None of the Above: Patreon’s darker side and an alternative solution

Patreon appears to have good intentions, claiming that artists who use this crowdfunding service “have a direct relationship with [their] biggest fans, get recurring revenue for [their] work and create on [their] own terms.” Plus, for handling all the nuisances of hunting down declined payments, shielding you from chargebacks, handling patrons’ questions and catching fraud before it hits your balance while also acting as a simple conduit for cash to creator they only take a 5% cut, plus that 5% transactions fees average. As a creator you get to keep 90% of what was given to you by your patrons. It’s not a horrible deal, but it could be better so why don’t the artists take back all the control and get rid of the middle man? Yes, I’m talking about a creative co-op for all these self-starter artists. Plus, that 5% cut for Patreon is only the tip of the iceberg of their not-so transparent ways.

Brent Knepper railed against Patreon in his article on The Outline, and believe me, I can empathize with the pains of being a starving artist. Patreon presented itself as a saviour, and hey, look at all its success stories! Except as Knepper points out, only 2% of creators make the equivalent of federal minimum wage. Knepper claims that Patreon began to consume his downtime, as he tried to attract his followers to his Patreon page. The Economist article about Patreon also criticized it for “not [creating] large new avenues to be discovered by unwitting fans” and that Patreon is the equivalent to the open guitar case buskers use to catch spare change. Yes, Patreon gives the overly-optimistic impression of being able to live off your patrons, and the reality of that only comes true for the top 2%. As creators it is better to just assume Patreon as your second or third revenue stream instead of a primary one.

Except there are more problems than what Knepper and the Economist article point out. Things haven’t always gone smoothly with payments, when they were accidentally flagged as fraud and through a series of banking errors and issues within internal company operations some creators were denied 50% of their earnings and weren’t even able to access the money that did make it through. If a creator depends on this income for their rent or paying out their team this has much larger implications. Plus, it’s not a matter of if Patreon is bought by Facebook or Google but when. While Patreon’s CEO claims the business model isn’t sustainable with the rapid growth its seen in the last six years, this is still a business that has seen investors flock to it like gluttons to a bottomless buffet. Patreon’s popularity and rapid growth make Goliaths like Facebook and Google salivate. This is more of a problem for creators and their patrons as the service distances itself from them and instead gives the product of its bounty to its new owner. And if Patreon goes down then how are you going to get your patrons to follow you to the next medium? It already took so much effort to get them to convert to your Patreon, so you can say bye-bye to revenue and hello to square-one.

There has to be another option for artists to be supported by their fans, and one that doesn’t take the same amount of effort as the Memberful plugin (it’s like Patreon except the creator does all the work, from customer service with your patrons to cases of fraud or bounced payments). So what’s the solution? Take out the middleman. Patreon “extract[s] value and distribute[s] it to shareholding owners who seek a return on investment,” but if artists band together to create a platform co-op where ownership and management of the enterprise would be distributed to those using the service. With this model the artists would actually be prioritized and wouldn’t have to rely on another benevolent overlord. This could also be a solution for creating a real community of artists and a network of discoverability for the patrons who fund their favourite creators. What it’s going to take is a small group of determined artists who are willing to put in the elbow grease to make a co-op happen. Take that energy you put into Patreon and really invest it back into yourself and your fellow creators.

Sources

Patreon, Kickstarter and the new patrons of the arts

No one makes a living on Patreon

Patreon

Patreon creators scramble as payments are mistakenly flagged as fraud

Patreon CEO says the company’s generous business model is not sustainable as it sees rapid growth

Comparing Patreon and Memberful

A Shareable Explainer: What is a Platform Co-op?

2 Replies to “None of the Above: Patreon’s darker side and an alternative solution”

  1. Hi Jaiden,

    I wrote about this in week 4, so I am biased and totally agree that there could be a platform co-op version of Patreon. I like the angle you took in talking about the lack of sustainability in the Patreon model. Of course people are upset that they aren’t making a living off of Patreon but there are larger issues surrounding stability at play.

    It was great how you set up the issue before proposing the solution. I am so curious about a business model like this coming to fruition. How would the payments work, how would the security be managed, could PayPal be used? I have so many questions!

    Thanks for your thoughts! :)

  2. Hello!

    I enjoyed reading your post! I do agree that users cannot depend fully on Patreon and there are imperfections in the business model. I also agree with the platform co-op as a business model as an alternative solution, but It made me wonder why not until now there is no place for creators by creator yet? What are the flaws of the suggested business model?

    As Jaz mentioned too I enjoyed the way you stated the facts and the problems of Patreon business model and then “boom” suggested for us an alternative!

    Thank you for sharing.

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