Time To Pay Attention: Creators On Patreon Now Receive Over $1,000,000 Per Month From Patrons

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The movement has begun. It’s official. Patreon’s model works. Crowdfunding 2.0 is here to stay.

The idea that fans would like to support their favorite creators just for creating, is counterintuitive. People believe that fans will only pay for something if they’re forced to. But no creator on Patreon is forcing anyone to pay them anything. They aren’t even saying that they can’t create unless they reach a set monetary goal (like on Kickstarter). These creators all have one thing in common: they will create with or without the monetary support. And will continue to do it without charging their fans for these creations. These creators were creating long before Patreon existed. But now, they can actually make a bit of money from their fans for doing what they love to do.

+Fans Aren’t Going To Pay For Music Anymore. And That’s OK.

Patreon flies in the face of all conventional thinking. The argument that musicians will only make music if they’re paid for it has been debunked over and over again. And the idea that fans will only pay for something if they are forced to is being debunked on a daily basis by the patrons on Patreon.

Tom Merritt releases 20 podcasts a month. For free. However, over 4,000 of his fans decided they’d like to support him. He makes over $12,000 a month for releasing free podcasts. In his Patreon video he states “I really love the idea… ‘Value for value.’ The idea being, that if you get value from the show, you give that value back in some form. One way could be backing this Patreon.”

“I really love the idea… value for value. The idea being, that if you get value… you give that value back in some form. One way could be backing this Patreon.” Tom Merritt, Podcaster making $12,000 a month on Patreon

The a cappella group, Pentatonix, famous for winning the third season of The Sing Off (and their 6.8 million YouTube subscribers) now make over $15,000 per video they put on YouTube.


In comic book artist Zach Weinersmith’s Patreon video, he exclaims, “But wait you say, ‘why would I give you a dollar a month when I can have the comics for free?’ Well you can consider yourself a patron of the arts!” And over 3,000 people thought that was a cool idea. Weinersmith is making nearly $9,000 a month for creating free comics.

Started by YouTuber, Jack Conte (one half of Pomplamoose), to help his own bottom line, most of the musicians on Patreon are YouTubers. What’s a YouTuber? Well, if you haven’t noticed, there’s a subculture of icons that are famous on YouTube. So famous, they are actually more popular than mainstream celebs among US teens.

+Patreon Just Solve YouTube… And Music

But the problem is, most of them haven’t been making much money from YouTube. Even though YouTube’s Content ID has paid out over $1 billion, most of that seems to end up in the DRM companies’ hands and divvieded up so much that the actual artists creating the most popular monetized content aren’t seeing much of that revenue.

From his millions and millions of views, Conte confessed in his recent interview with USA today “I’d have all these views, but at the end of the month I’d check my (YouTube) ad revenue and I’d get a check for like $6 or $10.”

“I’d have all these views, but at the end of the month I’d check my (YouTube) ad revenue and I’d get a check for like $6 or $10” – Jack Conte, Musician, CEO, Patreon

Patreon has done a great job at bringing in constant creators like YouTubers, podcasters and artists. However, most of these creators have built up their audience through YouTube in one way or another.

Patreon’s biggest challenge has been convincing ‘traditional’ artists that Patreon could be beneficial to them.

Most ‘traditional’, touring musicians who release albums every 2-3 years with sporadic music videos every few months, may not see a use for Patreon. What regular piece of content could they ask their fans to support? Well, why not use Patreon as a fan club? Musicians could invite their existing fans to become an official patron for $1 or $5 a month. They would then get access to exclusive content like unreleased b-sides, acoustic versions, live recordings and patron-only vlogs from the band. They could also interact through the Patreon activity stream where the artist could check in and join in on the conversation.

Once Patreon’s Activity stream is filtered into community forums that encourage engaged conversation (like patron created topics), I see many more patrons viewing Patreon as a community space. Currently, most creators and patrons use Patreon.com solely for the transaction, whereas there is potential for so much more.

