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define dead?
if it IS dead, then the answer from your friends would have been 0% revenue, not 15-17%.
first, if your business model is based solely on other people selling your product in a saturated market, then you should pick a new business or find a job.
from a revenue standpoint, having affiliate is nice as it does bring in more business, but probably just as important is to increase branding and awareness. ever seen the content from Brazzers compared to anyone else? almost identical, just different models and backgrounds... but people KNOW Brazzers from tens of thousands of affiliates pushing their sites. so if you go to choose a site to join, unless its a specific niche, you as a consumer are likely to choose a brand you are aware of -- marketing 101
I don't think the "affiliate model" is dead, it's just significantly smaller due to less affiliates in the game and bigger players owning the space. almost every program has their own huge network of sites from TGPs, blogs to tubes pushing their content; where as before, they relied more on affiliates for that.
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