Hard-core business: valuing OnlyFans

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1:11Hello and welcome to The Intelligence from The Economist. I'm your host, Rosie Bloor. Every weekday, we provide a fresh perspective on the events shaping your world.

1:25In advance of the Dalai Lama's 90th birthday this weekend he's announced that he will indeed be reincarnated after he dies That may sound esoteric but it has big implications for the future of China-Tibet relations And in LA, a posh grocery chain recently started importing and selling individually wrapped Japanese strawberries for$19 each Our correspondent explores the new craze for luxury fruit.

2:03But first...

2:11You can choose to either get involved or just walk around, watch, enjoy the show. In certain parts of the internet, Bonnie Blue is one of the most famous people. The 26-year-old from Nottingham in Britain has taken over TikTok feeds, Instagram reels and YouTube shorts with content that isn't exactly family-friendly. 600, done. The most high profile is probably a stunt where she claimed to have slept with a record number of men in 24 hours. Big 1 ,000 was well and completely done. Her challenges, as she calls them, made her a lot of money on OnlyFans, a British website where customers pay performers directly.

2:52OnlyFans has shaken up an industry with a dark side, and it could soon be up for sale. So apparently OnlyFans is on the block for about$8 billion. Avantika Chulcotti is our global business correspondent. We haven't got the latest financial data from them, but the last time they reported, they were making revenues of about$1.3 billion. Their operating profit was comparable to any big tech firm. So yes, this is an adult content streaming website, but it's also an incredibly large, fast-growing business. So how does OnlyFans work? So OnlyFans is not like the traditional online porn firms. So traditionally, you had these things called tube sites where anyone can upload content more or less and more or less anyone can watch it.

3:42And they relied on advertising to make money. As you can imagine, it's hard to make money off advertising. Not everyone wants to advertise on a porn site. So what OnlyFans does is it's got basically a subscription model. You've got a few million creators and then a few million subscribers. And they pay to see the content posted on the platform. On top of that, they can pay tips, they can pay for bespoke content, they can pay to chat to their favorite content creator. And this is a really good way of making money because what OnlyFans can do is they can keep 20 % of the revenues, hand 80 % to the creators, and you're finally finding a way to actually be profitable as a porn site.

4:25You're not relying on advertising and you've got a clear stream of revenues. So you're talking about content creators, the people who are performing the porn. How much do they make? So it's not even. There's some creators and OnlyFans who make a huge amount of money and then a long tail of creators who make almost nothing at all. Perhaps the most famous person, of course, is Bonnie Blue. I interviewed her and she told me that she made$250 ,000 just in March through these stunts that she does. And, you know, when I spoke to her, what really came across is that this is a business that she runs. She's really a businesswoman.

4:59She's not doing this alone as well. She's got a team of people around her, photographers, security, videographers, things like that. And she herself has to do a huge amount of admin to make all this happen. Yeah, being an online creator isn't as glamorous as what it can seem like. Like, yes, I travel a lot and do nice shopping trips. But I'd say 60 to 70 % of my time is sat on a laptop, replying to messages, making custom videos. it's not just having sex all the time. A lot of it is just speaking to people, getting to know people and understanding their lives and getting to know them. So the job consists of a lot, a lot of admin, more admin than when I was an administrator, basically.

5:42That said, it's a pretty difficult business because in order to get the subscriptions she needs to make this much money, she's clearly aware that she has to make content that's controversial that gets people's attention. So when I make TikToks, I preempt the backlash videos because it's the backlash videos which push it to go viral. Because the men that sleep with me, a lot of the time, I mean, some of them make TikToks and social media posts about it. A lot of them don't. It's the wives and the women that sit there and will make more TikToks about me, which pushes it to a wider audience. So a lot of the time when you're making viral content, it's more playing off the backlash than it is the positive feedback.

