Cost and expenses related to starting a camsite/ mgf project
 

Hey guys. Enlighten me a little bit. What are the additional expenses/ operating costs of these kind of sites?
Imagine all development expenses are covered, design and marketing.
Most of them use segpay, ccbill, epoch.
Payment processors take 14.5%
On mfc, cb the girls get 50%, on streamate30%, mygirlfund, 65%, customs4u 70%.

Why are the commissions for the girl different depending on. The sites. What other expenses are to be considered? I mean besides salaries of the owners/ workers, hosting.

What is the industry average net income ?

How can the sites that pay over 65% can make it?

Early bump ;)

You are not taking into account the amount of traffic each drives to the models and the $$$ spent on generating that traffic.

Also, all the examples you provide calculate the costs they take out before the profit/net calculation is derived, so they will have differences there too.

Thanks for the comment. Can you elaborate more on the sites? I mean, they obviously take all the cost out before distributing profits, but why does mfc or cb pay 50% to the models and elm or mgf or customs over 65%? Is it because they have higher margin? Is it really profitable to pay 65% to the model while the processor takes 15%... Leaving 20% for the affiliates and operating costs before profit?

It all depends on how much is spent on getting customers to the site, in other words traffic... that's mostly what determines the various parts of the equation.

none of the big sites are paying 15% :2 cents::2 cents::2 cents:

i would say you need at least 1 mil to start a cam site, or a really impressive a programs,

and big sites dont pay 14% to ipsp they get discounted deal as volume grows..

buying adspots and bulk traffic and hiring inhouse affiiates to generate traffic .,

cams is risky game , you need (qulality) traffic and models at the same time , else you lose.

also in cam site you have to pay affiliates and cam girls .

and gotta offer some great % to attract more affiliates and cam girls, offer whitelabels ,and webmasters will jump on your cam site.

but cam sites do make shitload of money,

id say your best bet is to build a whitelabel, getting from around 30% of revshare and investing your money in traffic is better than building from scratch.

Thanks for the replies. I get that thr big sites gwt better %. How can a nee site get lower %? What about elm and mygirlfund? They have no affiliate programs. ... What should be done? % can't be lower. Models think 50% is low considering they can make more elsewhere.
Btw why streamate pays 30% to the models? Is too low

what the guy above said LOL...why get only 20% as the site owner when you can get 30% as an affiliate and do less work?

mygirlfund is dead as fuck...models will always think their % is low because they are stupid and self entitled...they think traffic comes from thin air and that "they do all the work by sitting on their ass"...

SM pays 30% to models because 30% of something is better than 50% of nothing...

Because as an owner you get more fromw hat your affiliates refer, whereas as an affiliate you may get only 5% for referrals at most besides your aff %

why not start with a whitelabel on your own domain, build traffic, earn money and then switch someday if you feel you would be doing better that way?

what ^^ said.

cam site is on my to do list,
and i dont need 1 mil bucks to start it, if you can code and design then its not that hard.

hard part is traffic and cam girls at the same time.,

so i would suggest start a WL then build traffic as much as you can and when you get your WL within 10k-20k alexa then you can always make yourself brand new cam site .

best wishes.

If you have to ask....

Tbanks for the suggestions guys... Well we actually have had this project for quite some time. When we started some girls expressed theit desire to be on board... Some still have and have expressed their interested in bringing their fanbase. Actually the site will be different in many ways than what currently is out there. However, some think that the % should be 70% which makes them wanna stay on mygirlfund.
We are finishing the product next month.

One question..if you were to pay a monthly membership of 9 bucks and get free pics on exchange and access to make transactions on the site.. Would you join? What about you as affiliates? Getting the 20% of the monthly membership? Btw, mgf, elm do not have affiliate programs

Disclaimer: I start and direct cam sites since 10+ years. And I do talk with some cam site owners and so what I am writing it comes from actual sites financials, of course not going to tell who or details.

Code and design is not the real issue or cost of starting a cam site. Unless you hire the wrong developers that will eat $100,000's producing bugged unusable code (it happened to some), you can have functional custom cam sites setup with few $10k's at most. But then, it may be a dead cute empty site no one cares at.

The $1 million you (and others) stated, it is still required anyway, because of "traffic and cam girls at the same time". Models and studios will care to you only if you pay tyhem bonus and fixed fees at start, no way they sit in empty site for more than 3 days. Same with affiliates, you need to give $5 per free user or $150 PPS or such - really don't rely in affiliates, most cam sites rely 80%+ in simple direct traffic purchase, media buys, so cash counts, that's it.

