A Look at the Patreon Model

The fact nobody supposedly makes a living on Patreon has never been an issue to me. It is a supplementary form of income that allows artists, cosplayers, writers, podcasters, and more, to put their work behind a paywall or to receive donations from fans. Unlike how Patreon advertises itself, it is not the ideal model for creators to survive off of freelancing. Still, it serves its purpose and enables creators with a platform to have a little bit of extra money each month. The problem that I’m seeing more and more of is the gigantic gap between Patreon’s profits and priorities versus that of the Patreon artists.

In Keith Parkin’s Medium article in 2017, he asked, “Is Patreon a Scam?” In the article, Parkins highlights the platform’s controversy where it was proposed that patrons pay an extra 0.37 cents per pledge, thus hurting less popular creators who rely on their accumulation of 1 USD subscriptions. In the quoted twitter thread, Julie Dillon argued that even those few extra dollars a month can be life changing, and that it hurts to have the platform dismiss this. Of course, the changes were rolled back and Patreon apologized, but the change ultimately revealed the core philosophy and priority behind the platform. The change would have been devastating for small creators (who make up the majority of Patreon), somewhat profitable for larger creators, and incredibly profitable for Patreon. Twitter user @Burrito_Tim calculated that with his pledges, the platform would receive 118% more after the change. Again, even though this new policy was rectified, Patreon is in a position to decide that the demands of investors and their own pursuit of profit outweighs the bad PR of small creators’ outcries. After all, according to Patreon, they only value the “truly life-changing creators.”

In 2017, Patreon received around 60 million in investment capital from Thrive Capital after already having received 30 million from them in 2016, and 17 million in 2014. According to Dan Olsen, Patreon has only actually earned 55 million in revenue since 2013, which makes it highly unprofitable expense right now for those who have invested in it, thus placing further pressure on the platform to generate revenue streams that serve neither the consumer nor the creators.

After the Patreon CEO’s recent announcement that the platform’s current model is “unsustainable,” twitter user Dan Olsen predicts, “series of ill-advised feature rollouts, like they’ll probably go gonzo and build a livestreaming platform or pivot to Fortnite or buy Teespring or something equally confusing, with a slow degradation of the core user experience. Like you’ll sign in and there’ll be six popups asking if you’ve tried Patreon Mega and extolling how it can help you mega-engage with your audience, while you’re just like “can I have a commission button so people can make one-time payments?” and they’re like “no.” Unfortunately, the increasing demand for Patreon to focus only on trying to draw more Hank Green-type clients and profit off of them means the site is often neglecting its primary user base.

There will also likely be a big push to find ways to further monetize creators and have them pay for a better experience. So what is the solution then? I definitely think there needs to be a cooperative platform version made for and by creators. The cooperative version ideally would respect both the small tier and top tier creators, have more payment options that would allow for grouping together as channels and one-time commission payments, and it would have a model that does not overcharge for payment transfer fees. It would serve the creators, rather than treating them like serfs. Until then, creators using Patreon at the mercy of a platform that is at the mercy of venture capitalists. We need more platforms for creators that will put proportionally put money into the hands of workers rather than the pockets of corporations that are looking to just expand the value of the platform so they can sell it for a profit. When the latter happens, the “target audience” of the platform becomes its venture capitalist investors, and what follows is censorship, and a website that ultimately does not prioritize its users.

Citations:

https://twitter.com/FoldableHuman/status/1092870599985123329

https://theoutline.com/post/2571/no-one-makes-a-living-on-patreon?zd=1&zi=pmnmzelf

https://medium.com/dark-mountain/is-patreon-a-scam-a9d0e38bd69e

One Reply to “A Look at the Patreon Model”

  1. Hi Amber,

    I appreciate that you jumped right into your thoughts on Patreon!

    I like that you brought up the issues with the investment money. It’s a great point that with so many shareholders to please, they don’t really have the best interest of the creators at heart. It’s also a huge issue that they are really only catering to their top 1% of users.

    Jaiden and I also agree that there could be some kind of platform co-op model. It would be interesting to see play out though likely quite complex in practice. How do you think it would be able to play out?

    Thanks for your thoughts! :)

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