The OnlyFans Business Model – How Does OnlyFans Make Money?

Executive Summary:

OnlyFans is a platform that allows content creators to produce and sell exclusive content in the form of photos, texts, or videos.

OnlyFans makes money by taking a cut from subscriptions or tips as well as by selling merchandise through its e-commerce store. It largely operates on a subscription business model.

Launched in 2016, OnlyFans has grown to become one of the world’s most prominent creator-based platforms. Over 120 million people are now registered on the platform.

What Is OnlyFans?

OnlyFans is a social media platform on which members can either sell or buy user-generated content.

The content itself is largely photo- or video-based (yet customers can also just text with creators). More often than not, those photos or videos contain pornographic material.

In order to access the content, users need to pay a monthly subscription fee that ranges from $5.00 to $50.

Users need to be 18 or older and have a government-issued ID in order to sign up on OnlyFans. The platform also helps make sure the content stays shared within the app.

For example, if you take a screenshot on the site, you’ll be met with content that is blacked out. If you’re found taking screenshots or recording other users’ information on the site, your account may even be banned.

Once registered and logged in, users can browse and select thousands of creators they would want to subscribe to.

Apart from its social media platform, users can also purchase designated OnlyFans merchandise (such as clothes or accessories) within its e-commerce store.

The OnlyFans platform can either be accessed by visiting the company’s website or by downloading its mobile applications (available on Android and iOS devices).

How OnlyFans Started

OnlyFans, a subsidiary of Fenix International and headquartered in London, United Kingdom, was launched in 2016 by Tim Stokely.

However, OnlyFans was not the first business endeavor that Stokely underwent. In fact, it wasn’t even his first experience running sites focused on adult content.

In 2011, Stokely the 28-year-old Stokely was traveling around the world and splurging on his family’s money (his father, Guy, has made his money as an investment banker at Barclays).

Around that time, he discovered the concept of “financial domination”, a sexual fetish in which a “submissive” (normally males) provides gifts to a financial “dominant” (usually females) when browsing Reddit.

What he discovered was that a) people spent a significant amount of cash to live out this fantasy and that b) there wasn’t any dedicated site fulfilling those needs.

As a result, he launched Glamworship, a site focused on that particular fetish, in January 2011. The business itself was funded by his family who provided Stokely with tens of thousands of dollars to get it off the ground.

Unfortunately, the business never took off. Customers would reach out directly to content creators on Twitter and pay them for material via Venmo. Users would effectively bypass the fees that Glamorship collected.

He eventually pivoted and launched a new business named Customs4U. The new project was revealed during AVN Adult Entertainment Expo in January 2014. Customs4U was a fairly similar concept to OnlyFans and allowed customers to order exclusive content from adult movie actors.

Yet again, the business never took off. The main reason for its failure was that the content creators feared that it would lower the barrier of entry to the porn industry. Many of them, therefore, decided against joining Customs4U, which led to a lack of content being available.

After Customs4U was shut down, Stokely moved away from the porn industry and launched 121with, an online marketplace allowing tradespeople (such as carpenters or plumbers) to offer their services online by means of audio and video calls.

Unfortunately, the third time’s not always a charm, and he had to shut down 121with as well. Nevertheless, these experiences taught him some valuable lessons, in particular how creator-fan relationships truly work.

Equipped with those life lessons, Stokely launched OnlyFans in the summer of 2016. His basic premise was that influencers were already posting visual content to Instagram for free, but many of them struggled to monetize that content. OnlyFans would offer a way out.           

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Wayback Machine

In the beginning, OnlyFans existed without much public attention. Three key initiatives, however, helped the company to significantly expand its reach. The first one was a feature that allowed creators custom content for users.

Second, OnlyFans created a very attractive referral program that incentivized existing users to bring on new creators. Essentially, referrers would be rewarded with a 5 percent lifetime revenue share.  

Third and last, they released a product called Fanscope, which allowed creators to initiate live sessions by posting a link to their Twitter following (the actual stream would take place on OnlyFans).

If users wanted to see the live stream, they had to sign up to the platform. Consequently, thousands of Twitter users also joined the OnlyFans platform.  

While OnlyFans largely grew without much public attention, some people did begin to take a closer look. One of those spectators was Florida-based internet entrepreneur Leonid Radvinsky. In October 2018, he acquired a 75 percent stake in Fenix International, OnlyFans’ parent company.

Radvinsky himself can be considered a veteran of the porn industry. In the late 1990s and early 2000s, he ran about a dozen websites, for instance, MyFreeCams, a porn-via-webcam service. Furthermore, he was also no stranger to legal battles.