Other industries have realized Patreon’s value. Choc Children’s hospital of LA used Patreon to raise money for every Angel’s Baseball win. With 98 wins so far, at about $1300 a win, that’s one nice chunk of change for the children of Choc.

Patreon is just getting started. They launched less than 18 months ago and raised over $15 million in their Series A round earlier this year (following their initial investments of $2.1 million in late 2013). UTA and CAA are among the latest investors in Patreon. Whether they are conspiring to use Patreon in some innovative manner down the line, or are just excited about making lots of money when Patreon inevitably goes public, time will tell. (They’re agents, my money (or should I say their money) is on the latter).

With over 45,000 creators and (now) $1 million a month being earned by these creators, crowdfunding 2.0 has officially arrived.

Ari Herstand is a Los Angeles based singer/songwriter and the creator of the music biz advice blog Ari’s Take. Follow him on Twitter: @aristake

41 Responses

  1. agraham999

    “With over 45,000 creators and (now) $1 million a month being earned by these creators, crowdfunding 2.0 has officially arrived.”

    Has it? $1M per month and over 45,000 creators…works out to what, average of $22 per artist. I know that’s not a fair representation of the numbers, so I’d like to see those numbers broken out a bit more by segment and who is making what. Kicking around, I see an awful lot of people making nothing.

    Don’t get me wrong, I think we need many different revenue streams and I do think that this has a lot of potential for some artists, but it would be helpful before jumping in head first to know which segments and who is doing the best. Looking at stats they published in the past, musicians seem to not appear as highly as podcasters, writers, etc.

    Reply
    • REmi Swierczek

      Agree! Total misunderstanding! Just like 2×2=4 (my humanity check) we need simple Discovery Moment based $100 billion dollar music industry!

      Conversion of Radio and streaming to $100B music store can start tomorrow! There is one condition: MOOCHES, or more precise PIMPS of music like Google, Shazam, Soundhound and few more music and lyric ID services have to become well paid, sparkled in 24K gold cashiers of MUUUSIC!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
      Hey Larry Page, have some respect to musicians and your own greed! Moonshot to $50B YouTube as a hub of $100B+ music industry is WAITING FOR YOU! Grab it!

      Reply
  2. Noah Copeland

    “Well, why not use Patreon as a fan club?”
    I’m curious how this would work. Maybe I’m wrong, but I thought the way Patreon worked was that artists only get paid when the create something, with a monthly cap. If it’s a fan club, what’s the product that is constantly created?

    Reply
    • Ari Herstand
      Ari Herstand

      There are two options on Patreon: Pay per piece of content or pay per month. The podcaster, Tom Merritt doesn’t charge per podcast (because he releases 20 a month) he charges per month. Musicians could do the same.

      Reply
      • agraham999

        Again, what you don’t address is what is the breakdown of musicians to things like podcasters. It feels really good that $1M is spent a year to on average give everyone $22 a month, but where are the actual numbers that show this can support musicians? I get podcasters and illustrators and writers…it makes sense because you want a continuance of that type of content, but a musician?

        If you look at their own breakdown:

        http://www.patreon.com/toolbox?ftyp=stats

        Where are musicians? Under YouTube? I’d like to see actual numbers that more specifically show whether or not musicians work in this model.

        Reply
  3. Anonymous

    “Even though YouTube’s Content ID has paid out over $1 billion, most of that seems to end up in the DRM companies’ hands”

    No, that’s a common misconception.

    Music only accounts for about 40% of YouTube’s traffic, so most of Google’s money goes to non-music channels on YouTube.

    It’s also not true when Google claims that it pays 55% to content owners: 40% of YouTube’s $3.5bn revenue in 2013 was generated by music. That’s $1.4bn. Then Google takes its 45% cut.

    That leaves us with $0.77bn.

    So YouTube should have paid $0.77bn to the music industry in 2013 alone. But it didn’t. Instead it probably paid around $0.4bn (40% of $1bn) over the past 8 years.