Cam site is not like prerecorded member area or tube content: this is much like facebook or skype, if you code a perfect copy of fb or skype with no users, no one cares to that, even if you can code the same 100% - and sure you can't fill with recordings. Whoever launched cam sites after 2009 or so, it failed unless invested (had loss of) no less than $50k per month in first 6-12 months, and still you can waste such money and make the cam site fail if you're not a smart media buyer and got the wrong "friends" who really waste your cash.

About the % think, no, no one can make profit in a cam site giving 65%, it is just to look cool but the owners normally have other money source, that's not their job to run a cam site... that's why streamate gives 30%, that's a real cam site which is a real job for its owners :)

Good post and right on the money.

I think $1 million is very conservative. $5 million might be a much better starting point. Under capitalization is the death of any business - especially a camsite that will need to compete with much larger sites for traffic & media buys.

good points,.

Really great points... So a 50% would be enough to actually turn a profit?

Do affiliates only make money based on signup in most cases? Or a rev share? I have seen sign up mostly

I've had some first hand experience with running a cam site during the past four or so years too, even used to run two studios back in the day (but that was really old school 2003 -4)

The assumption that you'll make the cam site earn based on a pct. / payout whatever projected number or business model is not the way you want to be thinking. In fact, as long as it makes arithmetic sense, it's not really that relevant to achieving your goal - turning into profitability, as there are way too many variables that come into place.

Content - as mentioned above, the content costs for a start up site can run up to 100k a month easily, if you want decent models it will cost you $ that you won't make back anytime soon, no matter if you offer them a salary or offer your members free tokens etc.. Decent models means not only looks but also pro setup, attitude, entertaining, personable, decent language skills, well managed.

Big established studios may not work with you unless you got good references and can guarantee them frequent (say weekly) payments, at least for the first months you work together, too many got burned with new sites offering them a great deal, closing down and never paying up.

If you don't want decent models you can sign up a bunch of Phillipinos but in that case your site will die a painful death. And that is only the content alone that is necessary for you to be even able to convert anything into some $ back.

Traffic - you're competing with companies that have their ad budgets in millions, of course it can be done but again be prepared to burn a major amount of money before building a recurring member base that starts spending. An experienced and reputable ad buyer or even better own traffic is worth gold.

Development - if you think you can put together a script and off we go it's also not the way it works. The site and server setup must be extremely robust, any downtime or acting up loses you customers that will never come back, traffic landing on a site with downtime is a irreversible loss. This will also make hard to keep performers in tact, and increase your chargeback ratio.

Therefore the setup and architecture should also come from somebody who has a first hand experience with actually running (not only coding) a cam site. You will also deal with many issues among the way, there will be DDOS attacks, lots of fraud attempts, you will need to tweak the site for better conversions and retention. So the idea that you put something up on auto-pilot and do basic support and server maintenance won't work either.

Fraud / support - as a new site you are likely to be targeted by any means of fraud, this is customer fraud as well as performer fraud. You need to keep in mind that anything that can be abused will be abused. Your chargebacks ratios are likely to be high (which can get expensive with VISA and Mastercard charback management fees), and it will require a continuous attention, on a daily basis to keep the ratios in tact.

Models need to be not only carefully picked but also constantly monitored and you need to weed out those that don't perform and look for any way to abuse the system.

Administration - variety of payout options, payouts must be on time, no mess up allowed, you need to have a reserve at hand, be extremely attentious and accurate, be ready to compensate for downtime or any other tech issues.

Any of the factors above not working properly and the whole operation will collapse like a domino.

All and all, you need to be prepared to bleed financially for at least a year, including the glory of running a 24/7 operation where anything that can go wrong does go wrong in the worst possible time frame, and usually coupled together.

And that if you are experienced and know what you're doing, can avoid the countless pitfalls of running a live cam operation. As for budget I would say $5 M or better $ 10 M for a start up at least. Of course if you're very smart or have your own traffic you can start and operate on a smaller scale.

But if you're starting with nothing it's pretty much all in.

I can only tell you on the server side.

You need a full dedicated server VPS or Shared won't hack it because you need Java and Red5. So you are around $150 a month for the server.

Also for the software it's about $700 for something decent.

