an economic investigation of OnlyFans

Introduction

Subscription-model pornography is a very new kind of sex work — the most popular website for this kind of content, OnlyFans, was founded in 2016 while traditional pornography sites have been around since 1995. OnlyFans (and other subscription pornography websites like FanCentro, LoyalFans, Fanvue, etc.) is a website where people can subscribe to individual sex workers’ content for a fee, which can be anywhere between $4.99 and $49.99 per month. After subscribing, users can view all the photos and videos that the sex worker has made available behind this paywall, and can continue viewing this content as long as they are subscribed. Other subscription pornography services do exist as well, such as deepfake and premium pornography websites. Deepfake sites allow people to pay a monthly fee in order to artificially generate pornography of a celebrity. Premium pornography sites require you to subscribe in order to watch the pornography that they produce in their studios — these websites are the same as popular free pornography websites such as PornHub, with the only difference being that a monthly subscription is required to access any content. However, because deepfake pornography is quite extreme of a case and people generally agree that it is highly unethical, and because premium pornography is very similar to prior discussions surrounding pornography websites in general, I will be focusing on websites like OnlyFans.

Because this mode of viewing pornography is fairly new, we need to examine whether it needs to be regulated further by the government, or whether we should be able to buy and sell it on the free market. In this paper, I consider a largely unregulated market method of distribution of this kind of sex work, and a non-market method.

The market method will be very similar to how subscription pornography is currently available to be bought and sold: a company, like OnlyFans, allows sex workers to post explicit content on their website. Then, users of the website can subscribe to the sex workers and view this content. OnlyFans includes a Terms of Service policy that both content creators and content viewers must follow (or risk losing access to their account). They also take a cut of the profit made by the sex workers in exchange for hosting the workers’ content. On top of this, federal laws apply: for example, sex workers cannot post revenge porn, which is classified as sexually explicit material of another person without that person’s consent. One additional constraint I will add is that the distributors (i.e. OnlyFans) must conduct thorough examinations of each sex workers’ content to make sure it corresponds with federal regulations, making sure the content is not being misrepresented through false advertising. They should also perform a baseline background check on all sex workers they “employ” to make sure they are 18 years or older. The government should enforce this standard by fining OnlyFans if a sex worker is found to be violating any of the aforementioned concerns — this way OnlyFans is incentivized to be thorough in their examinations.

The non-market method is a bit simpler: it consists of a total ban on all subscription pornography services such that the only way to access pornography would be through traditional pornography sites.

While the current market solution is not enough to offset negative externalities and information asymmetries surrounding subscription pornography, my proposed market solution would be helpful in doing so. Additionally, the market solution is better than the non-market solution for aggregating information, providing a mutually beneficial relationship between sex workers and distributors, establishing property rights, and providing opportunities for those interested in pursuing a career in sex work. While the market solution may still be somewhat inefficient, I argue that this is not so much of a concern that it necessitates the ban of all subscription pornography as in the non-market solution.

Efficiency

Preferences and Rationality

Ken Binmore’s Revealed Preferences defines stable preferences as preferences that are predictable, except in the case that something happens which renders the data relating to these preferences irrelevant. In the case of subscription pornography, people are unlikely to have well-defined preferences that are stable over time. Here, well-defined stability implies that the type of pornography that people are willing to pay for stays the same over time. However, people tend to discover new sexual preferences and may choose to purchase pornography that reflects these fluctuating preferences. So, the types of pornography that people choose to pay for can easily change, implying an instability of preference. It is also becoming increasingly popular for people to not pay for pornography once they enter a relationship, so we can consider them having a preference for “no pornography” over any other choice regarding pornography consumption.

