With OnyFans Possibly Ending Adult Content on it’s Site, What Does the Future Hold for it?
OnlyFans Commentary – OnlyFans Future : Last Updated: August 20, 2021 Reading Time: 15 Minutes
In a week where we saw the total collapse of the Afghan military trained for 20 years at a cost of $8 billion dollars by the U.S. Government, another slow collapse was also happening. That collapse was the confidence that millions of content creators have in the platform known as OnlyFans. I can’t stress to you how important the concept of confidence has to any successful organization. The same reason that a lack of confidence in victory can make a superior force surrender in the fog of war to an inferior force, a lack of confidence can destroy a once profitable company. In this article I am going to discuss the recent crisis of confidence brought about by an article on Thursday, August 19th stating that OnlyFans would no longer be allowing NSWF content on their site. This of course set off an absolute panic by the thousands if not hundreds of thousands of creators that rely on OnlyFans for some or all of their monthly income.
OnlyFans to Bar Sexually Explicit Videos Starting in October
BLOOMBERG _ 8/21/2021 – OnlyFans Is Banning Sexually Explicit Content. Now Creators Are Worried About Their Livelihood
NYTIMES – 8/20/2021- OnlyFans Says It Is Banning Sexually Explicit Content
BBC NEWS – 8/20/2021 – OnlyFans to ban sexually explicit content
What is OnlyFans Priority?
For those who were reading the articles this week about OnlyFans possible ban of adult content two concepts flowed through all of those articles, those being ‘Valuation” and “Banking Institutions”. For many creators who are concentrating on taking photos and videos and interacting with their fans these two concepts are way out of their daily concerns. So I am going to go over each of these concepts and how they tie into the future of OnlyFans.
OnlyFans Valuation Gamble
As soon as OnlyFans grew from making millions of dollars to hundreds of millions of dollars the owners of the company began to look for a way to get even wealthier. They were hoping that they could turn the company into a hot commodity, gaining venture capital and investment to take it public. Once they had an IPO they could cashout and live the rest of their lives on a palm island and never have to worry about creators or customers again. The problem there is that when you try to eat on a dirty table and try to convince everyone it’s clean, they can see the dirt pretty clearly anyway. So OnlyFans began taking all of their ‘Clean” assets and trying to shine them up to look like that was in fact the core of their business. You will notice that at no point since the site made it big did OnlyFans improve their website structure or promote their core NSFW content creators to a broader audience.
What Is Valuation?
Valuation is the analytical process of determining the current (or projected) worth of an asset or a company. There are many techniques used for doing a valuation. An analyst placing a value on a company looks at the business’s management, the composition of its capital structure, the prospect of future earnings, and the market value of its assets, among other metrics.“What is Valuation?” Investopedia Definition of ‘Valuation”
Let’s be honest, OnlyFans is actually tapped out when it comes to celebrities and influencers who will join their site they are just in denial about it. There is only one or two household name Adult Stars and they are both already on their site. Any celebrities who find OnlyFans edge in the adult world to be appealing are already on the site. So where can OnlyFans go from here? It can pretty much tread water. Meaning the amount of revenue and traffic it can generate is about to reach it’s peak and then flatline or go down. But OnlyFans is in a rock and a hard place position, they have to attract venture capital and investors to grow but if they do so they my have to eliminate the adult content that brings in most of their revenue. For many investment firms they have vice clauses that prevent them from investing in companies that deal in sex, gambling, illicit drugs etc.
Banking Institutions and Credit Card Companies
Although banks are famous for laundering money for the mob, drug cartels and oppressive regimes, they draw the line when it comes to pictures and videos of two consenting adults having sex and possibly someone profiting from it. The banks are a cartel and as any cartel does they make the rules and everyone has to play by them. So how are banks involved with OnlyFans if everyone is paying with their credit cards? Well beyond the fact that most Visa and Mastercard credit cards are tied to banking institutions, the banks decide what are high risk industries and which aren’t. When you are in a high risk industry you are subject to higher charge backs because the consumer often feels ‘ripped off’ in some way. So you can imagine if you are a gambler and you placed a bet and lost that you’d be irritated and blame the people you placed the bet with, this is turn causes you to try to issue a chargeback on the fee you made.
