A lot of it is to do with math for example...

$3 join - $35 payout = -$32

$32 + $2 (processing costs) = $34

So for each sale an affiliate sends, the program is automatically (on the PPS business model) $34 in the hole.

Lets say that 60% of those initial trials actual go pass the trial period and rebill, out of 100 joins, the program makes $100 initially (after processing fees), but they then payout $3500, of which, they make $2100 back in trial to full rebills.

Now, based on the fact that 99% of all PPS programs paysites members areas quite frankly suck, of that initial 60% that go to full membership from the trial, maybe another 60% of them rebill in to month 2 making the program another $1080.

The program made from 100 trial joins, $100 + $2100 + $1080= $3280, the program is STILL $220 in the hole from that initial 100 trial joins, that is IF 60% of them actual go from trial to full, that number is going to be much lower than 60%.

Now, take in to account how much bandwidth these PPS programs burn through on FHGs, hosted free sites, hosted promo tools, all of which affiliates demand they have, that is not even looking at content costs (exclusive and leased feeds) for a PPS program to actually make money they need to offer things like upsells and cross sells.

For as long as affiliates keep wanting to be paid $35+ on a 2-3 day trial, cross sales and upsells will be a part of this business yet, affiliates apparently do not like them, putting the program in a catch 22 situation, affiliates either get paid $35 per trial join with upsells and cross sells, or the program goes out of business.

That is one of the reasons why ill more than likely stick to revshare based programs as a company, less hassles in terms of payouts and accounting plus, if an affiliate makes money, i make money so im going to do my best to ensure that the sites i put out sell, as a revshare program owner.

Take a look at the same 100 joins on the standard 50% revshare business model...

$29.95 join - 50% payout = $14.97

$14.97 - $2 processing = $12.97

So for every 100 joins sent to a revshare program, the owner initially makes $1297.00 no matter what.

That doesnt even take in to account rebills which are significantly higher on revshare programs sites because more effort is put in to the members area than on PPS programs sites where volume and turnover is the key business model.

Could a program owner use that money they pay their affiliates to build their own source of traffic? Sure they can, but at the same time, so long as they are offering trials, they are always going to be in the hole, more often than not, by offering $35 trials they actually get access to a much broaded range of traffic sources than if they were buying that traffic directly and, there is less 'loss' to them if that traffic doesnt convert.

For a PPS program to make money, the member HAS to rebill twice, thats why they offer upsells and cross sells on the join page, its typically easier to bill more than to put effort in to building a quality product, so that is what they do.

For a revshare program to make money, the member just has to join.

Regards,

Lee