Fanhouse, a renowned creator monetization platform, recently made headlines with its acquisition by Passes, a similar startup that entered the market in beta just last December. The deal, which was finalized within a short timeframe, has sparked mixed reactions among Fanhouse’s founders and creators.

Lucy Guo, the founder of Passes, revealed that the acquisition happened swiftly, with the deal being closed just 24 hours after an initial call. While the terms of the agreement were not disclosed, it is worth noting that Fanhouse has an established presence in the industry, having raised $20 million in a Series A funding round led by Andreessen Horowitz in 2022. In contrast, Passes raised a $9 million seed round led by Multicoin Capital, a crypto-focused fund.

Currently, Passes is in its beta phase and collaborates with around 40 creators. However, not all of Fanhouse’s founders were fully on board with the acquisition. Rosie Nguyen, also known as @jasminericegirl, announced her departure from the company just hours before news of the deal broke.

In a tweet, Nguyen explained her decision, stating that she wanted to align herself with a platform that better reflects her values and supports creators in a manner she finds appropriate. She clarified that she did not benefit financially from the acquisition and left the company without severance or an exit package.

The sudden changes at Fanhouse raised concerns among creators, particularly regarding Passes’ approach to content moderation. A tweet by Lucy Guo, mentioning Passes’ work on technology that could potentially generate AI likenesses of creators, fueled apprehension. Twitch streamer Riley Rose highlighted the fact that Passes does not currently have content guidelines on its website.

In response, Guo assured the community that Passes does have content guidelines in place, albeit more relaxed than Fanhouse’s due to the platform’s different payment processing system. Nevertheless, content guidelines serve not only to define what creators can and cannot post but also to protect users from harassment, hate speech, and other harmful behaviors.

Passes differentiates itself by providing creators with a built-in customer relationship management (CRM) system, allowing them to personalize their content for their most dedicated fans. Guo claimed that Passes has been successful in attracting creators from various platforms, doubling their income at a minimum. However, Nguyen emphasized that income is not the sole determining factor for creators when choosing a platform. Safety, support, and a sense of being valued are equally crucial considerations.

The merger of creator economy companies involves not only combining assets but also ensuring a smooth transition for creators who rely on these platforms to sustain their livelihoods. When startups face pressure to expand rapidly, there is a risk that the growth may come at the expense of creators, whose businesses often thrive through sustainable and gradual development. While Guo assured creators that Passes has their best interests at heart, Nguyen expressed skepticism, underscoring the challenges that arise when the incentives of investors do not align with the needs of creators.

Fanhouse creators now face the decision of whether to continue producing content on Passes. In the coming weeks, creator and fan accounts that have opted in will be transferred to Passes, enabling users to access the platform using their existing login credentials. Passes aims to facilitate the transition by offering creators a 95% revenue share for the first six months, which will then decrease to the industry-standard 90%, matching Fanhouse’s rate.

As the creator economy continues to evolve, it is crucial for platforms to address the concerns of creators and prioritize their well-being. A platform’s success is ultimately tied to the success and satisfaction of its creators, and only by fostering a supportive and inclusive environment can companies thrive in this rapidly expanding industry.

Categorized in: