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If “Rocky” star Sylvester Stallone managed to make the shift from porn to the mainstream back in the day, why can’t OnlyFans? The online streaming site that specialises in “not safe for work” entertainment is discussing a sale to a private equity firm at a mooted price of $8bn. If a new owner can make OnlyFans less edgy, it could be worth much more.
The UK-based subscription service is known mostly for sexual content, though that’s not all it offers. But stand back, and its business model is something more versatile. The company provides video makers with a shop front, software tools and a way of accepting payment. Users, in other words, do the heavy lifting. Those kinds of business are scaleable: revenue can rise a lot without costs doing the same.
Investors have shown they’ll pay for those qualities. Think of the $19bn Reddit. Its online-forum denizens generate masses of content at no marginal cost to the company, which then uses it to attract advertisers, fuelling a gross margin of 90 per cent. Or Roblox, which provides tools for users to create games and micro-worlds hosted on its platform. Shares in both companies have more than doubled since early 2024.
In valuation terms — and again, forgetting for a moment the adults-only stylings — OnlyFans might be more like vacation-rental hub Airbnb and rideshare giant Uber, in that a decent share of the spoils go back to those who do the work. Uber, whose 25 per cent slice of total fares is comparable to OnlyFans’ 20 per cent cut, trades at more than 20 times ebitda.
Indulge, then, in a spot of financial fantasy. OnlyFans made about $650mn of ebitda in 2023, piecing together numbers in its UK tax filing. Assume its 20 per cent growth rate in that year continued, and it could make $1bn of ebitda in 2025. On Uber’s multiple, that’s $20bn. The mooted $8bn on offer today suggests a huge discount to that, admittedly much larger, company.
Back in the real world, porn is kryptonite to many investors, and not without reason. States from Alabama to Virginia have enacted restrictions on adult websites. Even though under-18s are strictly barred from the site, politicians and payment companies tend to be twitchy. OnlyFans executives have even had trouble with their personal bank accounts.
A buyer would therefore be betting on reinvention, or at least diversification. OnlyFans is attempting this already, signing up chefs and fitness influencers. But it’s a tough transition. Adult brand Playboy has struggled to become a lifestyle-based “pleasure and leisure” company. The shares are 85 per cent below their public-market debut price in 2021.
A more encouraging example might be not a company, but a place: Las Vegas. Its decades-long pivot away from gaming towards more wholesome pastimes has borne some fruit. Gambling made up just over 15 per cent of home state Nevada’s overall tourism revenue last year. If even Sin City can make itself seem safe for work, then maybe OnlyFans has a chance too.
john.foley@ft.com