People’s past choices might not generally be good predictions about their future choices regarding the kind of pornography they consume. As there is more discourse surrounding the moral implications of pornography, people may choose to stop consuming it. If people believe that pornography promotes violence towards women, or if they believe that under capitalism, it is exploitative, they may choose to stop consuming it altogether. Even if their past preferences, perhaps when they were ignorant to these issues, were to consume online sex work, this may not reflect their future preference to stop consuming it. Another relevant case may be the case of pornography addiction. While it is a debated issue as to whether or not there is such a thing as an addiction to consuming pornography, let us assume that it is a real form of addiction. In this case, someone who consumes pornography may develop a kind of tolerance to it. This may lead to them consuming more and more as time goes on, even if this was not their original pattern of behavior. On the other hand, if someone believes that their pornography addiction is extremely harmful, they may stop consuming it completely. Again, even if their original pattern was to consume this content on a daily basis, this was not a good prediction of their future behavior.

Supply and Demand

In Hausman’s Demand and Consumer Choice, the law of demand is defined as a model which predicts that when the price of a good or service increases, the demand for it decreases and vice versa. This law builds off of multiple factors that need to be held constant, including the perception of the product, prices of substitutes, and prices of complements. I believe that the law of demand may not necessarily hold over time, specifically because these factors will likely not stay constant. With easy access to the Internet, pornography consumption has increased exponentially over the years, so demand has been increasing as well. However because of inflation, creators of online pornography are forced to charge more for their work. So, we see the demand increasing while the price increases — this goes against the law of demand.

Substitutes are products that may be consumed in lieu of other products whose prices may have increased. One such substitute is erotic literature, which is usually cheaper and more easily accessible than pornography. This constitutes a violation of the demand curve. Another possible violation comes from complementary goods, which are goods that are usually purchased together. A complement for subscription pornography may be a VPN. Because of the negative stigma typically associated with pornography, people may not want their visits to pornographic sites to be available for others to see, which a VPN can prevent.

The law of supply states that as the sale price goes up, the quantity supplied also goes up. This is the opposite of the demand curve, where as the price goes down, the demand increases. In relation to subscription pornography, some sex workers may seek to maximize profit and try to supply more, perhaps by streaming for longer durations of time. However, sex work can be extremely physically and mentally taxing, so people may feel as though it is not worth it to supply more even when the price that people are willing to pay is increased. So, we may consider aggregate supply over time rather than supply in a given week or even month. On a similar note, suppliers of sex work may seek to maximize profit, but they determine how much they produce by taking into account whether their bodies can handle the extra physical and mental labor. However, when wages for sex workers increase, people may decide to start pursuing that kind of work due to higher profits. So, as price goes up, the amount supplied in the workforce increases.

Hausmann describes economic equilibrium as the point where the demand and supply curves intersect. This is where the buyers’ demand at the sale price of the good is exactly equal to the supply that the sellers have produced. In the case of subscription pornography, even if the price is low, there may not necessarily be more buyers because there are many websites that people can use to watch pornography for free. Consumers simply might not feel the need to enter the market for subscription pornography if there is a similar product that is more easily available. It is also possible that sex workers produce more pornography during seasons of higher demand, and save this content to release during seasons of lower demand. This implies that during seasons of lower demand, there is still some old content that they can release, which helps to preserve market equilibrium by holding the supply somewhat constant.

Externalities

When a good is associated with an externality, consumption of the good can affect others in some way not mediated by price. When my consumption of the good can positively affect someone else, this is a positive externality. For example, if I choose to get a vaccination, other people are likely to be positively affected because I am less likely to contract a disease, which could potentially be spread to them. Negative externalities are the opposite: my consumption can negatively affect someone else.

One potential negative externality associated with subscription pornography is the impact of young children consuming adult content. The majority of pornography centers around male pleasure and heterosexual dominant content where sex workers are forced to portray traditional gender roles in which women are subjugated and dominated for male pleasure. One study finds that around 79% of children surveyed have been exposed to violent pornography, and around 33% of children have sought out this violent porn themselves. When impressionable young people under the age of 18 view this content, they tend to internalize this misogynistic behavior and believe that male pleasure truly is more important. The study shows that around 50% of the students surveyed believed that women enjoy sex that involves violence, including choking. This can result in these people upholding traditional gender roles and oppressing women in their personal lives, which directly negatively affects these women.

