OnlyFans To Net $1.2 Billion This Year And $2.5 Billion In 2022 Off Sex Workers’ Hard Labor

OnlyFans, the online creator platform known for its adult content, is struggling to find outside investors, according to multiple sources.

Between The Lines: Sex sells, based on company financials leaked to Axios, but it also scares off venture capitalists.

OnlyFans Remains In Market, seeking what a source close to the company refers to as a “strategic partner.”

• The Raine Group, a merchant bank focused on tech and telecom, this past spring began helping OnlyFans to solicit investors.
• Several deep-pocketed firms quickly passed, not even engaging in serious due diligence.
• The money it’s hoping to raise would partially cash out majority owner and porn mogul Leo Radivinsky, while providing management with what one venture capitalist calls “more legitimacy.”
• OnlyFans declined to comment for this story.

By The Numbers: Any other company with growth like OnlyFans would be able to raise big money in a matter of minutes.

What follows is rounded data from a pitch-deck that was compiled at the end of March. The 2021 figures are based on run-rate through the end of Q1, while 2022 figures are OnlyFans projections:

Gross Merchandise Value (GMV):

• 2020: $2.2 billion
• 2021: $5.9 billion
• 2022: $12.5 billion

Net Revenue:

• 2020: $375 million
• 2021: $1.2 billion
• 2022: $2.5 billion
• Over 50% of OnlyFans revenue in March came from paid subscriptions, while more than 30% came via chats. The rest was a combination of tips/streams and paid posts for free accounts.

Free Cash Flow:

• 2020: $150 million
• 2021: $620 million
• 2022: $1.2 billion

Total Amount Paid To Creators Since Inception:$3.2 billion

• More than 300 creators earn at least $1 million annually.
• Around 16,000 creators earn at least $50,000 annually.
• More than seven million “fans” spend on OnlyFans each month. It has even more users who only consume free content.

In Short, OnlyFans Has A Porn Problem, even though it never once mentions porn in its pitch-deck (something that multiple investors called “disingenuous.”).

• Some VC funds are prohibited from investing in adult content, per limited partnership agreements.
• Several investors are concerned about minors creating subscription accounts, although the company says it has controls in place to prevent that.
• Some investors say they could get past the porn, but worry that the company’s reputation would prevent it from attracting brand partners (despite this week announcing a “safe for work” product that features its growing number of clothed creators).
• A counterargument is that Snap is now plastered with advertising, and valued at $115 billion, even though it began as a way for teens to share nudes.

The Bottom Line: OnlyFans is one of the creator economy’s largest and most successful platforms. And investors are content to watch its success from afar.

Payment Processor Censorship Doesn’t Apply To Social Media Giants

Facebook Responsible For 94% Of 69 Million Child Sex Abuse Images Reported By US Tech Firms

The figures emerge as the UK is among seven nations warning of the impact of end-to-end encryption on public safety online.

Facebook was responsible for 94% of the 69 million child sex abuse images reported by US technology companies last year.

The figures emerged as seven countries, including the UK, published a statement on Sunday warning of the impact of end-to-end encryption on public safety online.

Facebook has previously announced plans to fully encrypt communications in its Messenger app, as well as its Instagram Direct service – on top of WhatsApp, which is already encrypted – meaning no one apart from the sender and recipient can read or modify messages.

The social media site said the changes are designed to improve user privacy on all of its platforms.

But law enforcement agencies fear the move will have a devastating impact on their ability to target paedophiles and protect children online.

Some 16.9 million referrals were made by US tech firms to the National Centre for Missing and Exploited Children (NCMEC) last year, including 69 million images of children being abused – up 50% on the previous year.

Some 94% of the reports, which include the worst category of images, came from Facebook, Home Office officials said.

But the National Crime Agency (NCA) has warned the number could drop to zero if Facebook presses ahead with end-to-end encryption.

Robert Jones, the NCA director responsible for tackling child sexual abuse, said of the plan: “The lights go out, the door gets slammed, and we lose all of that insight. It is as simple as that.

“And nothing, you know we’re relying on the best technical expertise… in the UK, the same people that keep the UK safe against terrorists, hostile states, cyber attacks, are telling us there is no viable alternative. I believe them. And I am deeply concerned.”

The NCA believes there are at least 300,000 people in the UK who pose a sexual threat to children, with 86,832 UK-related referrals to NCMEC last year, including 52% from Facebook and 11% from Instagram.

Mr Jones said industry reporting led to the arrest of more than 4,500 offenders and the safeguarding of around 6,000 children in the UK in the year to June 2020.

He continued: “The end-to-end encryption model that’s being proposed takes out of the game one of the most successful ways for us to identify leads, and that layers on more complexity to our investigations, our digital media, our digital forensics, our profiling of individuals and our live intelligence leads, which allow us to identify victims and safeguard them.

“What we risk losing with these changes is the content, which gives us the intelligence leads to pursue those offenders and rescue those children.”

