Patreon Enters Crisis Mode as Patrons & Creators Start Bailing

Patreon Under Fire As Patrons and Creators Flee Service

Instead of actually solving the problem, Patreon’s “fixes” seem to have further exasperated content creators and patrons.

Jack Conte understands content creators on YouTube.

As a musician on the popular video platform, he had millions of people watching his videos.  But, he only received hundreds of dollars for his original content.  So, he founded Patreon.

This year, the popular crowdfunding platform has one million monthly active patrons and fifty thousand monthly active creators. Patreon estimates that this year, creators on the platform will earn $150 million.

That number may soon drop substantially, however, as creators and patrons flee the service.  The reason?  The crowdfunding platform recently introduced new service fees.  So, what’s the problem with that?  The fees now directly affect patrons, especially those who donate $1.

Does anyone understand Patreon’s new fees?

Yesterday, Patreon announced a new service fee.

Currently, the popular crowdfunding platform takes a modest 5% fee from each pledge.  Starting December 18th, however, patrons will have to pay an additional 2.9% for individual pledges, along with a 35 cent fee.  This change applies to paid posts.

According to the company, creators on the platform would keep a lot more money than ever before. A blog post read,

With this update, creators will now take home exactly 95% of each pledge with no additional fees. In the past, a creator’s income on Patreon varied because of processing fees every month. They could lose anywhere from 7-15% of their earnings to these fees. This means creators actually took home a lower percentage of pledges than their patrons may have realized.

Not everyone was convinced, however.

Content creators immediately took to Twitter to slam the proposed changes. Gibson Twist, a comic artist, wrote,

Some pretty troubling news from @Patreon about changes in how they charge Patrons.  I’m going to lose a lot of my backers over this.  Still looking into it, but I’m very unhappy about this.

Speaking about the confusion behind the proposed changes directly affecting pledges, he added,

Still a little bewildered that it’s real, but they’re now going to add an additional 35 to the cost of every pledge, plus another 2.9%, which will increase most of my Patrons’ pledges by more than a third.  I wouldn’t pay that, I wouldn’t expect anyone else to either.

Though the changes haven’t gone live, creators have reported that they’ve already lost patrons. Jess Nivins tweeted that he has already lost 15 pledges.  Void Burger lost 5 pledges. Others posted images of patrons suspending future pledges over the proposed changes.

Patreon had a good thing going.  So, why the proposed changes?

Following the huge wave of backlash on social media, Patreon quickly entered into panic mode.

Updating its original blog post with charts, the crowdfunding platform explained how the fees would benefit creators.

Image by Patreon

Note that the company had never tacked on service fees prior to the upcoming changes.  In addition, creators can’t choose to cover nor remove these fees.

As with the first announcement, no one bought the company’s story.

Most claim that the service fees will harm artists depending on $1 pledges.  According to one content creator, here’s how Patreon’s fees would work:

Announcement:  If you haven’t seen, Patreon is going to be adding a fee to every pledge moving forward.  You’ll pay 2.9% + 35 cents.  So, on a $1 pledge, you’ll pay $1.38.  On a $10 pledge you’ll pay $10.60.

In a separate tweet, author Chris Buecheler explained why the crowdfunding platform would suddenly introduce service fees.

Here’s what I think is happening with @Patreon — this year they raised $60m in Series C venture funds at a valuation of $450 million (after raising $30m last year and more than doubling the company’s size — almost always a mistake).  Yet they make about $8 million per year. 1/10.

Website designer Amy Hoy added,

File the Patreon thing under A Not Surprising Consequence of Buckets of VC Dollars and Barely Any Revenue.

Bailing on Patreon.

Dustin loves teaching people about science.  So, on Patreon, he frequently uploads quality science videos.  Following the recent changes, however, his channel, Smarter Every Day, immediately lost 50 patrons.

In a blog post, Dustin explained that he would suspend Smarter Every Day.  Dustin also suspended all Patreon charges on uploaded videos.

I logged in and saw that over 50 people had canceled support for Smarter Every Day… I don’t understand the issue yet, but obviously, there is one, so for the time being Smarter Every Day Patreon is on PAUSE.  I won’t click the “Charge Patrons” button until we get this figured out.  Obviously, this is a bit of a setback, but it feels right given how much you have helped me over the years!… I sincerely appreciate all you’ve done for me in the past.  Thanks.

A person who dropped support for Smarter Every Day explained,

Thanks for doing this Destin.  I was one of those that dropped my support to you… I feel that unfortunately, the only way I have a voice about these changes is to vote with my wallet.

Maybe Jack Conte doesn’t understand content creators after all.

 


Featured image by US Air Force Airman Sean Martin (Public Domain)

5 Responses

  1. pschase

    very interesting…let’s see how far this goes. The ongoing struggle to translate creative culture to the business-minded web.

  2. Blobbo

    What there needs to be is a PUBLIC SERVICE company that CANNOT be sold, and CANNOT be affected by investors, but just sits there as a boring service, and takes whatever number it is (15-25%) to pay employees etc.

    There have been so many companies that promised to pay creators ( I can think of tons on the news photo side), and then got screwed and sold out to the monsters of the net. It’s all nonsense.

    Also, make it simple on the donation side of things. What a stupid fee structure, confusing the people who are taking a risk to pay out in the first place. You don’t penalize those people by making it confusing. DUMB!

    A company like Patreon won’t even be able to function properly if Net Neutrality goes to HEL. If that passes, all bets are off.

  3. Syniphe Ykant

    This is NOT what happened, and is NOT what the controversy has been about. People are jumping ship because Patreon deplatformed a creator Sargon of Akkad for dubious reasons without the opportunity for appeal. This deplatforming was politically motivated as this creator was on the wrong side of Patreons political inclination. By way of contrast one of their politically aligned creators advocated self mutilation and violence (Chapos Trap House) without any consequence whatsoever, much less deplatforming. This article is misinformation–pure and simple.

  4. Scott

    Patreon is losing subscribers.and money because they decided to get political and stand in the way of free speech. Now they are reaping the consequences. Patreon sickens me.

  5. Anonymous

    Patreon is just making excusess they didnt lose subs because of changes to charges. They lost subs because they started removing creators for no other reason than ideological bias. It may be that they have been pressured into this by paypal,stripe,mastercard ETC. It is truly disccusting that companies like this are able to effectively control the narrative by removing peoples incomes, just because they have different opinions that they dont like.