If you count yourself an OnlyFans fan, then this news might hit you hard. Apparently, the online streaming company that has used its platform to deliver a subscription-based user experience from video providers to video watchers is making a shift in its core content guidelines. And for this company, in particular, it is a big one. According to Input Magazine, and confirmed through other sources, OnlyFans will be banning pornography from its platform effective this fall. It is likely to have some huge economic ramifications considering this apparently was a massive percentage of their overall content.
OnlyFans issued a statement concerning this new policy on their site, saying that it stemmed from a number of different factors, but specifically around their ability to raise new funds from investors. In the vein of “money talks” it appears that the prospect of not being able to seed new funding outweighed the money coming in from content creators who were using the site to stream pornography to their fans. Here is part of the statement from OnlyFans regarding this new decision:
Effective 1 October, 2021, OnlyFans will prohibit the posting of any content containing sexually-explicit conduct. In order to ensure the long-term sustainability of the platform, and to continue to host an inclusive community of creators and fans, we must evolve our content guidelines. Creators will continue to be allowed to post content containing nudity as long as it is consistent with our Acceptable Use Policy. These changes are to comply with the requests of our banking partners and payout providers.
As Axios points out in another related piece around the struggle for OnlyFans to raise money in this environment, for a typical company of this size with similar cash on hand and revenue growth, raising investor money would be about the easiest thing in the world. The numbers are staggering. In 2022, OnlyFans is projecting to do $12.5 billion in gross merchandise value, $2.5 billion in net revenue, and $1.2 billion in free cash flow. This should be an easy sell. But the prevalence of pornography on the platform has investors either skittish or outright unable to invest because of their own internal policies around which companies they can invest in.
Among the many “problems” OnlyFans has on the platform is that sexually explicit content (which will now be banned) presumably makes up an outsized portion of their overall revenue share. While those numbers aren’t exactly clear or forward-facing, it doesn’t take more than back-of-the-napkin accounting to see that this new policy will have major ramifications on the site. In fact, there is some chance this has a chicken-or-the-egg type of problem to solve. Because there is almost no doubt that the sexually explicit content is what makes the overall revenue growth and branding so “attractive” that when it is gone, soliciting outside investment might be a problem, but from another avenue. OnlyFans could end up just taking a major financial hit instead.
OnlyFans is a subscription-based service that allows creators to provide content to users (subscribers) for a recurring monthly fee. Often, this content is sexually explicit in nature and a number of creators have made millions off of what they post to their fans. The company was started back in 2016 by Tim and Thomas Stokely, but in 2018 Leonid Radvinsky, an online pornography mogul, acquired 75% of the company. This latest round of investment is, in part, to cash out that majority hold on the company. But, of course, the snag has come from legacy investors being precluded from putting money in because of either company or regulatory policies around the content, or just worrying about the public relations aspect of investing in this type of company. And there were concerns about minors being exposed to the content as well. It will be interesting to see where this lands with OnlyFans and whether the new policies have a serious effect on their financial prospects.