Flirting is the Best Product of the Creative Economy
Maxim Shashkov
Transforming Games into Comics | Expanding IP, Boosting Fan Engagement, & Unlocking New Revenue
The story of OnlyFans creation, the first 1000 customers, the business model, dramatic twists, reasons for growth, and trends.
Key OnlyFans Statistics
In 2021, OnlyFans' revenue amounted to $4.8 billion [1 ]. At the same time, SubStack only made $100 million. Why is there such a big difference between the beautiful and the smart?
(Note: we're talking about GMV, not the company's net revenue)
How did it happen that the most successful project of the modern creative economy was not a project selling online courses, but a startup selling adult content?
The Creation Story: If You Struggle Long Enough, You'll Create OnlyFans
OnlyFans was founded in 2016 by Tim Stokely, a British entrepreneur. Prior to this, he had at least three projects of similar nature before he found a stable business model.
1. Glamworship (2011): Tim Stokely's first project was Glamworship. The concept was simple— one person offers money and gifts to another. The foundation of this was a fetish phenomenon known as "financial domination." (sometimes shortened to fin dom)
Tim borrowed startup capital from his father, who was an investment banker, and gathered videos from all corners of the internet to create the best website about financial domination—Glamworship.
The comments section on Glamworship turned into a mini-Ebay where viewers offered serious money in exchange for the fulfillment of their wildest fantasies about financial domination. Many performers seized the opportunity to gain a new source of income, and an entire economy began to form, a kind of "Cameo for financial domination." (Cameo is a popular project where celebrities send personal video messages to their fans for money.)
The main problem with this project was that money bypassed Tim's "cash register." Once people met through the site, they started transferring money directly to each other. Eventually, Tim shut down this project.
2. Customs4u (2013): Tim's next project. The idea was simple: it was a Cameo for adult entertainment (keep in mind, Cameo did not exist yet) with its own studio and white-label videos. But the project didn't take off, as creators/bloggers didn't want to advertise the platform, fearing competition.
3. 121with (2015): In 2015, Tim Stokely switched to another niche—infobusiness—and founded the project 121with. The idea was that experts, for example, chefs or real estate agents, could sell their knowledge and experience through audio or video calls. Essentially, the way experts sell their webinars now.
A common feature of 121with and Customs4u was that the entire business was built on understanding and monetizing the relationship between creators and fans.
4. OnlyFans (2016): The project only emerged in 2016, on the fourth attempt.
At this time, Instagram was growing at a wild pace, but it was deleting adult content. Tim then had a simple idea: why not create a paid social feed, similar to Instagram and Twitter, that would allow adult content creators to safely profit from their "creativity."
In 2016, Tim launched the MVP (first version) of OnlyFans with 10 adult artists. The business model was simple - fans had to pay a subscription fee (from $5 to $50 per month) to view the author's feed.
OnlyFans took 20% of this amount, with the rest going to the author. Essentially, he generalized his experience from all previous projects here: from Glamworship, he gleaned knowledge about the industry and the desire of customers to directly pay performers for special video requests; from Customs4u, he brought in the first clients; and from 121with, he borrowed the business model.
However, the first version didn't cause a stir. The number of users wasn't growing. It was unclear how to attract users. How do you get them to share that they are involved in "immoral and taboo things"?
How to attract users? An MLM-like referral program
That's when Tim remembered the MLM scheme[16 ]: (Multi-level marketing) if you bring someone who earns $100k a year to your platform, and that person brings someone else, then OnlyFans pays you 5% of the income of the person you brought in, and so on down the chain.
To make sharing the link not embarrassing, they made an explanatory and promotional video in which the company explained everything for you; you just shared the link and that's it (and so you didn't take the "sin on your soul").
The genius of this scheme is that it works on the quality of customers (only those who pay), not on quantity. Moreover, they implemented such features as an auction, themed days, and so on, which increased revenues and the level of involvement.
The next step was to introduce the Fanscope feature, essentially live broadcasts, which the author notified subscribers about on Twitter (now the X company). Twitter became the launchpad for further growth; authors simply flooded Twitter with adult content.
And finally, they started to bring in stars. Such names as Cardi B and Bella Thorne began to join the platform, ultimately creating the growth flywheel:
OnlyFans attracts adult actors with their own audience, gives them the ability to monetize this audience, which attracts other actors and subscribers.
How much and how do authors earn and who are the True Fans
An author earns on OnlyFans in three main ways:
OnlyFans takes a 20% commission (other platforms previously took about 40%)
The author's income varies greatly from month to month, with a typical author earning from $1k to $50k per month. [6 ] Some stars earn tens of millions of dollars per month!
OnlyFans Today
As of early 2023, there are 210 million users and 2.1 million creators on the service [2 ] (just like in the well-known law: 1% of people create content, 9% comment, like, discuss, 90% passively consume content)
Interestingly, the main paying clients are residents of the USA[1 ]. At the same time, the same law of super fans applies on OnlyFans (see the concept of 1000 True Fans [15 ]): 90% of the revenue comes from 1% of fans.
Therefore, there's no sense in chasing 1 million Instagram followers; it's much more profitable to have 1,000 super fans and individual relationships with them on OnlyFans.
Similar Business Models and Parasocial Relationships
The OnlyFans business model is not unique; similar schemes are used by:
However, only OnlyFans is showing staggering growth [13 ]. How can this be explained?
Parasocial Relationships
One explanation is the concept of "parasocial relationships"[18 ]. The essence of the phenomenon is that a person begins to perceive their idol as a close friend, for whom nothing is too much. On OnlyFans, due to its specificity and intimacy, these relationships reach a maximum in both emotions and monetization.
Additional interesting facts
1. In 2018 (before the major growth), Tim Stokley sold 75% to entrepreneur of American-Ukrainian origin, Leonid Radvinsky. Leonid now earns no less than half a billion dollars a year [1 ].
2. Notable growth occurred in early 2020 when the platform decided to expand its horizons beyond adult content creators. OnlyFans began attracting fitness trainers, chefs, musicians, and other authors. This was an attempt to diversify the user base and reduce dependence on the adult entertainment industry. This step was successful and led to a sharp increase in the number of platform users.
3. The 2020 pandemic was the best growth driver for OnlyFans. During this period, they grew at 70% per month! [5] They attracted their two target segments:
4. One of the significant missteps on OnlyFans' journey was the brief ban on sexual content in August 2021. This decision, taken under pressure from banking partners and payment providers, caused a sharp reaction from the community, forcing the platform to reverse it within a week.
OnlyFans, Virtual Characters, and the Future of the Creative Economy
It took the internet very little time to start using Stable Diffusion to generate "adult content"[19 ]. They crowdsource adult datasets and feed them to the neural network to generate higher quality images.
I often write that every entrepreneur should closely follow two categories: games and adult. The trends in these segments indicate what will come to "mainstream" business in a couple-three years. Here are a few more examples:
Despite the crisis, sales of adult goods on marketplaces have tripled over the year.
And of course deepfakes, virtual adult influencers, and conversation partners like replika.ai (whose main stable audience segment you can guess)
So beauty and adult content will save the world and the economy again.
Resources:
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7 个月Max, an amazing article! Great references!
Performance Marketing | Demand Generation | B2B ????????????????????????????????????????????????????????????????????????????????????????????????
1 年Consider my mind blown ??
Pioneering a New Scientific Future. Science infrastructure challenger to win her Glory back. Fighting misinformation.
1 年Thank you, very informative!