    Reply
    • Anonymous

      YouTube may be in trouble because it pays less than anybody else to right holders:

      Now a number of digital platforms are courting its [YouTube’s] top creators with lucrative deals and a more favorable revenue share than the 45 percent that YouTube typically charges. The new entrants have the potential to dramatically alter the landscape for top YouTubers.

      Former Hulu CEO Jason Kilar has raised millions from A-list Silicon Valley backers for Vessel, a stealthy video platform expected to launch this fall as a primarily subscription service for short-form content. Kilar is said to be offering sizable up-front paychecks to YouTube stars who sign up and reportedly is asking advertisers for CPMs (cost per thousand viewers) as high as $50. Meanwhile, a group of seasoned YouTube veterans launched Victorious this summer to develop mobile apps for creators that house exclusive videos, library content and monetization tools. The company already has lured Phan, vlogger Shay Carl and actor Ryan Higa.

      Established players are feeling out the space, too. Facebook has been improving its video player with new products such as a view counter, and has been encouraging YouTube talent to test uploading videos directly to the platform instead of through embeddable links. To wit, YouTube star Ray William Johnson debuted web series Riley Rewind on Facebook in December, giving it a one-day window of exclusivity. Even Yahoo has held meetings with creators about distributing content via its platform, although sources say that those efforts are less developed.

      […]

      many say YouTube has started looking over its shoulder. One digital executive believes that’s the reason for YouTube’s latest funding efforts. “They’re trying to keep people from jumping off the platform,” says this exec. This source says YouTube now will pay as much as $4 million to land hot projects

      […]

      many creators complain about the economics of the site [YouTube], which often has lower CPMs than other video platforms because of the glut of low-quality content

      […]

      Now the entrance of deep-pocketed streaming alternatives could give YouTubers added leverage to window their content — much like movies and TV series are windowed from first-run to pay cable and beyond — or to extract up-front payments and more favorable ad splits. “Previously, YouTube was almost always the first place to go,” says Csathy. “But this fight over exclusivity will increasingly become part of the YouTube economy.””

      SOURCE: Hollywood Reporter today; “YouTube’s War for Talent: How Facebook and Other Are Wooing the Biggest Stars”

      Reply
  4. Anonymous

    As a new artist on the brink of releasing a new album, new website, and developing my own strategy for self promotion, I know I definitely plan on implementing Patreon for my website. Although I am not a consistent content creator, the point in here about using Patreon as a fan club is exciting to me. It goes back to the panel that Amanda Palmer gave a couple years back…moral being, make it easy and give fans the opportunity to support you if they want to. I’ve noticed several Independent artists with this “Donate to Support” feature on their site that seems to be popping up more and more frequently. Whether it’s Patreon or some other type of service, I think it’s brilliant and at the early stages of catching on. I have made a living on tips as a gigging musician for years. Its the same concept of leaving a tip jar out at a gig. Simply, Why not?
    Great article Ari!

    Reply
  5. GGG

    Getting investors is just begging for money on a different scale.

    And/or you can look at Patreon patrons as investors of the arts in a sense.

    Either way, you’re getting angry about a viable (for some) revenue stream. Again, it never ceases to amaze me how many people on this site just refuse to accept making money any other way other than selling an $15 CD.

    Reply
    • Anonymous

      “you can look at Patreon patrons as investors of the arts in a sense”

      Agree — and not only in a sense. They are literally investors.

      Plus, Patreon is a really nice service.

      Reply
    • Justin Mayer

      Bro, I’m not angry…

      Take a step back, breathe for a moment, and put aside your pre conceived notion of who I am…

      No, getting investors in a business is not begging, its who’s interested in taking a swing at making money?

      I get theres this big thing about artists doing the DIY solo thing on going on right now, but I’m not buying it nor am I drinking that koolaid, even tho I DIY a. lot.

