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How OnlyFans made the most out of pandemic porn

1 September 2021 7:15 PM
Tags:
Digital technology
BusinessUnusual

Only to peak too soon

OnlyFans can be described as a relatively new service made up of existing older services to satisfy the oldest service.

It is a platform for content creators that has photos like Instagram, videos like YouTube, and posting and messaging like Facebook and Twitter. It charges a subscription like Patreon. Creators and fans can supply a wide variety of content across many subjects, but for the most part the content is adult related. Most of the creators are women, most of the fans are men and since the start of the pandemic it has allowed many adult industry workers to maintain or increase their income.

It had grown to two million creators, had 130 million users and revenues of over $5 billion. Not bad for a company that was only started in 2016 and effectively has just 4 shareholders.

Fans are happy, creators are happy, owners are happy - what could go wrong?

Some banks were not happy.

No to porn

Some of the elements of the story are still not clear, but in mid August the platform that made a name for itself and its mostly female adult content creators announced that as a result of payment partners issues, they would no longer accept or allow accounts that post explicit nudity after the 1st of October.

If there ever was an effective way to snap the horn off a unicorn this was it. It was going to kill the goose that laid golden eggs.

A popular mixed use blog site called Tumblr had tried the same thing a few years ago, and it did not go well.

Creators were shocked, it was ultimately their content and the promotion of it that allowed the platform to grow and now thanks to some banks they were being kicked off.

The response was loud and swift, the similar but less well known sites that offered the same services shared a big jump in new accounts and while creators did not abandon the platform, the owners had to think again about their plan to ensure payments could be made, but there would be few willing to make them.

What is not clear is exactly why pressure from some banks would cause this. There are multiple payment processing options that have been used by the porn industry since the web was first created. Much of the early demand for online banking was from those wanting to buy porn.

Some suggest that as the accounts typically use recurring monthly payments for the subscriptions that the volume of requests for reversal of charges was a problem. Banks are set up to initiate payments, they are not keen to have to cancel them and certainly don’t want to be drawn into disputes about whether the payments were legit.

When you have over 100 million users you can imagine that despite it being an over 18 only site, the odds of those under 18 getting access and using someone else's card details was also an issue.

Similarly with two million creators, many young women, the site's ability to ensure all were old enough to operate it would require a lot more due diligence than a relatively new company could supply.

Those risks would carry over to financial companies who facilitate transactions that may well be illegal. For a relatively small company many banks may see the risk as simply not worth it.

Can porn scale?

Any small web based business wishes to grow rapidly, get venture capital investments and when it makes sense list.

The boost to its growth and revenue came as the lockdown hit. It would have affected everyone in the adult film industry and everyone in associated industries like adult bars, escort services and many other entertainment related industries. For those that were looking to find a job, that work dried up quickly.

At the same time, the planet was also forced to stay at home. If you were single or unhappy with your relationship or just bored, you may have visited OnlyFans to see what the fuss was about.

Rather than the typical mass platform approaches like Instagram and YouTube where the occasional acknowledgement via the comments from the creator would be great. Creators on OnlyFans were encouraged to connect and message their fans directly which could include getting additional payments for content just for them or agreeing to have a conversation.

You also got paid by your fans (between $5 and $50 a month) so rather than needing tens of thousands or millions of followers to earn a decent income from ads or endorsements, with this you could do fine with just a thousand fans.

How did it start?

The founder is thirty-something from the UK who had run a website for models to create personalised clips for fans. In November 2016 he created OnlyFans with his dad and brother using the fan model but rather than once off clips it would be a recurring subscription.

It was not a new service as Patreon had been around for three years already doing the same thing, but Patreon connected the payment to creators on other platforms, while OnlyFans hosted the content on their sites. Patreon does not expressly ban adult content but does not typically approve porn accounts.

OnlyFans charged 20% of all transactions which they reported as $5 billion.

Looking for new investors may have been difficult as there were already services like Patreon and because they had some adult content, many VC companies may have preferred to look elsewhere, but in 2018 they did find an investor that bought a 75% stake of the company.

Leonid Radvinsky, has run other adult content sites and appears to have guided OnlyFans to become more adult content orientated. Forbes did a piece on him which may explain why some banks and investors would be hesitant to get involved.

As an adult site, it can’t create apps for the Apple or Google stores. It was in talks to build a TV streaming option for smart TV’s which if adult based may also create problems.

A move away from porn

The site has some very high profile personalities that are not porn related. Athletes and musicians use it and it is likely the opportunity it offered musical performers in early 2020 that influenced Beyoncé and Megan Thee Stallion to include a reference to starting an OnlyFans account.

The most successful person to date is a controversial rapper called Bad Bhabie which joined in April this year and earned over $1 million in just 6 hours, she had turned 18 just the week before.

Being able to have a section that would exclude adult content might allow it to create the apps to appear everywhere but the creator community that is subscription supported is still new and so may not get the traction and scale needed when competing with sites like Patreon.

The change of heart

Given the feedback about the change, OnlyFans must have realised that they could not make the shift away from adult content and reversed the decision on the 25th of August.

They committed to addressing the issue with payment partners and doing more for creators especially those that felt betrayed by their decision.

Might its popularity allow the porn industry to become a little more mainstream or will it entice those in need of cash to do something for short term gain that has long term implications for anything else they may want to do?

Already there are coaches for new OnlyFans to show them the ropes. Might these businesses become the new exploitation businesses OnlyFans wanted to disrupt?

Will regulators, lawmakers and banks be happy to accept a new social media based niche given the issues that have been raised with the likes of Facebook, Twitter and YouTube?

Only time and the fans will tell if the decision was a good one.


This article first appeared on 702 : How OnlyFans made the most out of pandemic porn




1 September 2021 7:15 PM
Tags:
Digital technology
BusinessUnusual

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