I have heard of a php based cam script that doesn't need red5, hit me up on Skype if you want a link. If it works than you could use it on a high end shared plan. The software is $100 I think and hosting would be $25 a month.

This question is like asking "what does it cost to open a restaurant"

IF you are a smart restaurateur, that understands the biz inside and out, it can be super cheap and super profitable. If you are just a guy who wants to open a restaurant, you'll likely be making the most costly mistake of your life.

Starting a business is not hard. Making it profitable.... a completely different story. Anyone can start a cam site. The odds of you starting a cam site and succeeding without a solid understanding of the business?... not even worth betting on.

Something to look at with those sites is they have very different business models.

To compete with MFC, Chaturbate, or Streamate, you'd have to do something really remarkable with a heck of a war chest of funding to burn through. Those guys really know what they are doing. Even amongst those sites, you will see very different business models e.g. Free with tips, free with advertising, pay only, female only, female/male/couples, female/male/trans/couples etc. Keep in mind that % here has a complex relationship with scale.

A site like MyGirlFund or Customs4u is much less capital-intensive. Talent can post an offer and they don't have to sit online 24/7 waiting for a customer. So the traffic and models do not have to be as aligned for timing. In addition, you can do thus type of site on a much smaller scale with much smaller start-up costs. Someone using your site could sell Skype shows to be scheduled at a later time. Basically, real time versus time-shifted is where the big cost differential comes in.

When thinking about %, think about how much work you are going to do. The one piec of advice I was given starting out, which I wish I had taken, was don't count your time as free.

Thanks for the comments. I'll keep you updated on any news. Thanks!!!! Anything you would like to add please let me know.

Btw, Amelia, what sites have you worked for?

I would look at it like this... if you can't send 50 joins a day to an existing can site...... then you can't spend 100k starting your own operation and make it work. Without traffic and significant experience promoting cans, it doesn't matter what start up costs are.

And trust me, countless people have tried and failed. It's a tough business on every level which is why there are so few successful can sites to begin with.

the most the owner is going to get is say 10%...

30-35% absolutely must to go the models no discussion

also 30-35% to affiliates ...no affiliates=no traffic=no site

so AT BEST you are left with 40%...billing is 10% if you are lucky...chargebacks are 10% if you know what you are doing...operating costs are 10% if you live in the 3rd world and can hire people cheap...

the owner is left with 10%...max...

it is actually more profitable to be an affiliate...

You can spend as much or as little as you want to.

It's not the cash you start with, it's the people you start with that make or break you.

If I told you how much money I started with you'd call me a liar and if I told you how much I make now you'd say the same.

You need to either have, or buy a good team. That's the thing. It's not a one man job in any possible scenario. A successful cam site has a successful studio, successful affiliate program, and successful software platform with billing integration and a successful billing strategy.

And they all have to come together at the same time. Any one of the above are a challenge for anyone. Pulling them all off at the same time is quite a trick.

The lowest risk approach would be to create a paysite, get a performer or two to entertain your paysite members, and set up a little camsite on a separate domain for them. Do it like a side project. As it grows, add performers and other stuff till it can stand on it's own. That is what worked for me, and it's still working. Not perfectly or anything but it pays my bills.

This advice is gold :2 cents:

1) Buy a short memorable domain
2) Create a White-label and start generating your own traffic that can earn the amount of joins suggested above
3) IF you reach this goal (highly unlikely) then you can start to consider starting your own camsite assuming you've a great understanding of every aspect of the business and have the income stream developed from your White-label to hire excellent staff.

if you are going to drive lots of traffic to your site it will cost you a lot of bandwidth. So take that in account too.

Guys, I believe the OP's core competencies are in model recruiting and not in traffic generation, so a white label would not be useful for what she would like to do.

interesting thread

Putting adverts on the site.

Also selling data.

If you have a good source of models we can work a vested referral deal "lifetime" with you possibly.


However: How much money do you have for development and a marketing budget?

I have a new site API with a possibility of 8 distinct partner supplied HTML layouts using our API applied to your template.

Your models your marketing.

My IT, servers, bandwidth, billing/payment processing and customer/model support 24/7. No traffic leaks that are not yours.

80% your share and 20% ACweb(us). An acceptable conversion rate and traffic volume 10K hits a day minimum within 90 days that are not bounces.

This offer is not for wannabes ... You need cash and a solid working knowledge of the adult web cam business.

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