      Its shortsighted poor business and unsustainable long term for these artists, and just tossing money awayu for those providing patronage.

      its dumb shit by the same tribesmen circle greeters pushing people who are making a fucking killing on the backend…

      anyways…

      Reply
      • GGG

        How is it tossing money away? The alternative is putting all this content on sites they pay substantially less.

        Reply
        • Justin Mayer

          They are paying for a feeling… It gives them pleasure to feel they are contributing to something, whether its the war against major labels and corporations, else its simply these greasing techsters finding ways to funnel and cycle the money through that they raped elsewhere, else its people needing some sort of charitable donation tax write off…

          Its actually a decent trade off for most musicians as they don’t have to give up the ownership of their masters, of course the very architecture providing that is actually scuttling the value of the Masters at the same time, so its a little concerning…

          Not to mention not only do the musicians and artists as well as those providing patronage get zero part in the equity of the business that they help to generate interest and eventual IPO from, its tech 2.0 scamsville all the way…. Never the less, plenty of good, i dont want you to think im some angry upset person because of other things you might be assuming.

          To me Its the dumbest play i’ve ever seen and not only does it not hurt corporations, the man or major labels, but ultimately just gives them more power and leverage with the ability to buy property at pennies on the dollar should they feel the need to.

          I guess i just don’t feel these free tools and stuff is worth the trade off of what has to be given up in order to MAYBE get a few coins tossed your way.

          The big different between you and i, is the alternatives i look at, have nothing to do with any of these tech sites. Looking to another website is inside the box thinking, i have copious outside the box ideas, but these tech people just want sole people to take the knee for their free tools all so they can generate gargantuan profits and siphoning and investment and IPO’s… Like they give a flying fuck about preserving or helping the Arts, their motives are always ulterior…

          Reply
          • GGG

            It’s not a free tool (for the consumer), that’s the whole point. It’s an alternative to the low cost/free distribution models that are becoming the norm and most likely will be in the future. You can charge $100 a month if you want, for extra content. Put out an album on iTunes, Spotify, etc, then put up bonus tracks, videos, remixes, etc through Patreon and charge for it. If you have fans, some will pay. Everyone wins.

        • Justin Mayer

          Just do the math…

          1 000 000 / 45 000 = $22.00

          You can also see that some make way more then that a month. You cannot deny $12 grand/month as a killer way to make a living doing something you love.

          But its so fishy smelling, it just stinks, like the old fishermen had just come in from a long days catch and left the fishes guts strewn about the dock…

          So knowing that the average works out to just over $20 per month and since some are making so much, some people are making squadouche, yet still contributing to the businesses bottom line.

          Then at 5%, the business is pocketing up front $50 000 or so, $6 Milly a year as of right now, give or take and of course, the artists themselves cover the 4% credit card fees.

          I’d be more then happy making $144 000 / year, but something tells me just signing up and giving away free content ain’t gonna do it…

          To obtain that you need massive fans, fans you have to convene yourself, so why not instead say hey guys, patreon is taking 5% from yall, how about you give it direct to me and well take say 3% of the lump sum and toss that into investments and such where maybe all of us can make some money?

          It just reeks, as it always does, constantly…

          But an oh man it sure sounds fucking glorious doesn’t it?

          Artists and creators ALWAYS believe, amidst the overall numbers, that they will be that one to rake in the $12 grand a month…. What if that creator has some backend deal that gets them front page coverage or else some of these tribes to come together to toss in a few bucks a month to sell the dream to artists and creators??

          its possible. i know their site claims otherwise, but you never know, im just sayin, when you follow the money, it aint going to the artists, as usual…

          Anyways… what it do baby boo… Im a traditional artists and you wouldnt catch me dead pushing something like this, actually i shouldnt say that, im likely to starve soon, maybe patreon can use my cadaver as reverse marketing as why artists and creators should use their site.

