Patreon is how thousands of artists, caretakers, musicians, podcasters and other creators live. The six-year-old startup currently supports more than 100,000 creators, who receive recurring donations from over 3 million followers, and have become the hub of a growing ecosystem to support online creators. However, with new competition from YouTube and Facebook, the company continues to win profits while trying not to alienate its users.
In order to give Patreon a steady shot at survival, the company is planning a fundamental change in the platform. In May, the site's campaign system will split into three levels: a single version called "Patreon Lite"; a "Patreon Pro" plan similar to the existing service; and a more expensive alternative called "Patreon Premium."
It can mean a price increase for many new users. Patreon Lite takes the same financial cut as Patreon's existing service: a flat 5 percent fee, plus the cost of payment processing. Pro and Premium are more expensive: Pro has an 8 percent commission, and Premium has a 12 percent one, with a minimum charge of $ 300 per month. However, it is important that these changes do not apply to existing users. People who started using Patreon before the split – a group of Patreon refers to as "founders" – are automatically enrolled in Pro with their old 5 percent rate. Neither will they be affected by a new way of calculating payment processing fees, even though they may choose to choose that system.
Patreon Pro contains all the features Patreon has now, plus a few new options. Members can attend workshops with successful creators, and it is a new tool to offer limited time-back bonuses, launched in beta last year. CEO Jack Conte refers to Pro as Patreon's flagship product, and that's what people who liked the old Patreon model will probably want.
Lite gives Patreon's basic service: Creators can launch a campaign with a website on Patreon's website and backers can make repeated donations. But creators can't set up lifting levels with special benefits, and they won't get features like sophisticated analytics. Conte says about 20 percent of users are already ignoring the levels. "They just want to quickly set up something," he says. It's a bit more like the informal "tip jar" platform Ko-Fi, which supports monthly donations, but without the complex system.
The premium level, on the other hand, gives the users a close relationship with Patreon. It is designed for larger campaigns. It would take $ 2,500 a month in promises to get a 12 percent commission reaching Premium's minimum fee, or over $ 3,000 for founders, who can get a cheaper 9 percent interest rate. Premium subscribers will have access to a shipping goods system as well as a dedicated manager who can work with their campaign. A handful of creators already have leaders, but Patreon scales the option, though it still limits the number of premium subscriptions. "There is a person who works with you full time and it is very expensive," says Conte.
Conte says Patreon adapts to better serve a wide spread of the needs of different creators. "We literally have creators as a painter with 50 patrons," he says, "and they use the same product as a media company with 40 employees who use membership to fund their business, and we serve none of them." Patreon's creators make less than $ 500 a month. According to the Graphtreon tracking service, only 9,200 users today are more. Many use Patreon to get a few bucks from fans for things they would do, anyway, for example, making YouTube videos or posting art online. But some promotions rake in big pay days: podcast Chapo Trap House for example, amounts to over $ 122,600 each month.
The new levels will reflect this inequality. Conte says that Patreon cannot scale a one-size-fits-all service to include things that big or medium-sized creators really want, such as merchandise management and full-time support. This system, he says, gives a "really healthy course" to profitability without making Patreon inaccessible to minor operations. He claims that Patreon has discovered the levels of a large group of creators to ensure they are acceptable. But these changes still roll out conservatively – and for good reason.
Patreon is one of the best known options for online advertising, sponsored branding deals, and relying on the whims of a particular social media service. So far, much of the setback that has engulfed other web platforms has escaped. In addition to user landing pages and a small Snapchat-like app for creators, there is relatively little content to worry about moderation. A few companies have been acquired, including e-commerce startup kits, which are likely to operate their merch service. But instead of aiming to build a juggernaut that can raise antitrust problems, it is focused on integrating with other companies' platforms, including the chat service Discord and the game store front Itch.io.
Nevertheless, many smaller creators are nervous that Patreon will be less inviting as it becomes more profitable, and it has led to controversy in the past. In 2017, the company made a catastrophic attempt to streamline the payment processing system by releasing process costs to the beneficiaries. The system offered legitimate benefits, but it also punished backers with surprise fees that seemed disproportionately high if they only donated $ 1 or $ 2. Patreon reversed the decision during the big protest and apologized.
This time, it tries to avoid forcing change on long-term users. Patreon introduces a new payment processing fee system in May and changes a more hesitant rate that Patreon has previously said ranges from 2 to 10 percent. But unlike the previous proposal, it does not ask the beneficiaries to pay these costs. And the prices are meant to accommodate small donations, which are an important source of income for lesser-known creators. Commitments of more than $ 3 will incur a 2.9 percent charge, plus 30 cents per promise. Everything lower is treated with a 5 percent charge, plus 10 cents. For example, a $ 3 promise will lose about 25 cents, instead of at least 30 with the larger flat fee.
Conte claims that about one-third of Patreon's creators would pay less under the new model. But "we should not force anyone to adopt anything," he says. "It's 100 percent opt-in, no changes, for founders."
The new service levels will still probably draw some criticism, judging by the answer to a January CNBC interview where Conte hinted at the changes. A versatile called tweet thread by the YouTube video player Dan Olson claimed that Patreon's single-tier business model should be easy to scale, as it does not require huge data server resources or even much content stuff. Olson suggested that investors forced Patreon to add unwanted features to grow faster, and the basic user experience would suffer.
Conte called the thread "deceptive" and says it ignores the work that Patreon does behind the scenes on his simple site. According to Conte, most of Patreon's expenses come from paying around 170 employees, many of whom work with creators or Patreon's business partners – not in roles as engineering work where a person can build a massively scalable system. "Many members enter and say," What about this? How can I do this? I want to change my things here, and we will guide them through that process, he says. "We are not a fully automated system."
A handful of people have suggested undermining Patreon with alternative services, mainly because they are critical of Patreon to ban long-term users. (The company has an anti-hatch or affiliate policy and that of the creators on all platforms.) In January, self-help guru Jordan Peterson protested such a ban by deleting his account – once beating $ 80,000 monthly – and promising to Help build a competing crowdfunding site. That platform is apparently under construction, but it has not yet launched.
"I hope it works, because I think competition is good for creators," says Conte about attempts at a Patreon alternative. "But it's a very difficult thing to do. So from Patreon's perspective and from a landscape perspective, I'm not worried about it."
He also believes that Patreon can survive competition from big corporations like Facebook, who began to roll released their Patreon-like Fan Subscriptions last month. Fan subscriptions were rejected to reserve a license of any kind created by users, as well as the right to a 30 percent revenue reduction. But Conte claims that even on better terms, Facebook's subscription approach will be broken.
"If you look at the companies they acquire and what they do, they are like – go for massive scale and they should not scale one customer support team and a success organization organizer, and have creator careers and respond to support tickets from fans, they do not think that way, he says. "The conditions published that people tore are a symptom of lack of respect and lack of understanding for and for creators. I think it's a profound cultural issue that Facebook is unlikely to fix. "
Conte points to Facebook's story of making sudden changes as content looks in its news feed, which breaks the entire media business and emphasizes lacking in relying on a large content platform." It's such a negative signal to send to professional markets, "He says." Creators feel so hard. They're scared. They are afraid that Patreon will do something like that. "
It is a belief that Patreon wants to avoid at all costs." We have done a year's worth and talked to creators and showed them this in advance, "Conte says." We go beyond to make sure people know that we get feedback or talk to them – we take care of them, we do justice to our current creators. "