6:25Avantika, Bonnie at least sounds like she's pretty much in control of what she's doing. She's got a lot of agency. But we know that there's a darker side to this, don't we? We know that there's the potential for creators to be exploited, for miners to be exploited, for miners to access the content or for content to be illegal and inappropriate. So how has OnlyFans addressed those sorts of issues? Yeah, of course. There's a lot of research about how vulnerable a lot of these people are. You know, you call them porn stars. A lot of them are just amateurs who are doing this just to try and make ends meet.

6:58They're vulnerable people. At the same time, there's a lot of data, a lot of research about the number of young people nowadays who access porn by mistake. They access it as young as 13 on social media sometimes, not even on official porn sites. And the thing with OnlyFans is it's not perfect, but because it makes money, it's actually able to put some basic security checks in place. So in the UK and some other jurisdictions, they have an age verification system that scans your face and you have to be above a certain age to make an account and access content on OnlyFans. On the side of the creators, you know, it can take 24 to 72 hours to open a creator account on OnlyFans.

7:42They have real people who sit there and do background checks on new creators, look at ID, look at their other social media accounts, make sure that they're not AI impersonators, make sure that they're not lying about their age, things like that. They sound like very basic checks, but they are things that OnlyFans does that really not every adult content site does. But that kind of content creation still needs policing from the outside as well, doesn't it? Yeah, and there's two ways that this content is policed. First, regulators, and I'm afraid a lot of the rule books are quite out of date, but also through payment providers.

8:19If you are taking payments for a site like OnlyFans, you don't want to be caught up in a massive scandal around child pornography or people trafficking and so forth. Just this week, Sweden introduced new rules. And the new rules mean that if you're paying for adult content, videos, photographs, you could face up to a year in prison. You can see the policymakers trying to shift. OnlyFans, I told you about the age verification systems they have in place, but they were actually fined by Ofcom, the British regulator earlier this year, for basically misreporting what they were doing in terms of age verification.

8:57It went pretty much unnoticed, but earlier this year, the UK government also had an independent report published on the state of the porn industry. After that, they have announced a ban on strangulation in porn. So you can see the policy environment changing. It's not good enough. It's very hard to enforce. But there is some sort of ongoing shift in the rules around these platforms. And who will want to buy OnlyFans? This is a really interesting question. It's not a normal business. For a lot of investors, it's totally untouchable, off limits. But there are, of course, some investors that are interested.

9:32And that's what's coming out in these leaked reports about a deal. And$8 billion sounds like a lot of money, but in many ways, it's not. If you think of OnlyFans as a marketplace, compare it to, say, Uber or Airbnb, at$8 billion, that's quite a small multiple for the firm. In fact, if it was being sold at a multiple more comparable to Airbnb or Uber, it would be valued at about$28 billion. That's just sort of a back of the envelope calculation. So yeah, not everyone's going to be willing to buy a firm like that. But if you're not squeamish and you're willing to get involved in porn, you could end up with a bargain on your hands.

10:11Avantika, fascinating stuff. Thank you so much. Thanks for having me, Rosie.

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11:40Well, this was a hugely anticipated statement because it comes just a few days before the Dalai Lama's 90th birthday this Sunday. and he's been saying since 2011 that this was the time when he was going to clarify his succession plan. Jeremy Page is The Economist's Asia diplomatic editor. And the big news is that he's confirmed he will have a successor as the Dalai Lama and that successor will be identified after his death in the traditional way. So as a child who is considered his reincarnation.

12:21So you can see in the video, the Dalai Lama looks much the same as we're used to seeing him. He's wearing his monk's robes, maroon and saffron robes. But you can tell that he is slowing down a little. He's reading from a document a little haltingly, sometimes struggling to read a bit.

12:42And this statement was watched very closely all around the world because it has huge implications for everyone who's concerned about the future of Tibet, not least the governments of China and of India. So Jeremy, just break this down for us. What exactly is supposed to happen when the Dalai Lama dies? So according to Tibetan Buddhist tradition, after Dalai Lama's death, aides and senior lamas identify an infant as his reincarnation. The current Dalai Lama, who's the 14th in the lineage, was identified as the reincarnation when he was just two years old. That was in 1937. And that was on the Tibetan plateau within the borders of modern-day China.

