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- By this I mean sites such as atomfilms.com. As school is in session once again, I have regular access to a computer with a 300K/sec connection. I can’t watch the hardcore porno stuff, but during slow class time general wierdness with light nudity is okay. - And there’s a bunch of these types of sites, and all they do is suck up bandwidth. Last I heard, net banner rates had bottomed out to a few cents per hit for just about any site on the net. What do these people do for money? - MC
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A few cents a hit may not sound like much, but you can rest assured that it’s enough: If it weren’t, the site wouldn’t stay in business. There’s two things to remember: First, they get a lot of hits, and those pennies add up. Secondly, a web site has much lower operation costs than a conventional business, so they don’t need to bring as much money in. You’re talking possibly a few thousand in capital to buy the computer, if you want to host it yourself, plus some amount per month for your bandwidth-- I would wager less than $100 a month, but I don’t know for sure-- plus salary for anywhere from one to a dozen people.
Who said web sites have to make money? Many of them don’t.
Tampa flyer, if it didnt make money, it would be a .org or .edu instead of a .com
I think that atomfilms.com(mercial) makes money from BANNERS, SPONSORS, and from different corporates…
from the intial costs, maybe less than 3,000 a year, they probably make that much in a week or two, and those salaried workers probably don’t get salaried, but are probably hobbiests that are getting a meaber 7.25 an hr for webpage design. anyhow, my own $0.02
Yes, not to turn this into yet another groan ‘Napster thread’ but it is essentially the same question. That is, how does Napster (or any site with no advertising banners) make money? The answer is that they give away the service, get you interested in it, and then the business plan will likely suggest (after you’ve established the product/ service has some value to you) that you pay a nominal subscription fee per month to continue to use it. Or perhaps (depending on how great the movies clips are) a pay-per-view type billing system. Of course, this is just the electronic version of the gym that gives you the two week trial membership for free, or the drug dealer who gives you your first injection/ snort/ reefer for free, and then jacks up the price.
Really? I don’t think anyone bothers to check that a “.com” domain actually represents a for-profit company. As a matter of fact, I know of several non-profit groups that have discussed getting a “.com” site because many people have the (mistaken) idea that every website address ends in “.com”.
As far as making a profit, many websites don’t, even amongst the biggest. Has amazon.com ever turned a profit? I don’t follow business news that much but I had the impression that amazon.com has been relying on venture capital and not profits since day 1.
If you think a big website can be run for a couple of thousand bucks for a computer, plus $100 a month for bandwidth, you’re nuts.
The minute any website grows beyond the hobbyist level, the costs skyrocket. $100 a month bandwidth is acceptable only if you don’t care about unscheduled downtime, and if you get relatively few hits. If you need a dedicated connection with guaranteed throughput, you’re into the multiple thousands per month. The bigger sites like microsoft.com have multiple T3 connections, and probably spend over $100K per month for bandwidth. Obviously, a site like atomfilms that provides streaming video will have to have a large amount of bandwidth available.
Even a T1 connection, which is roughly the same speed as your cable modem, will cost you over a grand a month in most places. The difference between the two is that the T1 is guaranteed to be stable and have a certain amount of throughput. Cable and ADSL are cheaper because the throughput is typically never guaranteed, and unscheduled downtime can be common. Many cable and ADSL providers won’t let you host your own web site anyway.
Hardware is expensive. If your site is even moderately successful, it’ll soon grow beyond the capacity of one computer. Even a smallish E-commerce site will typically have a database server, a web page server, and dedicated servers for active content like streaming media. If the site is even moderately successful, you’ll need a server farm with multiple web page servers and a transaction manager. That means your development costs go up again, because writing transactional business objects in COM means you get to hire about the best-paid developers in the business.
Oh, and if you want to host your web site on your own machines you need two DNS servers as well. BTW, these computers are not cheap. Server machines are not like home boxes. They need hot-swappable drive bays, redundant power supplies, ECC memory, high capacity cooling, perhaps a rackmount case, etc. Just the case for a decent server computer can cost $1000. I just went to a seminar for IBM’s new Minicomputer-based web solution, and their ‘low-cost’ solution starts at something like $70,000 and goes up rapidly.
Then you need the software to drive it all. Again, once you get past the hobbyist level where you can use stuff like Microsoft Access, the costs skyrocket. Go check out the cost and licensing requirements for Oracle or SQL Server.
While we’re at it, let’s not forget a high-speed network to connect them all, enough UPS backup to keep the site running for several hours in a blackout, redundant drive arrays so a flaky hard drive doesn’t bring down your web site, a backup system for your data, and the salary of an IT guy to keep it all running.
Then you need the site to be developed. Again, the minute you get into the level where you need user logons, secure connections, databases, etc. the costs skyrocket. The average E-commerce web site costs about $250,000 to develop, not including ongoing maintenance. Some of the larger sites have spent millions on their design.
Speaking of maintenance… You need full-time web developers to manage content, copyrighters to add new stuff, business managers, buyers to evaluate 3rd party content, lawyers to draft agreements, accountants to pay everyone, etc. None of these people come cheap. Then you need a marketing person to formulate strategies for getting your web site known to the world, to evaluate traffic and do hit analysis for feedback to the web developers…
Let’s not forget Quality Assurance. For even a medium-sized site, you’ll often need a full time person or two to check for broken links, document procedures, test new pages against a testing framework (multiple browsers, multiple connection speeds, etc).
Then we get to pay for marketing. You have to advertise somewhere, and ads are not cheap. Amazon is still in the red largely because of its huge marketing costs.
This is why so many web sites go broke. At first glance, it looks cheap. After all, a kid with a few spare hours and a home computer can put up a web page that looks just like Amazon.com. But as the business grows, it has the same expenses as any other large business. The only thing web sites lack is storefront space, and once a company gets to a certain size that’s a trivial part of the cost of doing business.
The web sites that are going to be really successful are the ones that focus on re-engineering existing transactions to make them efficient. Business-to-business transactions make up over 90% of the web economy. There are real savings there. But most of these other web sites with shaky business models and vaporous income streams are simply doomed. The fact that amazon.com lost $30 million dollars on revenues of $400 million should give any potential web entrepreneur a serious case of the willies.
Yes, if you get more hits, you’ll need more bandwidth, which will cost more. You’re also showing more banner ads. Some websites would, in fact, require multiple servers, specialized equipment like hot-swappable drives, etc. Some don’t, depending on what they’re trying to do. The Microsoft web site is surely expensive, and the site itself probably doesn’t turn a profit, but they’ve got a whole conventional company behind that site, pouring money into it.
Another revenue generator for web sites like napster and atomfilms is technology. If they come up with a patentable idea and license it to other companies, that will help the ship stay afloat.
Or there is the sleazy approach - patent every damn thing you can think of (one-click purchasing, yeah that was OUR idea) and sue anybody who does anything similar to it.