News Roundup #10: Snap launches its own version of Creator Fund & rare interview with OnlyFans CEO

Welcome to Issue #10 of the Means of Creation weekly news roundup where we break down the latest news on the passion economy, including the happenings related to platforms, creators, startups, and trends.

This Week’s Interview: Courtland Allen

This week we interviewed Courtland Allen, founder of Indie Hackers — an online community that focuses on entrepreneurs who build profitable internet businesses.

Find it as a podcast on Apple Podcasts, Spotify, Overcast, Breaker or wherever you listen to podcasts, or as a video on YouTube here. Or subscribe to the Means of Creation YouTube Channel. And now, onto the news.

Snap Launches Spotlight, its version of TikTok

What Happened?

Snap adds “Spotlight”, a new tab to their app where users can watch Snaps (including videos) from other users. Spotlight serves users videos through an algorithmic feed, similar to TikTok.
Additionally, Snap is offering “over $1 million per day” to creators of videos that go viral on Spotlight.

Li’s Take:

Evan Spiegel has often been jokingly referred to as the VP Product for other social media companies, but in this case, Spotlight closely resembles TikTok’s Creator Fund, which is paying out $200m to creators.

Nathan’s Take:

The most interesting thing about this move is that you can’t upload watermarked video — so, unlike Reels, there won’t be any TikTok cross-posts.
This will give Spotlight a classier feel than Reels, but if history is any guide, it could be a mistake. YouTube famously outcompeted Vimeo on the basis of looser content guidelines. While Vimeo was focused on high quality original creations, YouTube allowed clips from anywhere to be uploaded. We all know how that turned out.

OnlyFans CEO Discusses Future Roadmap

What Happened?

Last week, OnlyFans CEO Tim Stokely was interviewed by The Information to discuss the platform's future plans.
While it is currently known for adult-content, one of the priorities is to diversify the types of content on the platform, to categories such as music, sports, and comedy.
This interview revealed that OnlyFans has passed $2Bn payouts to creators since its founding in 2016, which means that total cumulative GMV has been $2.5M. That implies OnlyFans has netted $500M revenue over the course of just <5 years (the platform takes 20% of earnings).

Li’s Take:

Another creator membership platform that just crossed $2bn cumulative payouts to creators this year is Patreon, which was founded in 2013. Notably, OnlyFans doesn’t have any outside investors, while Patreon has raised over $250 million in VC funding, and was founded in 2016—3 years after Patreon. This is an instance in which the verticalized version of something can actually be bigger than the horizontal—like how Twitch (which is mainly for gaming live streaming) is bigger than many horizontal live video-streaming platforms in the US.
In theory, OnlyFans should be a subset of Patreon, which was started earlier and is a horizontal platform for any type of creator. However, Patreon explicitly prohibits porn (although they do allow some nudity).
This is one of the disadvantages of being a VC-backed company: VCs and their LPs are conscious of the brands they’re associated with, and generally don’t want to be affiliated with pornographic content.
It’s interesting to also think about OnlyFans’ aims to go mainstream beyond adult content in light of its current scale. Although its adult origins may be dismissed as “niche,” its metrics in this interview show that its scale is anything but limited. Adult content may have brand risks, but has massive appeal to a huge population. (It’s kind of like how companies in China don’t need to internationalize because they market they have is so large already.)