OnlyFans — First CardiB, Next Apple?
Source: OnlyFans
Disclaimer: I’m sure there will be someone reading this who is offended. As Gen-Z says, “It is what it is”. On to the essay.
The Internet is for porn. At least that is what the Broadway play, Avenue Q, tells me. Just look at the opening lyrics:
“The internet is really really great … For porn! I got a fast connection so I didn't have to wait ... For porn! There's always some new site … For porn! I browse all day and night … For porn! It's like I'm surfing at the speed of light … For porn!”
Porn Drives Innovation
The song goes on for four minutes explaining how every feature of the internet is for porn. It’s a hilarious clip that underlines the open secrets of innovation that no one wants to admit — porn drives innovation:
Porn standardized Super 8 film
Porn standardized VHS for videotaping format
Porn led to the creation of the first online payments system
Should I keep going? I think you get the point. Ok Ari, but what the hell does this have to do with audience building? Don’t worry, I’m getting there. Patience is a virtue.
What is OnlyFans?
So, there is a company on the internet called OnlyFans. You can pretend you haven’t heard of it, but I know you have. We’ll pretend you haven’t and I’ll explain what it is. OnlyFans is a content subscription service business. Sounds simple enough.
You sell exclusive content to your fans. Maybe I’m a fitness instructor and I want to give my “exclusive” workout session to my most dedicated fans. I can do it on OnlyFans.
Of course, that isn’t what it’s really used for. The majority of the site’s users are adult performers. And let me tell you it’s a big business. Thomas Hollands did a detailed analysis of their business and found unique insights:
The site is making between $54MM and $62MM in net profits
The valuation based on 15x EBIT is $810MM and $936MM
The site has an estimated 10M users (not creators)
Perhaps my favorite line from his analysis is his thoughts on the valuation:
“Who knew you could make so much money hosting nudes? The crazy thing is that this valuation is probably still too low. The estimate of the number of users is likely too conservative – The Economist has it at 12m. Also, it doesn’t take into account their recent surge in traffic, nor the likely sustained increase in traffic due to social distancing (See if you can work out why).”
And this is before CardiB announced she was joining the platform.
OnlyFan Goes Mainstream
In sociology a tipping point is defined as a point in time when a group—or many group members—rapidly and dramatically changes its behavior by widely adopting a previously rare practice.
Well, yesterday CardiB announced she was joining OnlyFans. This is OnlyFans’s tipping point. CardiB announced that the site will be used to show fans behind-the-scene footage of her music video, WAP. She declared that it wouldn’t be used for nudity.
Many people might not see this as a big deal. I disagree. The potential is infinite once creators and brands begin to see OnlyFans as not a fringe site, but a mainstream site.
Pretend you are an influencer like Kim Kardashian. You have a billion dollar eCommerce business and millions of fans. What if you could not only give “exclusive” access, but then only allow your “fans” to pre-order a product. Sounds far fetched, but not really. It makes a lot of sense. I even wrote about this exact idea last month:
“Companies will pay hundreds of thousands of dollars for sponsoring her social posts. Her brand, KKW Beauty, has a valuation of $1B.
It suffices to say she has a loyal following. What if she told her fans that they could join her "private club"? Once a week, her most dedicated fans would hear her talk. It's fleeting, authentic and epitomizes FOMO. How much would a fan pay to say, "I'm part of Kim's club?"
A lot!
Don't take my word for it. OnlyFans is already doing it with adult performers. It's estimated the company will take home $150MM - $300MM in revenue this year. Think of Clubhouse as OnlyFans for creators.”
Forget just influencers. I can see brands doing this. It’s not much different than having a Chase Sapphire card. You pay an annual fee and get access to a variety of unique perks.
I could see someone joining the Apple “Fan Club”. It not only offers a new revenue stream, but creates a more personal connection between customers and brands. The customers feel a deep connection to the brand. Apple could offer a private talk with the CEO or a special fan-only product. The ideas are endless!
Isn’t it funny how writing works? I started the essay about pornography as a driver of innovation and connected it to Apple’s brand strategy. Exclusivity is more important than ever for brands. It’s hard to differentiate yourself in the marketplace. A dedicated fan club just might go a long way in converting a customer into a life-long evangelist. And the next time you make a joke about the porn industry. Just remember, it might become an integral part of your brand strategy.