Fan-funding service Passes has officially unveiled an agreement to acquire self-described “subscription social media platform” Fanhouse. However, a number of creators are expressing their disapproval, and Passes’ founder opted “to unequivocally acknowledge and apologize for how the” deal was announced.
The acquisition came to light (described initially as a “merger”) in a series of tweets from Fanhouse. While not a musician-dominated platform, Fanhouse does count as users acts including The Chainsmokers, who backed the startup via their Mantis VC in May of 2021. Parcast founder Max Cutler likewise joined this seed round, and Fanhouse then announced a $20 million a16z-led Series A about one year later.
Meanwhile, the seemingly similar Passes bills itself as “a brand friendly platform with more features than anyone else in the industry.” Both it and Fanhouse prohibit nudity, and the creators featured on the homepage of the invitation-only Passes include a magician, artist Annie Shred, and an astrologer, to name some.
Also worth noting is that Passes late last week announced it had secured $9 million in seed funding from Multicoin Capital and others. Though the involved entities haven’t revealed the Fanhouse buyout’s specifics – including the sale price and how many Fanhouse employees will remain aboard post-deal – they did indicate that “all creators will be offered a seamless transition over to their personalized Passes page.”
“Fanhouse will keep running during this transition and for a period after,” Fanhouse continued on Twitter. “All creators have to do is login to Passes with their Fanhouse info and their page will already be set up and ready to go (with a ~95-5 split!). (And did we mention all *fans* also get Passes accounts, keeping their active subscriptions and unlocked posts?)”
As highlighted at the outset, however, several creators are making clear that they’re less than thrilled with the news and the prospect of pivoting to Passes. Their concerns and complaints – to which Passes CEO Lucy Guo has in most instances personally responded on Twitter, it bears noting – extend to the transition of posts to Passes, the platform’s current lack of an app, and its use of artificial intelligence.
All posts will transfer, an app is in development (“in the meantime, we’ve found sms notifications convert better”), and Passes utilizes AI to scan for prohibited content and (if creators opt in) offer auto-generated media to followers, according to Guo (who also co-founded Scale AI) as well as an FAQ.
“I’ve spent [the] past day reading comments and talking directly with creators – I want to unequivocally acknowledge and apologize for how the Fanhouse x Passes merger was announced,” Guo wrote in a different tweet yet.
“We found out The Information (a tech based news publication) was going to leak the story last night and wanted the community to hear it directly from us,” she proceeded, subsequently indicating that she’d been “approached by FanHouse with the proposition of acquiring” the business. “We had just a few minutes from when they planned on publishing so everything was extremely rushed.”
Needless to say, it’ll be interesting to keep an eye on the music industry presence of Passes – which, besides subscriptions, paywall content, and livestreams, supports “pay-per-minute 1 on 1 calls” – moving forward.
Multiple companies are working to capitalize upon the dedication of superfans, and BTS agency Hybe has already made significant headway on this front with its Weverse social platform. Last week, Twitter began making payments under its Creator Ads Revenue Sharing program, with a broader rollout set to arrive later in July.