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How Only Fans Was Able To Pay Creators $3 Billion Dollars
The internet has changed the way we live our lives.
The internet has changed the way we live our lives.
You can find almost anything online, including a significant amount of adult content.
Pornography websites have hundreds of millions of visitors every day and saw a significant increase in traffic during the peak of the pandemic.
However, another website offering gated pornographic content in a similar subscription model to Patreon also saw a significant increase in traffic.
Today, I will talk about OnlyFans, the concept for gated content, it’s incredible growth strategy and its fascinating founder, Tim Stokely.
In 2011, Stokely spent his time partying around the world and burning through his family’s money on “business ideas.” Glamworship was one of those ideas.
The Glamworship website stood out by focusing exclusively on “financial domination,” a sexual fetish in which a “submissive” gives gifts and money to a financial “dominant.”
The idea came to Stokely when he stumbled upon subreddits about financial domination. He saw how much money people spent on these experiences, yet no one created exclusive content for them.
Funded by tens of thousands of dollars from his family, he then decided to develop Glamworship.
Glamworship viewers offered some big money in exchange for playing out their wildest financial fantasies. The performers quickly took advantage of this opportunity, and a Cameo-for-financial-dominance economy began to blossom.
Unfortunately, a newly born mini-economy that leveraged Twitter and Venmo took place. Users would view content on Glamworship, reach out to the performers on Twitter, request a video, pay the performers via Venmo/Paypal, and then receive the video. This effectively allowed the users to bypass the fees that resulted in profits for Glamworship.
This strategy didn’t sit well with Stokely, so he closed Glamworship and started a new company in a continued attempt to create a business offering of exclusive content.
Instead of users independently finding performers on Twitter, contacting them, and arranging payments in an unreliable industry, Customs4u handled all the work.
However, many performers were not happy about this because it lowered the barrier to entry into the industry, saturating the market with new performers and making the niche more competitive. As a result, Stokely was never able to develop Customs4u at the scale he had envisioned.
Stokely then took a break, moving from the porn business into the trades and services business; he founded 121with as his next company. Here, the concept was for tradespeople to sell their expertise via an audio or video call.
121with and Customs4u both leveraged creator-fan relationships to run their businesses. Unfortunately, like the previous venture, 121with failed. Nevertheless, it presented a good business model, just not in the right industry.
The Beginning Of OnlyFans
Stokely then reentered the adult entertainment market a year later.
As Instagram grew in popularity, many adult entertainers used it to post videos and pictures to promote themselves. However, the dominant social media platforms banned pornographic content and often banned users for even borderline content.
This gave Stokely the idea of building a paid social feed like Instagram or Twitter, where creators can earn money directly from their content.
In 2016, he launched OnlyFans. Here, viewers would pay subscription fees ranging from $5 to $50 a month to access content created by performers. OnlyFans received 20% of the subscription while creators received the rest.
The experiences Stokely gathered from his previous business ventures contributed to the success of his new company. Through Glamworship, for example, the company gained insight into the concept of paying performers directly for special video requests. Meanwhile, the initial OnlyFans customers came from Customs4u, and its business model evolved from 121with.
The early days of OnlyFans then revolved around enabling creators to upload custom content. By tailoring their content to audience preferences, creators built closer relationships with their followers.
An Effective Referral Strategy
Tim and the OnlyFans team didn’t want just anyone on board. They wanted people who could contribute to their success.
Therefore, OnlyFans created an incentive structure aligned with the platform’s goals to encourage users to recruit the right people. Its key objective was to facilitate referrals with “quality over quantity” in mind.
The OnlyFans referral program rewarded its members with a 5% lifelong revenue share.
If you recruit someone, for example, who makes $100,000 per year on OnlyFans and keeps them on the platform for five years, the company will pay you $25,000.
It is this incentive structure that has led to creators utilizing the referral program as well as encouraging others to join the platform.
Making Use Of Twitter
Fanscope was the first product OnlyFans developed to help creators leverage their Twitter following. It was released just three months after OnlyFans launched and finished setting up its payment infrastructure.
Fanscope could be described as a live version of Cameo. Creators can start a Fanscope session through OnlyFans and have the link automatically posted to their Twitter accounts. The live session then receives exposure from their entire Twitter following.
To watch the live stream, Twitter followers must click the link and sign up to OnlyFans. This strategy brought more people to OnlyFans because it lowered entry barriers. New users could see what they can expect from an OnlyFans page without investing any money.
Steady & Predictable Growth
In contrast to other live platforms, OnlyFans saw adult performers as assets, so instead of prohibiting them, the company empowered them. As a result, they never restricted their content but instead, they encouraged the creation of unique content.
In 2018, Leo Radvinsky, a Ukrainian-American web entrepreneur who had built up a fortune with a site called MyFreeCams, was able to buy 75% of OnlyFans. After that, the company kept growing steadily.
OnlyFan’s success soared tremendously in 2020 when celebrities began to publicize it. Beyoncé name-dropping it in her song and Cardi B joining the platform are some of the events that accelerated its growth.
So far, OnlyFans has paid its creators more than $3B, and more than 120 million viewers have joined the site.
As of today, the vast majority of OnlyFans creators are adult entertainers. The company, however, has started to invest in rebranding it to appeal to a broader audience.
This year, they established a creator fund of £20,000 ($27,800) to help four aspiring musicians kick start their careers.
Whether they will pull off their attempt to join the mainstream market is a topic we’ll have for another day.
4 Lessons From OnlyFans
Tim Stokely had multiple failures before the OnlyFans success. Most ‘overnight successess’, take years.
If something is not favored by the larger market, there’s an opportunity for business. Tim focused on a marginalized market segment that was kicked off of other social platforms, and gave them a platform and community.
Get your customers to sell for you. OnlyFans launched a highly lucrative referral strategy which brought people to their platform.
If you don’t give up, the timing will eventually be right. Tim launched multiple businesses, any of those could have coincided with a global pandemic event, but they didn’t and failed for a variety of reasons. However, if you think that you’re not lucky or the timing isn’t right for whatever it is, you’re trying to build… keep going, because eventually, if you put time into something and you put in the effort, the timing will eventually be right, and the luck will eventually find you.