OnlyFans Uncovered: Valuation and Business Model Explained
Update - OnlyFans Bans Adult Content: Shortly after publishing this article, OnlyFans released the news that they will ban adult material from the site. The ban will come into effect in October, welcoming an exciting pivot for this notorious platform.
OnlyFans has quickly become one of the most talked-about online destinations. This notorious subscription-based platform has gained massive popularity over the past year, and it could be fast on its way to achieving billion-dollar status.
The platform offers creators the prospect to make millions. It’s changed the face of adult entertainment, and it’s opened up a whole new world for content creators, influencers, and celebrities. From a relatively unheard-of platform in its 2016 launch, OnlyFans has quickly attracted millions of users.
In this article, we’ll take a look at the OnlyFans business model and background to better understand how the platform has become such a massive platform for content creators.
The Rise of OnlyFans
The fast rise in popularity of OnlyFans had a lot to do with people being stuck at home during the 2020 global lockdowns, looking for new ways to be entertained. During this time, streaming services like Netflix and Hulu saw a huge surge in popularity. In fact, Netflix doubled their signup numbers in the first quarter of 2020 compared to Q4 2019. OnlyFans also had a massive boom in popularity.
The site posted 2020 revenues of $400 million - a 540% increase from the previous year. OnlyFans saw a 75% month-on-month increase in signups in March and April 2020. This meant an average of 200,000 users signing up every day.
Today, with over 100 million registered users, and more than one million creators - OnlyFans has quickly become hugely popular and profitable. The platform grew from only 60 000 creators and 7 million registered users in 2019 to what it is today.
Was this massive growth surge only temporary from the pandemic, or will Onlyfans become the next billion-dollar media company?
Let’s find out!
How Only Fans Started
The story of OnlyFans goes back to 2016. Tim Stokely, owner, and founder of OnlyFans was a digital entrepreneur who had started similar projects in the past.
First, there was GlamGirls. GlamGirls specialized in “financial domination” where clients offered gifts or money to the site’s models. Gradually, users started giving suggestions of what they’d like to see and models started offering custom video requests through Twitter. This transition gave Stokely the idea for Customs4U. Customs4U had a similar subscription-based model to OnlyFans. The platform allowed models to own their video content and control their profits, but the idea never really took off.
Stokely’s next venture was 121with, a marketplace that allowed tradespeople like plumbers or real estate agents to sell their expertise online via an audio or video call. The experience Stokely gained from Customs4U and 121with gave him a greater insight into the creator-fan relationship. This is where the idea behind OnlyFans was born.
The Launch of OnlyFans
In 2016, OnlyFans was launched. OnlyFans was originally only launched as a platform where creators could share exclusive content with people who would be willing to subscribe and support the service.
This was a similar idea to platforms like Patreon, although a key difference is that OnlyFans offers the ability to subscribe to a free tier and receive free content. And secondly, Patreon prohibits adult-oriented content.
The idea for OnlyFans was to be a platform where adult content creators would have the opportunity to earn money and publish content that their fans wanted when sites like YouTube and Instagram wouldn’t allow them to post. This idea grabbed the attention of Leonid Radvinsky, a Chicago-based internet entrepreneur with a background in adult entertainment. He acquired 75% of OnlyFans in 2018.
The OnlyFans Business Model (And What Sets OnlyFans Apart)
Compared to other social media and adult entertainment sites, OnlyFans developed a unique content-sharing platform. The business model is quite simple: OnlyFans provides a platform where creators can publish exclusive content and lock it behind a paywall. For a set subscription price, users of the platform can access this content. OnlyFans creators make money based on their subscriptions, and their fans can access exclusive content.
To understand the subscription-based model a little better, here are the main aspects of how OnlyFans works:
The business model of OnlyFans is closer to that of Netflix and Hulu instead of other social media sites. This is because users need to pay a subscription price to access the content. Instead of paying for content on the whole platform though, OnlyFans offers the option to pay for certain creators only.
Two-Way Private Communication With Content Creators
Something that really gave OnlyFans an edge over other premium adult content websites, is the fact that subscribers can directly communicate with their favorite creators through private messages.
Fans can make special requests and pay an extra fee or tip for exclusive, personalized content. This is where the value of OnlyFans has really developed. There may be loads of adult entertainment platforms out there, but OnlyFans offers a unique level of exclusive intimacy and communication.
Content Creators Can Work On Their Own Terms
The reason that OnlyFans has managed to succeed where so many other online adult entertainment platforms have failed is that they give full power to their creators through their non-exploitative, commission-based model.
