Rumor: Stars is gonna kill rev share (existing) for affiliates today.

[Shizzmoney]

Tweet below from P5's Adam Loeb:

Rumor has it Stars is gonna kill rev share (existing) for all or most affiliates today. Bloodbath. But not surprising

Embedded Tweet

https://twitter.com/AdamLoebSmall/status/594149618188996608

Try not to look at the Stars news as one company acting pathologically monopolistic. Their behavior is entirely rational. Need competition

PokerStars lifetime rev share is becoming only 2-year rev share. All existing referrals included. Starts June 1

Stars has always been picky about it affiliates, but just goes to show that once Amaya IPO'd and bought it out, they there is only one thing on their mind right now: and this is cutting the fat.

[Dan Druff]

So are they doing away with rev share forever, or is it just becoming a 2-year deal instead of a lifetime deal?

But yeah, I agree about Amaya. They are analyzing the "old" longstanding Stars business model and trimming away any expenditures which weren't carrying their own weight.

I don't blame them. While Stars was/is hugely profitable, there was a lot of waste. I have been saying for years that sponsored pros and affiliates aren't generating the value that they are being paid (at least not for large sites like Stars).

[abrown83]

So are they doing away with rev share forever, or is it just becoming a 2-year deal instead of a lifetime deal?

But yeah, I agree about Amaya. They are analyzing the "old" longstanding Stars business model and trimming away any expenditures which weren't carrying their own weight.

I don't blame them. While Stars was/is hugely profitable, there was a lot of waste. I have been saying for years that sponsored pros and affiliates aren't generating the value that they are being paid (at least not for large sites like Stars).

I agree about the pros big time.

Would be interesting to know how many sign ups came through affiliates. Obviously they saturated that market already but having every affiliate gunning against you may not be the smartest business decision. That's a lot of potential negative webpages on the web.

[Shizzmoney]

Here's the letter they sent:

http://www.onlinepokerreport.com/168...ogram-changes/

Dear —,

As we look towards the future, PokerStars wants to significantly grow the game of poker by introducing the game to new audiences and continue to acquire recreational players. Consequently, we are announcing plans to rebalance the PokerStars affiliate payment program.

Our existing agreement with you requires us to give 14 days’ notice of changes, but in this instance, we will give 30 days’ notice, so these changes will take effect from June 1, 2015.

From June 1, 2015, PokerStars will pay revenue shares to affiliates for only the first two years of activity on a player’s account. This will affect all referrals by affiliates, including retrospectively affecting those players referred prior to 1 June, 2015.

We believe that this change will ensure that the PokerStars affiliate program rewards affiliates who join PokerStars in introducing the game to new audiences, rather than the current program which disproportionately pays affiliates for rake generated by existing players.

Over the last few years, the global online poker industry has changed significantly, and we must change with it. Unfortunately, the realities of today’s marketplace means that fewer and fewer new player acquisitions are coming from affiliate marketing. As a result, we must rebalance the incentives to benefit affiliates who maintain and grow new player acquisition.

We recognise that this will have a significant impact on some affiliates. Consequently, PokerStars is launching a series of new and exciting efforts to drive significant growth in the poker economy. We believe that these efforts provide a great business opportunity for affiliates who choose to join us in growing the poker world.

We have three primary plans for growing poker:

1. Entering new markets;

2. Creating consumer demand and excitement through innovative marketing and promotions that can reach mainstream audiences;

3. Continue to innovate with new and exciting forms of poker that will appeal to wider demographics.

This means that PokerStars will invest more (in terms of both staff time and direct expenditure) in marketing the game of poker to new audiences. Affiliates have an opportunity to support these marketing efforts and benefit from PokerStars’ new investments in growing poker.

[Dan Druff]

Good for them.

Not only are they doing the right thing, but if I were Amaya, I would take it even one step further, and either eliminate affiliates completely or fully change how they are compensated.

A bit of history of online poker, for those of you who might not be familiar:

When online poker started, it was a very small industry with virtually zero marketing or advertising budget. This was pre-2003, so there was no Chris Moneymaker win and no WPT holecard cam. Poker wasn't thriving, and these sites were having trouble attracting new customers.

In 2001, Party Poker decided to go the affiliate route in order to drum up new business. They offered a large piece of the potential new customer's rake in exchange for directing him over to Party. This actually worked great, and Party rapidly expanded. Affiliates were making BANK, as they were keeping these 30%-of-rake payments and not sharing any with the customer!

Then there became too many affiliates, so competition ensued. Rakeback was born. Affiliates were now sharing a larger and larger portion of their rake commission with the customer himself.

Eventually all major poker rooms entered rakeback deals with these affiliates. Some were "CPA" (one-time payments for referred depositing players) arrangements, and others were revenue share (piece of the referred customer's rake for life.)

So here we are today in 2015.

This model is beyond antiquated.

Why?

Times have changed greatly in online poker since 2001. In fact, this model was antiquated ten years ago, but nobody did anything about it because all of the sites were making huge money in 2005, and it's hard to see your leaks when you are doing well. (How often do you review your poker strategies for flaws when you're on a winning streak?)

Pokerstars is the biggest site in the world. It has been the biggest site in the world for well over 10 years. Everyone knows Pokerstars. They do not need affiliates to drive traffic to them. They also now have a huge marketing budget (and have for a long time), and no longer need affiliates to get traffic.

Even worse, affiliates are mostly driving people to Pokerstars who are googling for "bonus codes" AFTER they already found Stars and are in the process of signing up.

This is the type of thing people are googling for, when in the middle of signing up to Pokerstars:



So these leech affiliates aren't even getting new traffic for Pokerstars. They are just giving bonus codes to people who saw "Marketing code" while already signing up, and then googled to find one.

While I do believe affiliates are driving a few people who might just be googling "play online poker", keep in mind that the first 4 results of doing so today are: Full Tilt (owned by Stars), some play money site, Bovada, and Pokerstars. So, again, they don't really need affiliates.

Instead of killing all affiliate deals, Amaya is simply reducing the amount of time that affiliates can earn revenue share on customers they refer. Two years is plenty, and in fact it's FAR more than the affiliates deserve. Lifetime was ridiculous. The affiliates were getting huge payments for grinders that almost surely would have found Stars anyway (and in fact probably already found it and just googled for a bonus code).

I have a feeling that this is the first of various gradual steps to drop or severely curtail the use of affiliates by Amaya.

If I were them, I would either drop the affiliates or drop this "bonus code" nonsense, and not have a space for any kind of code which can be googled in the middle of signup. This way, any customers coming from affiliates are at least ones you KNOW found Stars through the affiliate, rather than just using them for the code.