In 2003 and 2004, Amazon and Microsoft sued Radvinsky over alleged spam campaigns. These campaigns used Microsoft’s email tools or Amazon’s branding to direct customers to adult and other spammy websites from which he would then be compensated by means of display ads and affiliate revenue. Both lawsuits were settled out of court in 2005 and prohibited Radvinsky from ever using the tech giants’ names again.

Radvinsky, furthermore, became a director at Fenix International next to Tim Stokely, his father Guy, as well as brother Tom.

Slowly but surely, OnlyFans continued its ascend. By 2019, more and more news outlets began reporting about the platform. Most of the coverage was centered around how creators were quitting their jobs and, in some cases, raking in millions of dollars a year. At that time, OnlyFans counted over 7 million users that were served by 60,000 content creators.

2020, however, put the platform on the worldwide map. Layoffs as a result of the coronavirus pandemic forced many people to rethink the ways they generate income – with some of them eventually deciding to give OnlyFans a try.

Second, meeting people became almost impossible. People, therefore, joined OnlyFans as a substitute for human interaction and to experience some level of intimacy.

By the end of 2020, OnlyFans had grown to more than 85 million users and 1 million creators. Even major celebrities, such as Cardi B, were beginning to embrace the platform. Unfortunately, the heightened awareness also came with its own set of problems.

In February 2020, 1.6TB worth of photos and videos were leaked without the OnlyFans’ or creator’s consent. Subsequent reporting by Motherboard revealed that people had created scrapers that were able to circumvent the platform’s safeguards, thereby retrieving gigabytes of material every day.

Then, in September, former Disney actress Bella Thorne was embroiled in a controversy over selling $200 nude pictures in which she actually wasn’t naked. As a result, OnlyFans capped its tips at $100 per item, a change that angered many of its creators who were reliant on bigger tips (as they did not possess large amounts of followers).

Nevertheless, growth continued well into 2021 – even after many countries lifted their lockdown restrictions. OnlyFans had slowly begun to focus its efforts away from adult content towards becoming a more mainstream platform.

For instance, in March 2021 it launched a £20,000 grant that would be given to four music artists or bands who were creating content on the platform (a growth tactic that has been adopted by the likes of Clubhouse and TikTok, amongst others).

The move to becoming a mainstream platform took full swing in August 2021. OnlyFans announced that from October onwards all adult content on its platform would be banned.

The move was meant to legitimize the company in the eyes of venture investors and allow them to attract outside capital. However, just days later, the firm’s leadership already renounced their plans, which would allow adult content creators to continue monetizing on the platform.

Today, over 120 million users are registered on OnlyFans. Over 200 people are employed by the company.

How Does OnlyFans Make Money?

OnlyFans makes money by taking a cut from subscriptions or tips as well as by selling merchandise through its e-commerce store.

OnlyFans is largely built on a subscription-based business model. Customers pay a monthly fee in order to access exclusive content by its creators.

Let’s take a closer look at each of its revenue streams in the section below.

Commission

The overwhelming majority of the revenue that OnlyFans generates comes from the commission that it takes whenever a creator is paid.

Content creators can make money in various ways, including:

  • Monthly subscriptions that grant users access to their profiles
  • Getting paid for individual content items, such as pictures or videos
  • Asking for tips

OnlyFans, as the operator of the platform, then takes a 20 percent cut from all the income a creator generates. Creators get to keep the remaining 80 percent.

The cut that OnlyFans takes is roughly in line with what other platforms charge. Patreon, for instance, takes anywhere between 5 to 12 percent from its creators.

E-Commerce Sales

Apart from commissions, the platform also generates some revenue by selling various OnlyFans-branded merchandise via its online store.

There are three distinct product categories, namely clothing (such as t-shirts or hoodies), accessories, as well as home and living (including pillows, towels, or laptop stickers).

Products are shipped worldwide. Furthermore, packages are provided with the OFMerch tag in order to avoid any scrutiny.

Who Owns OnlyFans?

OnlyFans, a subsidiary of Fenix International Limited, is majority-owned by Florida-based online entrepreneur Leonid Radvinsky.

In October 2018, he purchased a 75 percent stake from Tim Stokely and his family (primarily his father Guy and brother Tom) for an undisclosed amount. The remaining 25 percent, therefore, remain in the hands of the Stokely family.

OnlyFans leadership team is allegedly seeking to raise an additional round of funding that would value the company above $1 billion. To be able to do that, the company had previously increased its share count from just a hundred to one million.  

Hi folks, my name is Viktor! By day, I lead a tech team of 10 for an e-commerce startup. At night, I work on expressing my weird thoughts through this blog. And if there's time, I cuddle my cat..