If you start an OnlyFans account, you can generate content on your own terms. Best of all, creators on the platform can make money out of it. Unlike other social media platforms, OnlyFans supports explicit content.
On top of this, creators who post exclusive content can charge a subscription price that they think is suitable. This allows content creators to get paid directly for posting content and setting their own price for it.
OnlyFans provides complete security to its creators by ensuring that the content can never be shared outside the platform. If any OnlyFans user tries to take a screenshot or record a video of the content, the user profile will be subjected to banning if caught. This is similar to Snapchat, which found success by ensuring content created in the app had limited reach outside of it.
Exclusive Live Content
In addition to posting uncensored pictures and videos, creators can host live streams similar to Instagram, where followers can watch a creator perform in real-time. This means fans get to see what their favorite celebrity’s real-life looks like. This is the kind of exclusivity that no other platform has managed to offer.
How OnlyFans Generates Revenue
Onlyfans generates revenue through a subscription service. Users pay a set subscription price to different content creators. OnlyFans get 20%, and the creators take 80% of the cut.
OnlyFans creators can choose their subscription price based on the limitations that the platform offers. OnlyFans sets minimum and maximum subscription rates themselves which range from $4.99 per month to $49.99 dollars per month.
To make more money, creators can also set up tips or paid private messages starting at a minimum of $5. This is how most of the platform’s top earners are able to rake in millions in earnings. Since its launch in 2016, the website has paid out over $2 billion to its creators. Their payout is received every 21 days and is a fairly simple process. This means OnlyFans has not only attracted viewers but its also given adult content creators a much-needed digital platform.
One of the appealing things about OnlyFans for creators is that you don’t have to keep generating content again and again. For example, you can share one ‘exclusive’ selfie with ten different subscribers and earn tips from each of them individually. Existing adult entertainment platforms don’t offer the option of delivering personalized content like this.
How Much Do OnlyFans Creators Earn?
Unlike most social media platforms, influencers and models don’t have to rely on sponsorships to make money. They can charge a subscription price that they want, and be in charge of their earnings.
The top UK OnlyFans creator, Dannii Harwood, made around $29,000 in one month and $52,000 in the next one. Hollywood actress Bella Thorne managed to make over a million dollars after just a day with her OnlyFans account.
Influencer Caroline Calloway, set up an OnlyFans page where she dresses in costume as literary characters for her fans and earns thousands every month. Other influencers like e-girl influencer Belle Delphine are able to charge fans a membership fee of $35 a month for access to adult content, which is yet another extremely popular category.
A model named Kaylen Ward has raised more than $1 million in donations to Australian charities following the wildfires, by charging fans $10 to see exclusive adult content.
Is OnlyFans Only Used for Adult Content?
OnlyFans has 7000 - 8000 new content creators joining each day. The majority of these creators produce adult content, so it’s safe to say that this is still the platform’s highest revenue generator.
However, due to the appealing business model for content creators, OnlyFans is evolving from just an adult entertainment platform. All kinds of people can share their work on their terms - while getting paid for it. This has lead OnlyFans to push for more mainstream influencers.
A lot of influencers and adult entertainers have been encouraged to monetize their fame. And because of this, OnlyFans has transformed into an online space where all kinds of celebrities and athletes - including names like Floyd Mayweather - can connect with fans.
These days, the business model of OnlyFans has shifted focus, and the platform features creators who are singers, painters, chefs, therapists, and nearly everything else you can think of.
OnlyFans Bans Adult Material
As a result of pressure applied by their payment processors, OnlyFans will be banning all adult content as of October 2021. The platform will now be aimed entirely at mainstream content, pivoting away from its original adult-focused model.
OnlyFans will now become a completely different type of creator/fan platform. We're excited to see the new direction that the site will take. This will be the true test of the platform's popularity, revealing if OnlyFans will be able to compete with other social media giants on a mainstream level.
Does this signal the end of OnlyFans, or is the platform only going to get bigger? Only time will tell.
OnlyFans Growth and Profits
Since 2020, OnlyFans has reported a 42% increase in new accounts, and there are now more than 1 million creator accounts with over 100 million users worldwide. The company reported $390 million in yearly revenue last year - and the number is only going up.
OnlyFans is reportedly in talks to raise new funding at a valuation of more than $1 billion which will help the site become more mainstream than before. This year, OnlyFans is expected to earn about $300 million in profits.
Regardless of whether or not you agree with the content published on the platform, the truth is that OnlyFans has been one of the very few businesses that have not only survived but thrived during a global pandemic - while allowing independent content creators to earn money through their work.
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