However, there are certainly possible positive externalities associated with subscription pornography. For example, when many people consume pornography, it can have the effect of destigmatizing sex. One reason why the stigmatization of sex is extremely harmful is because it leads to a lack of education surrounding it. Studies have shown that rates of sexually transmitted diseases and unwanted pregnancies are much higher in places where sex education is limited due to this taboo. If the consumption of porn and sexual content in general is normalized, this can benefit even those who do not consume it because they have access to more education.

In order to relieve some of the effects of negative externalities, Coase proposes private contracting, where firms can pay a fee in order to continue harming people through negative externalities. In the case of subscription pornography, it is extremely unlikely that sex workers will be willing to pay an extra fee to every single person harmed in order to stop the harmful effects of people consuming their content. So, the market is unlikely to be able to “solve” these negative externalities in this way.

Pareto and Welfare

Even though the consumption of subscription pornography may have some adverse effects (such as the patriarchal aspects of consuming pornography as discussed in the previous section), this kind of pornography itself should not be labeled an objective good or an objective bad. An objective good is something that people should be forced to consume even if they do not want to. It seems obvious as to why this should not be the case for pornography. For example, people who have experienced sexual assault or other forms of sexual trauma may have extreme negative emotions while watching pornography, and it would be an obvious detriment to them if they were forced to watch this content. The reason why pornography is not an objective bad, however, is harder to prove.

An “objective bad” here implies that people should be prevented from consuming pornography at all. However, if there exists a case in which someone is better off as a result of consuming pornography, we have evidence to suggest that they should have the option to do so. A study conducted by Personal Relationships shows that heterosexual women who watched nonviolent pornography with their partners reported increased levels of sexual satisfaction, which they viewed as a net good.

However, some call for paternalistic intervention – that is, potentially restricting some people from watching pornography. This could take the form of banning pornography addicts or sexists from watching pornography, or even banning it altogether. I believe that banning pornography completely would further reinforce purity culture, which would lead to an increased stigma regarding sex. On top of this, while restricting addicts would likely result in them watching less pornography, this is hard to enforce without extreme violations of personal security. In practice, people’s VPNs would have to be disabled, certain IP addresses would have to be saved in a database and would overall lead to privacy violations, which I find to be an objective bad.

Conclusion

Because of the violations of rationality and the supply-demand models mentioned above, I believe that the market option for subscription pornography may not necessarily be efficient. If consumers behave “irrationally” or have cyclic preferences that fluctuate often, the market may not be able to capture this complex phenomena and thus, may not be able to reach equilibrium quickly (or at all). As for externalities, there are clear positives and negatives associated with pornography, but overall I claim that it does not constitute an objective bad. Further, I claim that the market is likely unable to fix these negative externalities because it would be extremely difficult to use something like Coase’s theorem to ameliorate the feelings of those affected. This is just because there are likely millions of people who have been somehow negatively impacted by pornography. Overall in this section, I claim that the market solution for subscription pornography is likely inefficient because of its potential inability to fix externalities, fit with the supply and demand assumptions, and reach equilibrium.

Property Rights and Freedom

Property Rights

Traditional philosophers concerned with property rights such as Locke and Nozick have struggled to define what truly consists of being one’s property as it comes to co-owned or unowned possessions. In the case of subscription pornography, there is little doubt as to who owns the good: there are two parties involved when we think of a right to property here, sex workers (the producers of the good) and the platform (the distributors of the good, like OnlyFans). In this case, sex workers can release their content on the platform at their leisure, and they own all of this content. However, in exchange for being allowed to use the platform to distribute their content, they do relinquish some rights such as the right to receive all of the income generated by the distribution of their goods. In the case of OnlyFans, 20% of all income they make from consumers of their content is taken by OnlyFans while the remaining 80% is theirs to keep. On top of this, creators must obey certain rules in the OnlyFans Terms of Service (they cannot engage in discriminatory action, they must own the content they release, etc.). Otherwise, the platform reserves the right to ban the creator and all of their content.

