eCommerce: Content Subscription Platforms

Content Monetization: Key Insights

• How Platforms Generate Income: OnlyFans, Twitch & Patreon are all subscription-based and charge fees for audience transactions. The degree to which creators can set subscription fees varies.

• Most Revenue on Twitch: Amazon-owned video streaming platform Twitch surpasses OnlyFans and Patreons in terms of revenue and user numbers. While OnlyFans has less traffic than Patreon, consumers tend to spend more per interaction.

• Investigating Patreon: As a platform with specific content for diverse interests, Patreon relies on a loyal fan base of users. Paid memberships have grown steadily over the past 6 months and payouts have fluctuated, which is due to various factors.

It has never been easier than now for people to broadcast their own content and generate a following. The creator economy is a term for the digital ecosystem in which individuals monetize their uploaded content, generating income for both themselves and the platform that provides the digital infrastructure. 

Popular examples of online platforms with user-generated content include YouTube, TikTok, Instagram, Facebook, Spotify, Twitch, OnlyFans, and Patreon. While the first five platforms are widely known to the general public, Twitch, OnlyFans and Patreon have more distinct characteristics and barriers to entry. 

As three user-generated content platforms with subscription services, what defines the business strategies of OnlyFans, Twitch, and Patreon?

Platform Monetization Strategies

The common denominator among these platforms is that they operate on a subscription model. However, there are differences in the degree to which creators have the freedom to set their own prices and how much they earn from audience interactions.

How Does Twitch Make Money?

The Amazon-owned platform has three fixed subscription tiers (monthly fees of US$4.99 / US$9.99 / US$24.99) that are tied to specific benefits. These include custom subscriber badges, emotes and “cheermotes” (animated emotes), and other channel-related benefits.

Twitch’s digital currency is called “Bits”, which subscribers use to pay their favorite creators. Streamers receive between 60% and 80% of paid Bits, depending on factors such as location, number of Bits and streamer popularity.

How Does OnlyFans Make Money?

Creators can decide how they want to charge subscribers, whether they want to set subscription tiers or charge a flat fee, and whether they want to offer content for free.

The three main revenue streams on OnlyFans include a monthly subscription fee (capped at US$49.99), pay-per-view content (up to US$200 per item), and tips from registered users (capped at US$100 per tip). Direct messaging is also charged up to US$50 per message. OnlyFans charges creators 20% per transaction received.

How Does Patreon Make Money?

Similar to OnlyFans, Patreon allows users to set their own subscription tiers. While creators can also choose to offer free content, users still need an account to view it.

Unlike OnlyFans, however, Patreon does not allow pornographic content. Depending on the services Patreon offers, the platform charges creators between 5% and 12% of the transactions they receive.

In addition to subscription-based revenue, platforms and creators generate income through advertising. The primary source of revenue, however, remains the provision of the platform and related services.

Platform providers ensure that content remains exclusive to subscribers and install safeguards to content access so that creators are incentivized to continue using the infrastructure.

Twitch Generates the Highest Revenues, OnlyFans Follows Second

Of the three platforms, Twitch is the most lucrative. Launched in 2011 and acquired by Amazon in 2015, the livestreaming service allows for real-time online interactions between streamers and their audiences. Users can also re-watch previous streams on demand. 

Twitch’s revenue jumped from US$1.9 billion in 2020 to US$2.7 billion in 2021, a 41.8% growth. The pandemic spike was followed by slower growth in 2022, reaching US$2.8 billion.

Internet users seeking company during global lockdowns certainly contributed to Twitch’s immense growth during this time, and the platform’s sustained traffic since then suggests that this surge helped solidify Twitch’s recognition.

OnlyFans is another platform that gained popularity during the pandemic, but it was founded in 2016. Originally established as a platform for creators of all kinds to monetize exclusive content, it is now notorious for featuring primarily adult-oriented creators. 

The impact of the pandemic is also evident in the case of OnlyFans: With a year-over-year growth rate of 158%, OnlyFans’ revenue increased from around US$360 million in 2020 to US$930 million in 2021. After that, the platform managed to bypass the 1 billion mark the following year, bringing in US$1.09 billion in 2022. 

Patreon generates the lowest revenue of the three platforms, ranging from US$50 million in 2020 to US$130 million in 2022. The pandemic did not lead to the same surge as OnlyFans and Twitch.

This could very well be due to Patreon’s specialized business niche, where the only way to access the content is to sign up for a membership. In contrast, both Twitch and OnlyFans operate on a freemium model, where users can get a taste of what awaits them as members with free snippets. 

The exclusivity aspect certainly has an impact on the following KPIs.

Traffic Analytics: Twitch Engages Users Most

Among the three platforms, Twitch again stands out with the highest average site visits (1.1 billion), the lowest bounce rate (29%), the highest average number of pages visited by users per stay (4.1), and the longest average time on site (9 min 11 sec).

More interesting is the discrepancy between Patreon and OnlyFans: While Patreon has more site visits, a lower bounce rate, and higher average page visits and time spent, OnlyFans still generates more revenue than Patreon. 

It is reasonable to assume that even though OnlyFans has lower overall engagement, the amount spent per OF user exceeds the contributions paid by the average Patreon subscriber. OnlyFans’ high bounce rate of 75% and short average time spent on the site suggest that many visitors leave after a first glance, while the portion of users who stay longer and visit the site regularly also tend to pay large amounts (consider that writing one message can cost up to US$50). The largely adult-oriented nature of the content explains this dynamic. 

Patreon is stricter about the type of content it allows users to post. By catering to specific tastes and fandoms, it ensures a steady stream of income.

Patreon: Growing Paid Memberships, Fluctuating Creator Payouts

Using Patreon as an example, which is possible due to the availability of data that the other platforms do not yet provide, the chart below illustrates the relationship between paid memberships and monthly creator payouts.

The number of paid memberships has grown slowly but steadily over the past 6 months. From August 2023, when 13.1 million members paid various subscription fees on Patreon, this number reached 14.1 million by February 2024. 

In contrast, the estimated monthly payouts to creators have fluctuated. From US$22.4 million in August 2023, it reached a temporary peak of US$24.2 million in the following month. After that, payouts hovered between US$23.6 million and US$23.9 million throughout February 2024. 

Reasons for payout fluctuation: It is possible that members changed the number of subscriptions or moved to different subscription tiers, that creators changed their content output, or that an increasing number of lower engagement creators shared their work, resulting in higher subscription numbers at lower payouts.

Subscription Models: Closing Remarks

In a creator economy, three platforms with a subscription-based revenue model but different methods of delivering value to their customers represent distinct branches of this field. Twitch, in line with its Amazon subsidiary relationship, towers over the other two platforms in terms of engagement and revenue. Patreon engages more users but generates less revenue, while OnlyFans attracts fewer users who tend to pay more to creators. 

Each platform has found its own way to become indispensable to creators and audiences, but there is growing competition from smaller players with highly liberal regulatory frameworks and more favorable payout plans. However, due to the larger reach of the incumbents, few of them are likely to be overtaken by smaller players that are more attractive to controversial and barely legal content types.

Sources: Backlinko – Business Model Ideas – Business Model Analyst – Forbes – Patreon – Scrile – Statista – TechReport – Twitch – Variety