Here is Jimmy's full explanation that he posted to Charlotte's site today.
TLDR: Model doesn't understand basic business finance, what a shocker.
April 21st
The website will be closing May 10th, 2015.
The last updates are April 21st, April 28th and May 5th.
There will not be any additional webcam chats or videos from webcam chats.
The details are very basic: The partnership agreement between the company and the model was to evenly split profits each month, with my little company sending her share by direct deposit on the 10th of the next month. The start-up costs for the site totaled $3980.00 and had all been paid upfront.
The site opened March 17th. The end of that first sales / accounting month would have been March 31st. In that two week period the total site income was $1898.65 (gross income, not profit).
Just prior to April 10th I had advanced her $2000.00. On the 10th I did not send any additional funds because that $2000.00 is way above a 50% share of any March profit number. She expressed concern by text message that even with the advance money I had sent, without even more being sent on the 10th, she wasn't making enough.
I did my best to explain the economics behind the site by creating a long webpage with details, screen captures of sales reports, and more. I did it by webpage because TEXT is too silly for important business and can't show images large enough to read details (accounting numbers). Phone calls also can't show images such as those. I didn't get a reply - except a 1:23am text saying a reply would come soon. I waited another 36 hours but it became apparent to me that the distance between what the site would make in profit to be split, and what was expected / needed in monthly payments, wasn't going to happen any time in the first few months - if at all.
And, that would mean the money discussions, the late night text messages, and the misunderstandings would very likely continue ad infinitum. Thats something I'm not interested in at all.
With me expected to continue advancing more and more money against future profits, and me expected to invest again this coming week to fly her to town for new shoots, it became obvious the site wouldn't be able to produce the income required to meets her monthly needs, pay off the original investment, catch up on all the advance payments, and produce positive revenue for the business.
It would be an unsustanable business model, with the advance payments totaling 4.5 times what the profit share should have been, so best to get out of the mess now.
Its basic business math. The numbers just don't add up. If the production expenses, and what the model expects to be paid (advances against future profits and crrent profits), total two to three times as much monthly as the site itself produces in net income, its not a good investment. Its a money losing situation and best to cut off sooner rather than later to minimize the loses.
The entire process of solo model websites, how many are dying, how expensive they are to start, what many models have as instant expectations, is an interesting topic and I'll be writing more on it over the next week or two at my blog. I'll send email when thats done.
For now, please compare the closing date and last update date shown above with your current subscription and cancel your automatic rebilling on the best date that fits your needs.