Wouldn't it be a lot easier to call up match/cupid/eharmony and discuss referral fees for driving traffic to these sites? I think he'd be better off looking for a partner. Perhaps an exclusive deal?

What value is adding a pay site to an over saturated market bringing here? Why would you play against companies that are more resourceful and experienced using their rules? Seems to me that - long term - this is a lose/lose all around for him.

In order for this to be even remotely successful, he needs to beat the pay sites at their own game. Otherwise, his "pay site" will still be disregarded, and he'll still "lose revenue" to the big guys. The odds are stacked against him. The big guys can bear a price war much better than he can, and that's what he's jumping into, essentially.

Maybe he's tried referrals and sites like Match.com, which launched a free version, turned him down or paid too little because they want to take over the vertical too.

That's certainly possible. There are a lot of competitors out there though, and now that one has a free site too, there should be plenty of interest.

Perhaps the true nature of this post is an effort to bring some of those other players out of the woodwork.

What's better?

A one time referral fee OR customers that continue to pay for your service month after month, year after year.

He doesn't want to be an affiliate, he wants control of it all.

I'm not seeing how a referral deal would be a "one time fee" at all. In my mind, it would be recurring based on the number of click throughs or sign-ups or whatever.

He doesn't want to be an affiliate, he wants control of it all.

And my point is that this is where greed can sometimes bite you in the ass.

It would be recurring assuming he gets a certain amount of signups each month. But in month 2, he no longer gets that money from the customers - that goes straight to the other company.

He may get a one-off payout of $100 or so per signup, but if he had his own service he would continue to make money from the original signups while gaining new ones each month.

Recurring payments > One-time payment.

a good traffic deal pays based on the turnover generated at the destination site, I'd definitely pass on a 'one time fee' per signup, unless it is very substantial.

I think when he says "by sending people to competitors sites." he's suggesting that he already gets referral fees (why else would he send them?). I think watching the referral fees roll in makes him think - "these people are willing to pay x to get my customers, therefore they must be making y >> x." He may be wrong.