decent amount of time. That buffer stopped growing at the end of 2006, and the rate of affiliate conversions since then has decreased by 33% (66% since the start of 2006). We have cut costs where possible (retired one server) and therefore we haven't hit that buffer yet, but this is the crunch year for us and we'll be eating into our reserves if things don't pick up. Once that happens The DVD Forums is on borrowed time.
There are three causes for this:
1. Affiliate conversions are down - clickthroughs are reasonably steady so we're getting the clicks, but people aren't buying.
2. There aren't as many huge bargains as there were
3. Ad blocking preventing things tracking properly and therefore the loss in sale attributed to us
Point 1 is the main concern for us - we're losing out affiliate sales due to people finding bargains and clicking on them on our site and then trying to reduce the overall price even further by going through cashback sites and the like. We want to maximise our potential income before we start looking at things such as charging for access - doing this would be totally against what we have tried to do with all of our sites.
We've relaxed the rules here as much as we legally can now and all we are asking is for people who use the forums to have a little respect and to try and give something back - we're not asking for money, we're not asking for you to use our affiliate links every time, but we would appreciate that where you can you support the service we provide to you.
The only reason we try to bring in as much cash as possible is to fund the Forums - it's really that simple. This isn't some huge money-making scam and it isn't something that would ever let any of us live in luxury.
I thought it'd be worth returning to this thread for a financial update.
Up until December we made a consistent monthly loss - our outgoings have been more than our income. This obviously isn't good news and is of great concern if this trend continues.
There is <i>some</i> good news in that October-December saw affiliate income increase to more reasonable levels and when this income is paid to us (as long as the companies that owe it don't go belly up in the mean time), it will off set around all of the losses we've made this year so far bringing the site back to a roughly even keel. We're hoping this all gets paid up before the end of the financial year (March) in order to keep our yearly loss to an absolute minimum.
Unfortunately, since Christmas, our affiliate earnings have plummeted to around 25% of the average during December and at that level we won't be able to sustain the sites for more than a few months. If there aren't improvements, June 2009 is likely to be the point where we'll be forced to make a decision regarding the future of our major sites. My worry is that we're going to see even greater drops in affiliate income from February onwards as the economy tightens even more and that will be devastating for the site(s).
In terms of the wider affiliate market, the playing field IS becoming more level. Voucher sites now have a strict set of rules to stick to (which we've actually adhered to for years - hence the apparent stricter stance of DVDF regarding bargains) - sites that don't stick to these rules will eventually be removed from affiliate programmes. Likewise, cashback sites are also being hit with new specific commision rates which will reduce the amount of cashback to end users - and <i>some</i> merchants and networks are looking at these cashback sites closely as they're actually costing companies more money than the value they bring. These rules have been a long time coming and will hopefully make the whole affiliate marketting world more fair.
There are a few cowboys still and they're the sites that make the biggest money unfortunately - they don't stick to the rules that the rest of us do stick to, and they're so big now they can dictate terms in some instances. Some of these sites have or are being sold for millions and those figures alone should indicate the huge effect their existence has had on smaller content-driven sites like this.
We can't stop users looking for savings elsewhere, but all I can do is reiterate the importance (to us) of you using our links wherever possible when making purchases. The future of this site and a few others is entirely in your hands now so if you want DVDF to be here this time next year, please consider the above information before making your buying decisions