Patreon made a blog post on December 7th, 2017 indicating that they would be adding a patron service fee of 2.9% + $0.35 per pledge starting December 18th, 2017. The news did not go down well with patrons at all.
The reason for the service fee? Well, the payment team explained…
“So, we […] spent nearly a year reviewing the numbers and running experiments to make sure the end result was creators either make more money, or keep their current earnings. We actually experimented with three different service fee structures, all of which were higher than the 2.9% + $0.35 we selected. As it turns out, patrons weren’t nearly as sensitive to the amount of the fee as we predicted, but we ultimately chose the lowest service fee that would offset the third party costs in all likely scenarios.”
As you can imagine, many patrons were actually not happy about the news, and decided that it would be time to hang up their support for some of the content creators they support on Patreon.
Sorry @neoteotihuacan, but I’ve canceled all of my @Patreon pledges. I loved supporting creators like you, but I did the math and the $66 I paid in Nov was about to jump to $80 for what seems like pure rent seeking on Patreon’s part.
— Matt Zweig (@matt_zweig) December 8, 2017
I am so sorry. But I am discarding #patreon for lack of #privacy (try accessing it with a browser setup for privacy 😒) and their immense greed on contribution fees 😔 I was supporting great people like @peterkofod but have to seek other ways moving forward. Fuck you @Patreon
— Henrik (@hec4x4) December 8, 2017
Hey y’all, There won’t be an episode this week. Patreon’s potential changes are looking to fuck us and we’re all too disheartened to bring you what might be our last episode this early.
We’ll keep you updated, and hope that everything works out.
— Sights Uncena (@SightsUncena) December 8, 2017
Again, really, from the bottom of my heart. Thanks a lot. pic.twitter.com/BvcMKAKA72
— 💀Brian Clevinger (@bclevinger) December 7, 2017
SJW content creators have been affected along with Conservative content creators. Polygon contributor Merritt K., took to Twitter to complain.
— merritt k (@merrittk) December 7, 2017
Popular comedians like Sungwon Cho also chimed in reproach Patreon on their decision to ramp up the fees for users.
— SungWon Cho (ProZD) (@prozdkp) December 7, 2017
Patreon explains that the fees are what’s killing some of the currency being paid out to content creators. They claim that they regularly receive complaints from creators stating that a large portion of their earnings aren’t making it through, with up to 10% going to fees alone.
One Twitter user adjusted the math to look over the data and was incensed at how much Paypal is taking off the top.
Patreon posted an update post, so I updated my math
It turns out @Patreon aren’t skimming way more off our pledges. I owe them an apology
All that extra money they’re taking now? STRAIGHT TO PAYPAL pic.twitter.com/LqM8DuTtD6
— B̢̪̝u̶̠ͅr̩̹̘̙̞r͝i̜̥͓t̵̥̠̞o͢ ͔̪̻T̤͍̥̰̺i͚̠͍̜̭m̻̞ (@Burrito_Tim) December 8, 2017
Novelist Chris Buecheler disagreed with Patreon’s tactics but stated he understood their desire to grow profitability, stating that they were likely increasing fees on the user’s end to get ROI for the venture capital investors.
Most sane company valuations are 10x-20x revenue, with 20x being a high-end for desirable acquihires by Google/etc. Under that math, Patreon should be worth $80-$160 million. Yet they raised at $450m. 56x revenue! This means they’re under intense pressure to increase $$$. 2/10
— Chris Buecheler (@cwbuecheler) December 7, 2017
Patreon creator, Jack Conte, dipped into the conversation to explain that what Buecheler stated was incorrect and that the change was to mitigate away from the charges that content creators incurred in hopes that the content creators would get to keep more of what they earned from their patrons.
In the update, the payment team at Patreon claimed that it wasn’t about making as much money as they could from the service fees, writing….
“This was never (and still isn’t) about making more money for Patreon as a company. This is a strategic move to make our platform even better for creators and patrons in the future. We want a Patreon where all creators receive their money as soon as a patron pledges.“
Despite claiming to be for the creators, a lot of the patrons don’t actually buy it, and this could have some drastic effects when it comes to those relying on Patreon to fund their content creation, especially YouTubers.
On the other side of the spectrum, a lot of SJWs also use Patreon, so this will be affecting them as well.
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