13:25He was enthroned at age 15. But there's been a lot of uncertainty around this Dalai Lama's succession for a number of reasons. Dalai Lamas don't have to be reborn. They can choose not to be. They can also emanate, which means that they essentially manifest as another living person while they are still alive. And there's been a lot of discussion in recent years about both those options. And so this statement really sort of clarifies for the first time that the succession will be done the traditional way through reincarnation. And what's the reaction been to this video where the Dalai Lama says he will indeed be reincarnated?

14:04It's been widely welcomed by Tibetans. So I think I've been craving a bit of certainty about this decision. But not surprisingly, it has met with a swift and very firm response from the Chinese government. Communist Chinese forces seized Tibet in 1951, and then the Dalai Lama fled to India eight years later and set up his government in exile, which he led until 2011 when he gave up his political powers. But what this is really all about is China's control over Tibet going forward. It hopes that the death of this Dalai Lama will really undermine international support for his non-violent campaign for greater autonomy for Tibet within China.

14:47And China is almost certain to appoint a rival successor after this Dalai Lama's death and then to put pressure on foreign governments to recognize their choice as the next Dalai Lama. So this could really turn into a test of the democratic world's willingness and capacity to stand up to Chinese coercion and disinformation. Just before we get to those wider implications, you were at an audience with the Dalai Lama ahead of this announcement. And I'm wondering what that was like. Yeah, it was really interesting to see him in person. I've met him before, but not for a while. So I went to Dharamsala, which has basically been his adopted hometown since 1959.

15:26It's in northern India in the foothills of the Himalayas. And I was invited to a group audience. So there were about 300 people lined up there to meet him outside. died. So he looked pretty lively for someone approaching their 90th birthday. I tried speaking to the Dalai Lama himself to ask about his succession plans, but he just sort of smiled benignly at me and didn't really respond. And then I did manage to interview a bunch of people from Tibetan government in exile. There's a parliament in exile as well. I spoke to a few of their members about what their expectations were, not just for succession, but also for what happens with the Tibetan movement after he dies, because that's one of their key questions is, will they continue to adhere to his approach, which is calling for greater autonomy within China?

16:11Or will they start to push for complete independence from China? Tibet is very dear to all Tibetans. But then His Holiness says, are we going to get Tibet at the verge of the extinction of whole Tibetan values, to pattern culture, to pattern religion, to pattern whatever values that are very dear to us. You may aspire for complete independence, but then we live in a world where we have to be pragmatic. Jeremy, wherever the next Dalai Lama is found, and even if there is more than one potentially identified, surely there's going to be a power vacuum while that child is small and in the ensuing years.

17:00That's right. That's one of the interesting implications of this announcement. The reason that people had discussed the possibility of emanation, so that's him manifesting himself as a living adult while he's still alive, is that would have allowed him to basically handpick the successor himself and then to train that successor while he was still alive. Following this traditional model, you inevitably have a period of probably a decade or two while the child who is identified as the successor after his death grows up and is educated and trained. And they probably won't be enthroned probably until they're in their mid or late teens.

17:37So they won't assume all of the responsibilities of the Dalai Lama until that point. So you have a period in which China will be maneuvering both within Tibet and internationally to try and give greater credibility to its choice as the Dalai Lama. So that creates some risks. But I spoke to Apem Patsaring, who is the head of the government in exile, before this announcement. And he said he thought those risks were manageable because the Dalai Lama has given up his political powers since 2011. He's no longer head of the government in exile. So political authority now rests with the government in exile.

18:14And then he said that various other senior lamas could provide religious leadership and authority in the interim period. So what does all this mean in the end for Tibet-China relations? I think we're entering a very uncertain period for both sides. For China, the real risk is that after the Dalai Lama's death, they lose the one figure who commands enormous authority amongst almost all Tibetans within Tibet and outside. So it's the one person with whom they could have reached a negotiated long-term settlement that might have really legitimized the Communist Party's rule in Tibet. And without him, the Tibetan movement might fragment and might start pushing for independence in more radical ways, which might not succeed in the short term, but it could undermine China's international image and it could really damage China's efforts to enforce ethnic harmony at home.