          How long before people realize the old web tech 2.0 thing aint working out? How many years of sites one after the other claiming utopia and freedom will it take before artists creators and patrons realize its just middle men siphoning of more then just money…

          anyhoo…

          Congrats to the artists and creators that this works for and who are making good coin every month and congrats to the owners and shareholders of this business, its super smart and in the big scheme of things at least somewhat positive i guess, i mean all considering of course… who wouldnt want to get paid just to make content???

          what it do baby baaaaabbbbbbbyyyyyyyyyyy

          🙂

          Reply
          • GGG

            1. A huge chunk of people on that site probably have no fans or don’t offer anything special. Hence them making no money.

            2. What part of people pay for the content don’t you understand. That is literally the point of this website.

          • Anonymous

            sigh… i understand nothing at all, ever, and anything i say and do is done under duress…

            Anyways, there’s no point man, anything i say or do will be used against me as well i realize that selling tech devices, data plans and promoting free sharing of music and content and information is just far too beneficial to society, even though it just ruins the chances and lives of so many individuals, the Corporations etc. making money and the little posses owning their turf and territory, all while cheaply employing people as well as collecting and selling and investigating/studying peoples data and information, which they blindly steal for zero compensation, is just far too important for society, their society, which im clearly not a part of or welcome in…

            I’m just a partisan bystander now, watching the wheels go round, i really hope it works out for people in the long term….

            best of luck…

      • Anonymous

        greeters was supposed to be TECHSTER…

        brilliant techsters that insist their software and autocorrect is smarter and knows more then me…

        its dumb shit by the same tribesmen circle TECHSTER 2.0 pushing people who are making a fucking killing on the backend and essentially contributing to the annihilation of so many things, and believe me, their do good goody two shoes marketed image is anything but that…

        Reply
  6. Amyt

    Services like Patreon and Subbable are nice, I’m sure, for a lot of creators. However, my only gripe with them is that they kind of change the relationship between the creators and their fans. Creators should feel grateful towards their fans too but this is basically a fancy way of asking for donations. I’d be more interested in Creators who sell a fixed subscription/ fan club and provide a clear value in return. Music “business” can’t come down to charity.

    I might be completely wrong though.

    Reply
  7. Joshua Hall

    It’s just like Public Radio. It’s free and if you want you can support it in many ways – monthly, one time payment, estate planning…… As an artist,If you can make it work for you, then great.

    Reply
  8. steveh

    It’s that word “patron”.

    I fucking hate that word – cannot live with it.

    Anything involving that word “patron” just puts me totality off.

    Reply
    • steveh

      Look here Americans! The word “patron” for me (I am English) embodies all the foul concepts of elitism and social class rigidity that your ancestors supposedly rebelled against in 1786.

      For fuck’s sake wake up and ditch this crap!

      Reply
      • GGG

        I can guarantee you the word ‘patron’ is not the only word you use today that meant something slightly different a couple hundred years ago…

        Here in the USofA, ‘patron’ has been used to mean a financial supporter of stuff (usually the arts) by many levels of institutions. Has nothing to do with class. I can be a patron of something by giving $5 while Bill Gates can be right behind me being a patron for $5M.

        Reply
  9. Hi Res Audio Central

    This site is indispensable, congrats on doing such an awesome job!

    Reply
  10. Math, Ari?

    Ari,

    “Inevitably going public”? Are you serious? Do you do the math thing often?

    Patreon keeps 5% of all pledges. At $22/month gross per creator, that means Patreon earns $1.10 in revenue per creator per month, or $13.2/year.

    Assuming that the minimum revenue for going public is in the $50 Million range, that means that Patreon will be able to go public when they have 3,787,000 or so creators on the site (assuming that the current early adopters aren’t driving more revenue than the average). In order to achieve that in the next 5 years, they would need to be adding a net of over 2,000 creators per day (net being inclusive of those who quit or go inactive).

    Don’t get me wrong, 45,000 creators is impressive. But they need to grow it 84x to go public.

    More likely they will fail or get acquired before they get anywhere near that revenue number.