I believe, however, that the sole and complete owner of the content should always belong to the producers of the content themselves, rather than the distributor. However, under a capitalist system, the current scheme is mutually beneficial. The distributor can turn a profit from taking a cut of the producers’ earnings, and the sex workers can publish their work on a popular website and earn more money through the traction their content garners. At this point, the market solution may be a better fit for this good because of this mutual beneficence. The non-market solution would not be a good fit under our pre-existent system because sex workers would not be able to market themselves on as wide of a scale and thus, be unable to make as much profit as they can now.

Both the producer of the good and the distributor should be allowed to block certain consumers from the platform. If the creator does not want certain people to see their videos (due to privacy concerns, for example), they should be allowed to block them. OnlyFans allows blocking potential users of the site, as well as allows creators to block entire states or areas of the world from viewing their content. The distributor should be allowed to ban users when they are being discriminatory or otherwise breaking their terms of service, which almost every distributor of this kind reserves the right to do. On top of this, I argue that the producer and the distributor should be mandated to block consumers who express discriminatory behaviors from the site. This is because the association between hate speech or sexist language and pornography is dangerous — it serves to further stigmatize sex and sex workers, as well as acts as a dog whistle for other bigots to join the site, which is an objective bad.

While the owner of the content distributed is the sex worker, consumers do have some rights to the content if they subscribe (such as being allowed to view and sometimes save videos). However, OnlyFans’ Terms of Service states that “You must not reproduce, distribute, modify, create derivative works of, publicly display, publicly perform, republish, download, store, or transmit any of the material on the Website, except…for your own personal, non-commercial use and not for further reproduction, publication, or distribution.” So consumers are legally barred from redistributing or reselling content. There is a justification for this: if person A subscribes for $2, and distributes all of that month’s content to their friends B, C, and D, the creator of the content “loses” $6/month (assuming that B, C, D would have paid for the content themselves if they had not found a way to view it for free). In this case, it might be beneficial for the government to be more proactive in finding people who might reupload or distribute this content and take legal action, which is in line with my market solution involving governments incentivizing distributors to ban consumers who violate their terms of service.

Satz proposes a major concern for selling kidneys (and anything else that is currently illegal to sell in the free market) in The Moral Limits of Markets: weak agency, which is the idea that decision-makers may be unsure of what exactly it is that they are selling or buying. In the case of kidneys, people may not really be aware of the possible medical risks or toll on their body that selling their kidney will incur, so people’s preferences may be different based on whether they have received enough education on the possible risks. Without any form of education or way to take care of this weak agency, vendors are at high risk of regretting their choice to sell, and due to this, may cause a restriction of their freedom in the future. There are two major cases of weak agency leading to a decrease in freedom in the online pornography industry: cyber-sex trafficking and losing control of media produced.

In 2020, Pornhub was sued by 40 women for cyber-sex trafficking. The lawsuit states that a smaller company who worked with Pornhub, Girls Do Porn, advertised that they were looking for models. However, when women arrived for their interviews, they were told that they would actually be participating in a pornographic video. They were also told that this video would not be available online and would only be released for a distant market, but in reality, would be released for a North American online market. This is a clear example of weak agency leading to restricted freedom: if the women involved were told about their job and where the videos would be published, they would have all the information necessary to decide whether to participate. However, this predatory means of creating videos restricted womens’ freedom to decide where or whether to publish pornographic material of themselves.

The other major case has to do with contractual agreements that sex workers sign with companies before they begin to produce any media. Sex worker Mia Khalifa says that she has found it extremely hard to find jobs after quitting the porn industry because of the contract she signed. The contract specifies that the company has the right to use her name as they choose, and that they are free to take all the money that comes from people watching her videos, even after she leaves the company. Now, years after she quit the industry, the company still refuses to take her name off of her videos, which directly impacts her ability to find a job. This is a clear example of weak agency: Khalifa states that she was young when she signed the contract, and that it was not explained properly to her. Clearly, she would have benefited from more information about the nature of her contract, and due to this, faces a restriction in her freedom to find work.

