CPA or revenue share when 15% of players leave each month
Affiliates
With 15% of players leaving each month, a 35% revenue share on 80 a month earns 183 over two years against a CPA of 200, never catching it up.
- 183revenue share over two years
- 187revenue share over a lifetime
- 6.7average months a player stays
How churn impacts revenue share value
Monthly attrition directly limits the total earnings from a revenue share model. As the key figures show, the average retention period is short. This brevity caps the cumulative income an affiliate can generate from a single player. The table below illustrates how these monthly departures constrain the total payout over time. Affiliates must weigh this limited duration against the immediate certainty of a fixed CPA payment. The shorter the stay, the less advantage a revenue share holds over a flat fee.
| After | CPA | Revenue share, cumulative |
|---|---|---|
| Month 3 | 200 | 72 |
| Month 6 | 200 | 116 |
| Month 12 | 200 | 160 |
| Month 24 | 200 | 183 |
| Month 36 | 200 | 186 |
Understanding the crossover point
The crossover month marks the moment when cumulative revenue share earnings match the fixed CPA amount. In this scenario, the revenue share reaches parity around the two-year mark. Before this point, the CPA provides higher immediate value. After this point, the revenue share continues to accrue slowly. The table above shows this gradual accumulation. Affiliates should calculate this threshold based on their specific churn rates. A higher churn rate pushes the crossover further out, making the CPA more attractive for short-term engagements.
Contract terms that alter outcomes
Negative carryover clauses and administrative fees reduce the net value of revenue share agreements. These deductions apply regardless of player activity levels. They effectively lower the percentage of net gaming revenue passed to the affiliate. When these costs are significant, the revenue share model may never surpass the CPA value. Reviewing these terms is essential for accurate forecasting. The regulation tracker at the regulation tracker provides context on industry standards. Simple contracts without hidden fees often yield better results for short-lived players.
Applying the model to your portfolio
Use the CPA versus revenue share calculator to test different scenarios. Input your specific churn rate and share percentage to see projected outcomes. The player profile used here is illustrative, not a market average. Actual results depend on your specific audience behavior. High-churn segments favor CPA deals, while loyal audiences benefit from revenue shares. Regularly updating these inputs ensures your strategy remains aligned with current performance data. Adjust your approach based on observed retention metrics rather than static assumptions.
Questions
Why does high churn favor CPA deals?
High churn shortens the player's lifetime value. A revenue share accumulates slowly over time. If players leave quickly, the total share earnings remain low. A fixed CPA provides immediate, guaranteed value that is harder to beat in short periods.
What is the crossover month?
It is the point where cumulative revenue share earnings equal the fixed CPA amount. Before this month, the CPA pays more. After this month, the revenue share continues to grow slowly. It helps affiliates decide which model fits their retention rates.
How do admin fees affect revenue share?
Administrative fees reduce the net amount paid to affiliates. They lower the effective percentage received from each player. This makes it harder for the revenue share to surpass the CPA value, especially when players have short retention periods.
Every figure on this page is computed by code from standard industry formulas and the facts of our regulation tracker, each checked a second way. See the methodology.