OnlyFans Revenue Points to Pandemic Growth Sustainability

Audiences want Entertainment, not necessarily reading

Hey Guys,

A lot of pandemic beneficiaries including Web3, FinTech and Creator Economy platforms have had a hard time sustaining their momentum that they saw in 2020 and part of 2021, not so with OnlyFans.

Launched in 2016 OnlyFans has grown tremendously. OnlyFans is an internet content subscription service based in London, United Kingdom. The service is used primarily by sex workers who produce pornography, but it also hosts the work of other content creators, such as physical fitness experts and musicians.

I want to talk about the business figures and numbers that have come out recently and point to a Paid Subs model that has been well received.

So what’s going on here?

• OnlyFans owner Leonid Radvinsky took dividends of $517 million in two years, Bloomberg reported.

• The adult content plaform's viewers jumped by 128% and the number of creators rose by a third.

• Revenues soared from $358m to $932m last year, according to the annual report seen by Bloomberg.

While TikTok is upending the music or book publishing world, another video based subscription platform is sharing a lot of revenue with actual Creators. And It’s OnlyFans.

TikTok’s relationship with music was always there. Zoi Lerma was working at a Los Angeles bagel shop in early 2020 when she first heard the song “Supalonely” by Benee. She liked it so much that she choreographed a dance to the tune and posted it on TikTok. Her video has since amassed more than 45 million views, turning her into a TikTok celebrity and helping to make Benee a global sensation.

OnlyFans, the adult content site best known for explicit content, reported revenue soared 160% to $932 million year-over-year, according to financial results for the year ending November 2021. Performers on the site earned nearly $4 billion in 2021. - The Information

It makes you wonder what TikTok and OnlyFans get right that so many other platforms get wrong? And in a word, it’s entertainment. It’s scratching an itch in a more sexy way. While Substack authors stoke some of the more toxic parts of Twitter controversy, the kids on TikTok or “worker” Creatives on OnlyFans are clearly performing - in a niche of their own that’s much more personal or visually orientated.

Our attention on mobile is getting lazy and thus the kinds of content we crave or can consume at scale are also getting more superficial and stimulating. Not all entertainment is brain food, if at all?

• OnlyFans posted pretax profits of $433 million in the year ended Nov. 30, seven times more than it earned in the previous year, it said in its annual report Thursday.

• That Creators on OnlyFans earned nearly $4 Billion is a testament to the content and the IRL demand.

How to Measure the Real Growth of a Platform

Here also we have real uptakes in Creators and audiences and a healthy ratio between the two. Guys, this is super important for a legit platform. The number of creators on the platform increased 34% last year, to 2.16 million, while the number of OnlyFans users jumped 128% to 188 million.

That OnlyFans was able to provide this kind of data is really encouraging. This is scalability and actual product-market fit. A lot of platforms pretend they have achieved product-market fit when as we know this isn’t actually the case. When some of my favorite writers are saying “goodbye letters” on Medium, you sort of know platforms have a lifecycle of their own. For how long will the vibe remain legit?

TikTok and OnlyFans both have “edgy” content, namely a bit on the vulgar side depending upon your tastes. Founded in 2016, the London-based company offers a portal for people to sell subscriptions for content directly to their followers, from which it takes a 20% cut. Although OnlyFans hosts a wide range of content, it’s best known for pornography, a category it said it would drop last year before reversing the decision a week later.

Gan, who previously was OnlyFans’ chief marketing officer, took on the CEO role after founder Tim Stokely resigned (Variety) in December 2021.

OnlyFans said (to Bloomberg) its priorities this year include cyber-security, content moderation, government relations, and promoting its new video streaming service OFTV.

So let’s do some napkin math here. The adult entertainment site enjoyed a boom in its user base last year, with two million content creators raking in almost $4bn in 2021, per the report. This means the average creator made $2,000, which I’d like to say is a lot more than some other platforms.

Here we have a sex-sells baseline with a pandemic boost, but also apparent sustainability. Pre-tax profits also soared from $61m in 2020 to $433m in 2021 as users flocked to the platform during the pandemic. But what’s going on to the mental health of America, when they have to spend nearly $5 billion on OnlyFans content?

The Ukrainian-American founder doesn’t seem to mind. The highly profitable startup essentially paid out more than $500m to reclusive owner Leonid Radvinsky in last two years. We we found out with Web3 hype and NFTs, what happens in Florida, doesn’t really stay in Florida!

$5 Billion is Still a Sexy Number for Gross Revenue

Let’s keep in mind what OnlyFans is becoming, that is, way more than soft pornography. It also features non-adult content from celebrities such as rapper Cardi B and DJ Khalid for paying fans and I’m sure with this momentum can drive a lot of new creativity and commercial value. I noticed that Subtext, the Substack for SMS also take about 20%. A lot of these sexy numbers still come from the pandemic boom’s impact though, and don’t represent the less than stellar 2022 and 2023 environments.

But numbers are still sexy and kind of matter to your platform’s reputation. Real numbers of Creators and audiences count. Gross revenue (i.e., fan payments net of taxes) also more than doubled, to $4.8 billion, for the year ended November 2021.

For a six year old startup, OnlyFans is contributing second most to Creators likely only after YouTube. In America, many women don’t even own their own bodies with regards to abortion and reproductive health accessibility, but at least on OnlyFans people can find a way to make the ownership economy work for them.

So what are TikTok and OnlyFans telling us about the future of the creator economy? Even bad video content is better than reading. We crave connection beyond words, we still seek a thrill. Maybe I’ll have to check out OnlyFans with new eyes.

Anything is better than a dumb TikTok meme. I guess people are just that lonely.

Thanks for reading!