19:13And then for the Tibetans, I think there's a real risk that they lose this unifying figure, this link between Tibetans inside Tibet and in the diaspora, and that that debate about whether to pursue independence or greater autonomy intensifies. And then I think there's a real danger that because the Dalai Lama is such a charismatic and popular figure globally, that really the Tibetan movement just sort of slips off the international agenda after his death. Jeremy, great to talk to you. Thank you so much. Thank you, Rosie.

19:57This is the train to Journal Square. A couple of weeks ago, I made a trek from New York to New Jersey to visit a strawberry farm. Holly Berman is a news editor at The Economist. Hi, Eric. Great to meet you. Nice to meet you. Great to meet you. Thank you for having me. Thank you for coming all the way out. I know there's a huge mental hurdle of crossing the river. This wasn't any kind of strawberry farm. This was a vertical strawberry farm. It's an indoor farm that grows crops in vertically stacked layers. It's run by a company called Oishi, and I was shown around by their CEO, Hiroki Koga. Okay, great.

20:36Cool. So this is sort of the experimentation area. Are you right? I'll first show you the water reservoir. Okay.

20:49Take off your shoes here again. I was asked to switch into some special shoes, bright strawberry red slides, just in case you wanted to know, to avoid contamination. Peeking at the farms through a window, their leaves seemed to stretch for miles. I saw rooms full of seedlings and rooms full of fully grown berries being harvested and packed. I was also shown an area where their researchers test new varieties to grow. Everything is automated. of precision, from tracking the number of bees in the facility to the weather conditions. So we can do very extreme experiments here, such as like, let's turn one day into two days.

21:27So we can do like six hour days, six hour nights, and then do like a 12 hour day times two within 24 hours. Oh wow, and how is that just by adjusting the light levels? Yeah. Yeah, so we can like turn on and knock the lights, we can change the temperature, all of that. Many of the stories grown at the farm are Japanese varieties. and they don't come cheap. One box of their omakase berries costs around$14. That's roughly triple the price of a pane at Walmart. Getting people to taste its products is how Oishi understands it will sell them. And there are lots of creative ways it's doing that. Hiroki recommended bringing a few packs to a party instead of a bottle of wine.

22:05Instead of, you know, a$30 wine, if you brought three packs of our omakase berries or these tomatoes, I'm sure you'll be able to impress the host much more than a$30 wine, right?

22:24This hasn't all come out of nowhere. Fruit has a luxurious history. So pineapples were once prized by British aristocrats, and in Japan, fruit is bought as a gift. In 2016, a bunch of ruby Roman grapes, which are sought for their size and their sweetness, were sold at an auction for$11 ,000. That's around$350 per grape Now, foodies and social media are together turning America into a growing market for luxury fruit It's Japanese fruit that is causing the biggest sensation and intrigue Over in Los Angeles, Erwan, which is a posh grocery chain Recently went viral for importing and selling individually wrapped Japanese strawberries for$19 each Japanese crown melons, which are grown in limited quantities can sell for hundreds of dollars, and specialized businesses are sprouting up to meet the moment.

23:18Aikigai Foods is a Tokyo-based exporter that launched in 2023. It sells everything from boxes of persimmons for$128 to$780 sets of strawberries. Their price is taking into account the air freight and increasingly Donald Trump's tariffs. They also have to account for unpredictable weather conditions. Last year, Japan's strawberry season was delayed because of a hot summer.

23:49Oishi can avoid those challenges by growing its berries in America. Its sleek branding and influencer marketing have made its strawberries a hit on Instagram. Investors are interested. The company secured$150 million in its most recent funding round in November, and it's now opened a second, larger farm in New Jersey. Really recently, they launched a new strawberry, marketed as their most affordable yet for around$8 a box. It's also developing a white variety. And despite being no food critic, I of course had to give those a try. Very soft. Very sweet. And also what's so interesting to me is that the inside is just pure white.