Freedom and Opportunity

There is a sense in which making subscription pornography available for sale on the free market would increase both the consumer’s and the producer’s opportunity. For the consumer, it allows for the opportunity to satisfy their preferences to engage with a kind of pornography that emphasizes a greater sense of intimacy with the producer. For the producer, being allowed to sell their content obviously provides them with more opportunities by allowing them to profit off of their work. They also have the opportunity to become more widely recognized (if fame or recognition is a goal for them, for example) through selling their work — there have been cases of models and celebrities who get “discovered” from their work in pornography. There is also a sense in which making subscription pornography available for sale may decrease someone’s opportunities aside from the earlier example mentioned about people who may want to live in a society without pornography. There are many cases in which the producer of the pornography is forced into the field. Clearly, if people are being trafficked and banned from leaving their jobs, or cutting ties with an abusive pornography company, their opportunities are limited — they do not have freedom over their past work, and may not be able to find another job due to the contract. However, making subscription pornography available for sale does provide an opportunity for an “experiment in the good life,” because people may realize that this line of work is truly what makes them happy. With subscription pornography, there are many possible benefits: people can work for themselves without the constrictive influence of a boss, and they can interact with viewers which workers may find fulfilling. So, if people are allowed to work in the industry, they might find that sex work is a fulfilling career, which implies that we should encourage the market solution rather than the non-market solution of banning pornography.

Conclusion

With respect to property rights, I have concluded that the market solution is the best way, under a capitalist system, to preserve the rights and mutual benefits of the producer-distributor model of subscription pornography. This section also lends credence to the government intervention involved in my non-market solution: people should lose their rights to subscribing to this kind of pornography if they engage in hate speech or otherwise associate the sex workers’ careers with this kind of language or action. As for freedom, pornography in general can clearly lead to situations in which individuals face a severe lack of freedom, as in the cases of sex trafficking and inability to find jobs. However, in both of these cases, the responsibility of uncovering sex trafficking and preventing discrimination in regards to denial of employment seems to fall on the government. The government should both incentivize distributors to perform thorough background checks on sex workers in order to make sure they are not being trafficked, which can be done through fining the platform if a sex worker on the site is found to be a victim of trafficking. The government should also enact laws to prevent denials of employment on the grounds that the person seeking a job was a sex worker. If these regulations are put into place, the market solution still seems like a better option for subscription pornography because it provides opportunities for sex workers to earn a living, while the non-market solution does not provide any opportunities for sex workers.

Information

There is a lot of information about online sex work that is distributed across different people rather than consolidated by a central planner. One clear piece of information is how much people are willing to pay for the services provided by the sex worker. This information includes more subtle pieces, such as the personal preferences of the people consuming the content. If the individual is comfortable with pornography on their transaction history, this may imply that they are single or that their partner is comfortable with them watching pornography. This also includes information about how much the consumer is willing to spend on the media produced by one sex worker over another. This has to do with the individual’s personal preferences for the content: perhaps one producer creates more personalized content than another and the consumer prefers personalized content. This could very well mean that the consumer would pay more for the former sex worker’s content than the latter’s. All of this information is captured by the market, which may imply that the market method may be a good way of aggregating a lot of information related to subscription pornography. As for the producer, there is a lot of information left to the individual regarding how comfortable they are with making pornographic content, and what their boundaries and limits are for the videos they choose to make. There is also information that does not have to do with the producer or consumer themselves, but with the advertising algorithm that allows sex workers to be discovered by the public. If a sex worker is easily able to gain a lot of subscribers, this might have to do with the fact that search engines are pushing this worker’s content, which is also important information that other workers can use to optimize their hit rate. For example, if a sex worker gets popular by making videos on social media, they might gain an influx of subscribers, which is not captured solely by the price that the consumers are willing to pay.