Now the banks have to do additional work and often are expected to be on the side of the consumer no matter how unreasonable they are. This is the same when it comes to OnlyFans, if someone just decides they regret subscribing to an OnlyFans or buying a PPV item on the site they can issue a chargeback as well. The banks don’t want or need the headache of these types of businesses but they will deal with them as long as the credit card processor pays the higher fees associated with it. So basically everyone is moving the cost down the line because the industry has been declared ‘High Risk”. OnlyFans is at the bottom of this line and as they say if you’re not the lead dog , the view is always the same. So OnlyFans has to play ball with the credit card processors, who have to play ball with the banks. If the banks say ‘NO WAY’ , then the credit card processor who doesn’t want to lose their relationship with the banks via Visa and Mastercard then tell a company like ‘OnlyFans’ how it’s going to be. This plays back into valuation and why investment firms aren’t keen to invest in companies like OnlyFans, because when you’re doing your risk assessment the big question is going to be, who is really running this company, you or the banks? In the end for OnlyFans as long as it continues to be the NSWF space, it will be the banks.
So as I mentioned with OnlyFans launch of the OFTV App, they are trying to thread the needle and move their business into a place where they are outside of the NSFW space. But as many people including myself are asking, ‘Why are they doing this?’ The answer is ‘Greed’.
Some people are in love with the companies that they found and leaving that company would be like tearing off one of their arms. Steve Jobs kept coming back to Apple because he enjoyed being a visionary and he loved Apple, it was his baby. Some people just start companies to make money and are looking at a way to profit from it at it’s height. There are four real directions you can go as a company when you hit it big. You can..
Milk it for All It’s Worth
This is where a company grows drastically but the founders know that what they are selling is likely more of a fad than a trend. So they promote it endlessly and try to get as many people signed up while it’s hot as possible. Most of these companies end up flaming out after a short amount of time but the founders make a good amount of money and enjoy the ride along the way.
Try to Go Public and Get a Big Pay Day
This is the route OnlyFans is attempting right now. If I am being honest it is the oddest of routes they could take but likely the one being taken in order to cover up any issues the business model might be having with a boat load of money. Most business’s that have IPO’s are able to borrow a lot of money tax free from their stocks and this could be a deciding factor on why they want to go this route.
Sell Your Company to a Similar Company or Outside Investor
There are several large adult companies who would likely make a good offer for a company like OnlyFans. It would fit well into many companies business portfolios and they’d be able to keep the Adult nature of the site while branding it with their own name as well. This has always made the most sense for OnlyFans but they likely wouldn’t get paid as much through a deal like this.
Nurture the Company you love to long term Growth and Sustainability
It’s no shock that owners who love their companies want to see them succeed and be the leader in their industry. This typically doesn’t start with any rush towards going public or cashing out. The first thing they do is analyze all their business functions and make sure they are working well for their employees and customers. Since OnlyFans creators are a core component of their business model making sure all creators feel supported would be a top priority. Next would be constantly investing in improvements on the website to make sure it was as good as it could be and had all of the latest functionality for profitability. The user interface as well as the creator areas would be the best tech possible and you’d re-invest your profits into the site to make it viable to all new customers who joined your website. After you made sure that all this was done, you’d look out to investors knowing you had the very best business you could then present to the world.
What Does OnlyFans Future Look Like?
As mentioned I feel like OnlyFans is going the most difficult route in it’s business development, but the one they hope to enrich them the most in the long term. Here are the two possible future scenarios that play out for OnlyFans.
LongShot Scenario – OnlyFans miraculously passes through all the valuation loopholes, gets past all the ingrained issues with being attached to the sex industry and gets and influx of venture capital allowing it to become flush with funds. They overhaul their site interface bringing it up to date with brand new features that attract many new influencers to monetize themselves on their site. The company goes public and has an IPO making the founders of the company rich in the process and they eventually step down and allow people with more management experience over large Social Media companies to take over. OnlyFans becomes the Hub for Online Influencers sectioned off much like Reddit for NSFW and SWF interests.
Likely Scenario – At the behest of the banks and in hopes of gaining favor with investors OnlyFans sheds it reputation as a purveyor of porn and moves towards the Patreon model of ‘artistic erotic expression’. The influx of new creators which the site relies on for steady growth begins to dry up as soon as another site gains traction doing what OnlyFans was doing just a month or so prior. The buyers stick around at first but eventually the bloom starts to come off the rose as OnlyFans becomes yet another site competing for a small share of the sponsorship market (sites like locals.com are already moving in that direction even away from Patreon). OnlyFans holds on for quite a while as many of the big creators will continue to post in order to get their big paychecks. Although OnlyFans which is fueled almost entirely by buzz and not a very good business framework or systems begins to falter just as investment begins to hit the site from the outside. As the site looks to move towards an IPO, the competitor or competitors that are now eating away at it’s market space make that a moot point and investors pull out. OnlyFans then tries to rebound by once again allowing explicit adult material on it’s site.