    Honestly, I don’t know why you have to go from being a fanboy for certain companies to just looking ridiculous by making sweeping statements about companies that are going to ‘save the music industry’ or ‘go public for sure’. I start reading your stories and often get your vibe, only to be de-railed by the over-the-top ignorant statements you make b/c you wish they would come true.

    Would you mind stopping that? It really discredits everything you write.

    Reply
    • There is something...

      Going public is the last thing you want a company like that to do. Once they go public, you can bet all you want that their primary goal will NOT be the success of the artists and creators, but how much shareholders can suck before throwing the whole thing to the trash.

      Reply
      • agraham999

        The problem for Patreon is that it doesn’t really have a patentable or defendable business model so competition is not only inevitable, but it is already happening. YouTube, for example, can offer a more direct path, could afford to take less, have better integration, scalability, etc.

        That means Patreon has to not only hustle and offer a better solution at a better rate, but they have to do so before they run out of money or exit…and that exit is likely an acquisition.

        Hence the perils of any startup…I think they motivation behind it is a great one, but I don’t know if it can sustain itself or survive.

        Reply
        • Anonymous

          But youtube wouldnt do it for less. Patreon takes 5%. YouTube takes as much as it can, same with all these other companies.
          If you can use places like youtube but have a link to your patreon profile then creators can earn something for what they do. Whether its a hobby or something they dedicate most of their time to.
          Creators would have no reason to go elsewhere and if it was bought out then someone could just make another one and charge 5% again instead of 50% like a big company would.

          Reply
  11. MickeyMac

    Haters gonna hate…
    The entire idea of a horde of wannabes trashing an idea, or platform that they’ve never tried just really makes me laugh! Turn off your computer, get out your bedroom, move out of your parent’s house and step into the real world – you won’t have time to rant and trash anymore because you’ll be scrabbling for food…and maybe – just maybe- you’ll come down from your throne long enough to say, “hey, this might work,” rather than just throwing stones from mama’s bedroom window.

    Reply
    • There is something...

      Unfortunately, everyone complain that there is no money in the recording business anymore, but each time someone comes with a way to make some money, everyone complain even more that this isn’t how musician should make money…

      Reply
  12. Anonymous

    i just saw a pledge page for the tragically hip…

    devastated…

    its just a terrible look for such great artists…

    Reply
    • Anonymous

      i just wish instead of taking pledges offer or paterons offer, to be a famous marketing face to draw in dreamers and idiots, and instead that all of us came together, consolidated our power and put all our property under one umbrella sans any silly label or suit advertiser.

      So long as we keep the business private, we all would control our own rights and property AND we would have the leverage collectively to get equity.

      But of course no one wants to do that… terribly shame…

      Reply
      • Anonymous

        this revolution stinks big ass donkey balls… the famous tenured artists with huge fan bases are helping to just implant and supplant a whole new middleman that in the end takes more money then ever before and offers less money making potential and possibilities then ever before.

        sure the artists get to keep their masters and property, but the value plummets to essentially zero and offers them no security and very little room for growth.

        so the famous artists take their payment to help market the revolutionary bullshit and everyone else gets super fucked now, especially those just starting out, as the money to build a fan base is gone….

        oh what a sweet revolution, yeah, only if you are the techsters owning the business that fucking sticks it to everyone or the tenured artists who will be fine anyways taking nice payments to market some techsters business to catch a bunch of dreamers….

        Reply
        • Anonymous

          who knows tho…

          could be more label breeding grounds where they just steal steal steal steal steal and use use use use use and not pay out anything like they should….

          tough to say….

          Reply
  13. Anonymous

    Hey I didn’t realize Jack Conte founded it… That’s bad ass man, something I’ve wanted to breach into for awhile, a business and website to help the arts and further culture… Still won’t use it myself, but good thinking my man…

    Reply
  14. Dan

    According to the article, the 3 artists are making $36,000 total of the 1 million – that is $12,000 average for those three artists which mathwise means 84 artists of the 45,000 could be making money are the other 44,916 are making zero dollars.

    Reply

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