There are possible asymmetries of information regarding subscription pornography. One example of asymmetry that the buyer has while the seller does not is knowledge of individual preferences that people have when it comes to pornography. The buyer may prefer to view things that the user is not comfortable with sharing, which may cause the buyer to unsubscribe. A more prevalent issue has to do with the reverse case: when the seller has more information than the buyer. When a buyer subscribes to a sex worker on a site like OnlyFans, the buyer usually has no way of knowing what pictures or videos that the seller has posted, since the content is all behind a paywall. There have been cases where the seller posts less explicit content than the buyer expected, most famously in the case of celebrity Bella Thorne. Bella Thorne joined OnlyFans and locked her content behind a paywall, as most creators on the site do. The people who subscribed to her page assumed that they would be able to view pictures of her completely nude, but the page was filled only with pictures of her in lingerie or bikinis, which fueled outrage because of the high price of the subscription. OnlyFans also has a PPV (Pay Per View) system, with which subscribers can make specific requests and can pay extra for this content. Thorne charged $200 for a PPV photo of herself where she would be “no clothes naked,” but when the subscriber received the photo, it was yet another bikini picture. Here, Bella Thorne clearly had more information about what she would sell to the buyer than the buyer did, which constitutes an asymmetry of information. There are also similar cases where OnlyFans creators have locked already available content behind their paywall instead of new content — imagine a model locking pictures that they have already posted on their Instagram behind a paywall, when buyers assumed that they would be able to view exclusive content. This would definitely cause a problem for an open market solution because sellers are incentivized to ‘scam’ their buyers, since they have no way of knowing what is behind the paywall and sellers would likely rather prefer doing less work (posting pre-existing photos rather than taking new ones) for the same amount of subscriptions. There are possible free market solutions. One would be allowing buyers to see a previous month’s content for free before they subscribe. This way, they can make a more informed decision about whether the next month’s content will be full of pre-existing content or not, as well as whether the creator is comfortable with full nudity. If the seller is not comfortable with this, there is also the option of having OnlyFans perform routine inspections on the seller’s content, where the inspector provides a description that can be shown to potential subscribers. However, one issue could be that OnlyFans may not provide accurate descriptions, because they are disincentivized to turn away potential buyers since OnlyFans takes a percentage of the subscription fee. This is another case where government intervention would be helpful: the government can again incentivize OnlyFans or the sex workers to be honest in their marketing of their content, and can fine those involved if they violate the claims they made in this marketing. If this regulation were put in place, the market solution would offset this information asymmetry and be a good option.

Conclusion

In this paper I’ve argued that my proposed market solution of subscription pornography is much better than the non-market strategy of simply banning all subscription pornography. My market solution consists of a few key parts. First, consumers should be allowed to buy subscriptions on the open market, and sex workers should be able to sell them. If sex workers would like to work with a distributor such as OnlyFans, the distributor should be allowed to take a small percentage of the sex worker’s earnings in exchange for the workers being able to sell on the distributor’s site. However, the sex workers should own their content in its entirety. This way, the property rights of both the sex workers’ right to their content, and the distributors’ rights to their website or hosting platform are both preserved and protected. Through this system, we can also ensure that people who want to pursue sex work have an opportunity to do so. Through the market system, there are also ways in which information can be aggregated efficiently, such as looking at which sex workers the subscribers will interact with, and which platform they choose to view the content on. The non-market solution, on the other hand, provides no opportunity for sex workers, and no property rights over the content that sex workers produce (simply because they are not allowed to produce it).

The second part of the non-market solution is the fact that there must be government regulations and incentives in place. Sex workers should not be allowed to post revenge porn, they must have safe working conditions, they must be over 18, and they must advertise their content accurately. In order to ensure all of this, the government must incentivize the distributors to perform thorough inspections of the content and workers associated with their platforms — if a violation is found, the distributors will be fined and the appropriate legal action should take place. This serves to offset some of the negative externalities and information asymmetry that can come from the subscription pornography industry. While the non-market solution may be able to eliminate some negative externalities, such as possible pornography addictions, it might still be unable to eliminate the possibility of sex trafficking, as a black market for pornography is always possible and has been found in countries where pornography is banned.

While the market solution prevails for the aforementioned considerations, it may be lacking in its ability to reach an equilibrium quickly. This is because of the various possible violations of the supply and demand curves, as well as violations of the rationality assumptions. However, it is not clear that the non-market solution is better to offset these concerns either, because again, in the case of a black market the same concerns arise. Through this analysis, my market solution for subscription pornography has been shown to be the better option, and the further restrictions I have outlined should be utilized in order to better the existing market.