What OnlyFans Should Do
OnlyFans intelligently sees that they can have their cake and eat it too. They follow the Laws of Branding and Marketing and do not attempt to extend their brand but create a new brand for their SFW content. This leaves OnlyFans to continue to be an edgy buzz worthy place where anything can happen. They rebrand by investing in a big domain like Fans.com or add a new flashy word in front of “Fans” that signifies that this space will be SFW content. If your brand is actually worthwhile outside of the NSFW space then it will thrive no matter what name you give it. This prevents you from cannibalizing your current success with the site that you already built and the hundreds of thousands of creators on OnlyFans already. the majority of which are NSFW creators.
So many people online took the opportunity of the news that OnlyFans may be eliminating Adult content to sell their dreams of a Crypto and NFT future for adult content. While that may be the ideal future due to heavy regulations against adult content by government regulated banks, it simply is not the reality on the ground right now. Although many companies have attempted to make setting up a crypto wallet as easy as possible it is still time consuming and very unusual for those used to a quick ‘add your credit card number and go’ scenario. It will take a time when crypto wallets have hit critical mass before a site like OnlyFans could possibly even experiment with taking crypto currency let alone become wholly crypto in its transactions. Only a startup that caters to the crypto market could make that successful and they’d have to give up most of the general market in the process. So at least when it comes to OnlyFans crypto is not something they would be able to implement quickly to avoid regulation from banks.
Lip Service to Most Creators Creates Resentment
The problem moving forward for OnlyFans is mainly going to be that the only thing that ties creators to them is that they can make more money on OnlyFans than other platforms. Other platforms bend over backwards to provide creator support, additional features and to create a safe community for creators especially those who provide NSFW content. OnlyFans has never done any of those things, often shutting them out of free publicity, grants and mentions on the platform. Most creators know that OnlyFans thinks they are better than the content they produce and that the site itself is better than them as well. The issue is that OnlyFans sees creators as their employees and staff. They do not see their creators as customers when they actually are more in line with customers than staff. Unfortunately we live in an age where staff is treated horrendously while companies prosper off of their efforts. OnlyFans thinks of creators like warehouse workers who have nowhere else to go but to work for them. OnlyFans creators are partners in the success of the platform and it can’t be said enough that there would be no OnlyFans without the content creators. This means all of OnlyFans creators are partners not just the Stylists and DJ’s they want to put on their Instagram and Social Media. If the future of OnlyFans is a caste system where celebrities are allowed to be in spaces the lower caste creators are not it will continue to create a huge divide between creators and the site itself.
OnlyFans Needs to Choose Happy Creators or Greed as it’s business model
All businesses operate under a business model that guides their decisions and actions. Many businesses have mission and vision statements that they base culture and actions on. Right now OnlyFans Mission Statement is this
We Make You Money, We want to Make More Money, Where else are you going to go, really?
OnlyFans 2021 Unofficial Mission Satement
What Will the Future Bring for OnlyFans?
They say to look to the past for indications of the future and when doing so it becomes apparent of the issues that OnlyFans will face in order to become a company with the ability to stick around for the long term. The best two comparisons to OnlyFans are MySpace and Tumblr. Both of these sites were popular because they hit at just the right time when people online were looking for new ways to express themselves in a more unregulated environment. I spent hours personally working on MySpace pages as they were the natural evolution of sites like Geocities and AngelFire. Where those sites didn’t allow interaction with others, Myspace gave you the ability to interact between pages while adding your own flair to your page. Myspace was hugely popular and then as many fads do just seemed to vanish in popularity overnight. The second is an obvious comparison that being to the site Tumblr which still exists today but had a huge surge in popularity again because it allowed people to express themselves however they wanted in new ways. Tumblr ended up being a place where people could create adult based pages and promote them to the world. When Yahoo came in and bought Tumblr they decided to remove all the NSFW material off of the site and soon Tumblr’s traffic plummeted. What can we learn from failures of highly popular sites that don’t last?
- They Offer a New Way to Express Yourself That Didn’t exist before
- They don’t limit your self expression on the site.
- As the site becomes more regulated and stifling people find a new place to create content on
- The Sites obvious flaws are exposed and site traffic starts to plummet
- The site becomes a shell of what it used to be
OnlyFans is heading in the direction mentioned above if the rumors of further regulation are true. We have already seen a lot of restrictions put on self expression on the site in the last year some which were needed and others that existed just to assuage credit card processors and investors. The future for OnlyFans is in its hands but if it decides that greed and growth are the only things it will concentrate on and not improving the site and it’s relationship with it’s core creators it will likely be a tale of warning and not one of unbridled success.
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