In a recent video titled "ChatGPT's Adult Content Gamble: The Hidden Economics," pricing strategist Akhil from Monetizely provides a comprehensive analysis of what OpenAI's rumored move to allow adult content would mean from a business perspective. Rather than focusing on moral implications, Akhil examines the strategic pricing considerations that would be necessary to make such a move financially viable.
Beyond Morality: The Business Economics of High-Risk AI Content
While most discussions about OpenAI potentially opening ChatGPT to adult content center on ethical concerns, the economic implications are equally significant. As Akhil points out, "As a pricing strategist, I am looking at risk adjusted unit economics, channel constraints, and how you package value without blowing up your margins or your brand."
This isn't just about flipping a switch and allowing new content types. The fundamental economics of serving adult content differ dramatically from standard AI operations.
Why Flat Pricing Would Fail
The core insight Akhil presents is that treating all AI content generation as equal from a pricing perspective ignores the vastly different cost structures involved in higher-risk categories.
"The cost to serve adult content is structurally different," he explains. "You are dealing with stricter moderation and appeals, higher legal exposure, more disputes and tighter rules from app stores and payment networks. Flat pricing ignores variable risk, and that's a fast path to negative margins."
This analysis applies not just to adult content but to any high-risk or regulated category in the AI space, including healthcare, finance, and youth-facing experiences.
The Three Critical Layers of Risk
According to Akhil, implementing adult content capabilities would require addressing three fundamental layers of complexity:
1. Channel Risk
App stores have strict policies regarding adult content. Akhil notes, "Apple's App Store and Google Play are clear. Pornographic content is not allowed." This creates a channel constraint that forces a multi-platform approach:
"Your iOS and Android SKUs may need to be safe default only, while the web becomes your adult-capable channel. That's a packaging decision before it's a moral one."
2. Payment Rails
The financial infrastructure behind adult content comes with additional requirements and scrutiny:
"Card networks and processors have enhanced standards for adult businesses. You will see heightened KYC, content verification expectations, higher chargeback scrutiny and sometimes fewer processor choices."
Akhil references the OnlyFans situation, where payment partner pressure nearly forced a business model change, highlighting how payment infrastructure can constrain business decisions.
3. Compliance Requirements
Legal and regulatory requirements add another layer of complexity:
"In some regions, age verification is required by adult sites. In the UK, the online safety regime pushes platforms toward stronger protections. Various US states have passed age-gating laws, and enforcement risk is rising."
These compliance measures translate directly to higher operating costs through "vendor fees, workflows, and user friction" – costs that must be recovered through pricing.
Crafting a Risk-Adjusted Pricing Strategy
Based on these challenges, Akhil outlines a five-part strategy for pricing high-risk AI content:
1. Risk-Adjusted Pricing
"Not all tokens are equal," Akhil states, suggesting a separate price fence for high-risk content. This could take the form of "a higher per-token rate, a credits multiplier, or a metered surcharge" for adult-flagged generations.
The key insight: "You are not just charging for compute, you are pricing in moderation, dispute handling and legal exposure."
2. Channel-Based SKU Segmentation
Akhil recommends maintaining a "safe default flagship" for app stores and enterprise procurement, while creating a "web only adult pro entitlement gated by strong agent identity checks."
This approach reduces brand dilution while enabling new revenue streams. For OpenAI specifically, he suggests considering a sub-brand to "insulate ChatGPT's core trust halo."
3. Compliance-Based Value-Added Features
Rather than presenting compliance as a cost center, Akhil suggests building it into the value proposition:
"Age verification, geo controls, and audit table logging for creators. If you enable image or video generation, offer a higher tier with watermarking or provenance controls to de-risk downstream misuse."
The strategy makes sense: "Make those features part of a premium compliance bundle so the customers who create the risk help fund the controls."
4. Strategic Payment Processing
Adult content requires specialized payment processing considerations:
"Some mainstream processors won't support this category at scale. Consider adult friendly gateways and expect higher dispute reserves. Price this IN."
To stabilize cash flow, Akhil suggests "annual prepaid discounts on web" to offset processor friction.
5. Regional Packaging
Given varying regional regulations, Akhil advises against blanket global offerings:
"Offer features only where you can actually comply. Use entitlements to geofence access and make the commercial terms explicit. Price, availability, and data retention vary by jurisdiction."
The Psychology of Risk-Based Pricing
Beyond the economics, Akhil emphasizes the importance of customer perception:
"You need to de-risk perception while monetizing value. That means decoupling. A safe default plan maintains simplicity for mainstream users. The adult capable plan introduces friction by design."
This intentional friction serves multiple purposes: it "signals seriousness, filters impulse misuse, and justifies a price uplift" while creating "a price fence anchored on compliance, not on morality."
Implementation Roadmap
Akhil provides a detailed 10-step implementation plan for companies considering similar high-risk content strategies:
- Define a clear content taxonomy with auto-flagging thresholds
- Model cost-to-serve by content type, moderation needs, dispute rates, and fees
- Run payment processor due diligence
- Separate channels between app stores (safe) and web (additional features)
- Integrate age verification vendors
- Design risk-adjusted metering
- Build compliance bundles with features like watermarking
- Add regional entitlements and geofencing
- Update terms and controls for enterprise
- Implement metrics tracking
The Bottom Line
Akhil concludes with this crucial warning: "If you enable high-risk content, price the risk, separate the channels, and bundle compliance as value. Otherwise, you will get squeezed, blocked in app stores, cut off by web processors, and underwater on support costs."
The message is clear - whether it's adult content or other high-risk AI applications, success depends on aligning pricing with the true economics of risk. Companies that fail to account for these factors may find their margins disappearing quickly under the weight of compliance costs, moderation requirements, and payment processing complications.
For AI companies contemplating expansion into regulated or high-risk categories, Akhil's framework offers a valuable roadmap for sustainable growth through strategic pricing and packaging.