Patreon is how thousands of artists, vloggers, musicians, podcasters and other creators make a living. The six-year-old startup currently supports more than 100,000 creators, who receive recurring donations from more than 3 million supporters, and has become the center of a growing ecosystem to support online creators. But, faced with the new YouTube and Facebook competition, the company is still working to make a profit while trying not to alienate its users.
To give Patreon a more stable chance of survival, the company is planning a fundamental change in its platform. In May, the site's campaign system will be divided into three levels: a simple version called "Patreon Lite"; a "Patreon Pro" plan that is similar to the existing service; and a more expensive option called "Patreon Premium".
That could mean a price increase for many new users. Patreon Lite takes the same financial cut as Patreon's existing service: a fixed fee of 5 percent, plus the cost of processing payments. Pro and Premium are more expensive: Pro has a commission of 8 percent and Premium has a 12 percent, with a minimum fee of $ 300 per month. However, it is important that these changes do not apply to existing users. People who started using Patreon before the division (a group that Patreon refers to as "founding creators") will automatically enroll in Pro at their previous 5 percent rate. Nor will they be affected by a new way of calculating payment processing fees, although they may choose to opt for that system.
Patreon Pro includes all the features that Patreon has now, plus a couple of new options. Members can attend workshops with successful creators, and there is a new tool to offer limited-time back-up bonuses, which was launched in the beta version last year. CEO Jack Conte refers to Pro as Patreon's flagship product, and is the one that people who liked the old model Patreon will probably want.
Lite provides Patreon's basic service: creators can start a campaign with a home page on the Patreon site and sponsors can promise recurring donations. But the creators can not configure levels of commitment with special benefits, and will not obtain characteristics like sophisticated analysis. Conte says that around 20 percent of users already ignore the levels. "They just want to set something up quickly," he says. It is a bit more like the informal "tip tip" platform of Ko-Fi, which allows monthly donations but without the complex system of advantages.
The Premium level, on the other hand, gives users a close relationship with Patreon. It is designed for larger campaigns. It would take $ 2,500 per month in pledges for a 12 percent commission to reach the minimum Premium rate, or more than $ 3,000 for the founding sponsors, who can get a cheaper rate of 9 percent. Premium subscribers will have access to a system for sending merchandise, as well as a dedicated administrator who can work with your campaign. A few creators already have administrators, but Patreon is expanding the option, although it continues to limit the number of Premium subscriptions. "He's a person who is dealing with you full-time, and that's really expensive," says Conte.
Conte says that Patreon is adapting to better serve a wide variety of needs from different creators. "Literally, creators like a painter with 50 clients," he says, "and they're using the same product as a media company with 40 employees who use the membership to finance their operations, and we're not serving none of them. "" The vast majority of the creators of Patreon earn less than $ 500 per month. According to the Graphtreon tracking service, only 9,200 users currently earn more. Many people use Patreon to get a few bucks from fans for the things they would do anyway, like making YouTube videos or posting art online. But some campaigns accumulate huge paydays: the podcast Chapo Trap House for example, earns more than $ 122,600 per month.
The new levels are supposed to reflect that disparity. Conte says that Patreon can not 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 assistance. This system, he says, offers a "really healthy course" towards profitability without making Patreon inaccessible for smaller operations. He states that Patreon has examined the levels with a large group of creators to make sure they are acceptable. But these changes are still being implemented conservatively, and for good reason.
Patreon is one of the best-known alternatives to online advertising, brand sponsorship deals, and relying on the vagaries of a service of specific social networks. So far, it has escaped much of the reaction that has enveloped other web platforms. Beyond the user's landing pages and a small Snapchat application for creators, it hosts relatively little content to worry about moderation. You have acquired some companies, including the eCommerce Starter Kit, which will probably boost your marketing service. But instead of trying to create a set that can generate antitrust concerns, it focuses on integration with the platforms of other companies, including the Discord chat service and the Itch.io gaming store.
Still, many smaller creators are nervous that Patreon will become less welcoming as it becomes more profitable, and that led to a controversy in the past. In 2017, the company made a disastrous attempt to simplify its payment processing system by downloading the processing costs to the sponsors. The system offered legitimate benefits, but it also penalized sponsors with surprise rates that seemed disproportionately high if they only donated $ 1 or $ 2. Patreon reversed the decision in the middle of a loud protest and apologized.
This time, he is trying to avoid forcing the change in long-standing users. Patreon is introducing a new payment processing fee system in May, changing a nebulous rate that Patreon said earlier that ranges from 2 to 10 percent. But unlike the previous proposal, it is not asking sponsors to pay for these costs. And the fees are intended to receive small donations, which are an important source of income for less famous creators. Pledges of more than $ 3 will incur a 2.9 percent charge, plus 30 cents per pledge. Anything lower will be processed with a 5 percent charge, plus 10 cents, so a $ 3 pledge would lose about 25 cents, instead of a minimum of 30 with the largest flat rate.
Conte states that about a third of the creators of Patreon pay less under the new model. But "we're not going to force anyone to adopt anything," he says. "It's 100% opt-in, there are no changes, for the founding creators".
The new levels of service are likely to generate some criticism, judging by the response to an interview in January CNBC where Conte hinted at the changes. A tweet thread widely cited by video maker Dan Olson stated that Patreon's single-level business model should be easy to scale, since it does not require massive data hosting resources or even much content moderation . Olson suggested that investors were forcing Patreon to add unwanted features to grow more quickly, and that basic user experience would be affected.
Conte called the thread "deceptive" and says he ignores the work Patreon does behind the scenes of his simple-looking website. According to Conte, most of Patreon's expenses come from paying his approximately 170 employees, many of whom work with Patreon creators or business partners, not in engineering roles, where a person can build a massively scalable system. "Many members write 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 proposed to undermine Patreon with alternative services, in large part because they criticize Patreon for banning right-wing users (The company has a policy against hate speech or affiliation with groups of I hate, and it applies to the behavior of creators on all platforms.) In January, self-help guru Jordan Peterson protested against one of those bans by eliminating his account, where he once took over. $ 80,000 a month – and promising help build a competitive crowdfunding site This platform is supposedly under construction but has not been launched yet
"I hope it works, because I think competition is good for creators," says Con tell you about an Patreon alternative. "But it's a very difficult thing to do, so from Patreon's perspective and from a landscape perspective, it does not bother me."
He also believes that Patreon can survive the competition of big companies like Facebook, which began rolling out its fan-like Subscriptions to Patreon last month. Fan subscriptions were ridiculed for reserving a license for any art created by users, as well as the right to a 30 percent revenue cut. But Conte argues that even with better conditions, Facebook's approach to subscriptions would be broken.
"If you look at the companies that they acquire, and what they do, they are like: going on a massive scale, and they are not going to scale up a customer support team and a successful organization of creators, and they have representatives of attention to the creator and they respond to fan support tickets, they do not think about the business that way, "he says. "The terms [Fan Subscription] that were published, that people broke into pieces, are a sign of disrespect and lack of understanding of and for the creators. I think that's a deeply rooted cultural problem that Facebook probably can not fix. "
Conte points to Facebook's history of making abrupt changes in which content appears in its News Feed, which is something that caught the attention of media companies and highlighted shortcomings of relying on a large content platform. "That's such a negative signal to send to the professional markets," he says. "Creators feel it so hard, they're scared. They're afraid Patreon will go to do something like that. "
That is a perception that Patreon wants to avoid at all costs. "We have done a year of work, we talked to the creators and we showed them in advance," says Conte. "We go further to make sure that people know that we receive comments or talk to them, we are taking care of them, we are doing the right thing for our current creators."