Home Office officials say Facebook has not published credible plans to protect child safety a year on from Home Secretary Priti Patel’s open letter to the firm’s co-founder Mark Zuckerberg asking it to halt its end-to-end encryption proposals.

A statement signed by Ms Patel, along with the US, Australia, New Zealand, Canada, India and Japan – whose populations represent around a fifth of Facebook’s two billion global users – is calling for tech companies to ensure they don’t blind themselves to criminality on their platforms.

Ms Patel said: “We owe it to all of our citizens, especially our children, to ensure their safety by continuing to unmask sexual predators and terrorists operating online.”

The statement calls for public safety to be embedded in systems, for law enforcement to be given access to content, and for engagement with governments.

It Reads: “Encryption is an existential anchor of trust in the digital world and we do not support counter-productive and dangerous approaches that would materially weaken or limit security systems.”

“Particular implementations of encryption technology, however, pose significant challenges to public safety, including to highly vulnerable members of our societies like sexually exploited children.”

A Facebook spokesman said: “We’ve long argued that end-to-end encryption is necessary to protect people’s most private information.

“In all of these countries, people prefer end-to-end encrypted messaging on various apps because it keeps their messages safe from hackers, criminals, and foreign interference.”

“Facebook has led the industry in developing new ways to prevent, detect, and respond to abuse while maintaining high security, and we will continue to do so.”

In 2014, Snapchat introduced a new feature called Snapcash which spurred its popularity among adult content creators.^[158][159]

Snapchat allows private premium accounts in which users can monetize their content.^[160] This feature is mostly used by models to monetize their adult content.^[160] Snapchat is increasingly becoming an integral part of the online porn industry.

Revenge Porn

During the 2020 lockdown to inhibit the spread of COVID-19 in France, the app emerged as a hub for the dissemination of revenge porn of underage girls.^[194]

In 2020, a woman in North Carolina sued Snapchat (as well as dating app Tinder and the five men named in the attack^[195]), claiming features of the app enabled her alleged rapist and his friends to hide evidence of the rape. In particular, the suit alleges that “because of the ways Snapchat is and has been designed, constructed, marketed, and maintained, [the woman’s assailants] were able to send these nonconsensual, pornographic photographs and videos of [her] with little to no threat of law enforcement verifying that they did so.”^[196] The woman told the court that parent company Snap Inc. “specifically and purposely designed, constructed, and maintained Snapchat to serve as a secretive and nefarious communications platform that encourages, solicits, and facilitates the creation and dissemination of illicit and non-consensual sexually explicit content…and allowed Snapchat to operate as a safe-haven from law enforcement.”^[197]

Updated: 8-20-2021

Twitter Faces Claim It Benefited From Child Sex Trafficking

Two young men can proceed with a claim that Twitter Inc. benefited from sex trafficking involving them as teenagers when it published child pornography videos on its website, but they can’t pursue other claims, a federal court in California ruled.

The Trafficking Victims Protection Reauthorization Act’s requirements for civil claims, including knowledge requirements, are less strict than those for criminal charges brought under the Act, Chief Magistrate Judge Joseph C. Spero said Thursday for the U.S. District Court for the Northern District of California, allowing the benefit claim.

The remainder of the claims fail, either because the plaintiffs alleged them inadequately or because they’re blocked by the Communications Decency Act, he said.

Their product liability claim is distinguishable from one that the U.S. Court of Appeals for the Ninth Circuit recently allowed in a case against app maker Snap Inc. over a “speed filter” that allegedly led to a fatal car crash, Spero said. Unlike the speed filter, “the nature of the alleged design flaw in this case—and the harm that is alleged to flow from that flaw—is directly related to the posting of third-party content on Twitter,” he said. The CDA bars the product liability claim, he said.

The plaintiffs, who are suing under the pseudonyms John Doe #1 and John Doe #2, allege they were solicited at age 13 for sex trafficking and manipulated into providing pornographic videos of themselves to the trafficker, according to the court. Later, while they were in high school, links to the videos allegedly appeared on Twitter.

Twitter allegedly refused to remove the tweets when first informed of them. The posts were allegedly viewed more than 167,000 times.

The facts don’t fit a claim for direct sex trafficking under a correct reading of the TVPRA’s language, according to Spero, who’s presiding over the case. But the Doe plaintiffs successfully stated a claim that Twitter benefited from participating in a venture involving them and should have known they were sex trafficking victims, he said.

Spero disagreed with the conclusion of a federal district court in Florida on the standards for such a claim, saying they’re not as stringent as criminal requirements.

The National Center on Sexual Exploitation, The Haba Law Firm PA, and the Matiasic Firm PC represent the plaintiffs. Cooley LLP represents Twitter.

The case is Doe v. Twitter, Inc., 2021 BL 313988, N.D. Cal., No. 21-cv-00485, 8/19/21.