How Patreon Changes Will Wow Artists and Patrons [Updated]
The Patreon artist funding platform is making some changes to the way it handles patron promises, and it’s already costing both creators and their backers more than they’d like. Patreon’s transaction fee change ensures creators receive 95% of the amount allocated by patrons for their creative work. Unfortunately, this also means that backers will be charged extra for their promises, and as a result, some backers cut back or cancel their promises.
How Patreon Vows Work Before
Previously, Patreon handled payments on the first of every month (except for “prepaid” creators who initially charged new visitors on sign-up and then on the first of the month). Some artists also charge a creation fee, the total cost of which is payable on the first of the month.
If you support, for example, three creators with three promises of $ 5 a month, that means you are spending $ 15 a month. Patreon then deducts a 5% service fee from the deposit, in addition to the required processing fee. As a result, creators receive a fluctuating amount of monthly income, subtracting from 85 to 93% of what was originally due to them.
How your payment to creators will change
Now, to combat a royalty change that could affect creators’ net income, Patreon is shifting the burden of processing fees onto the patrons themselves. Creators will be guaranteed 95% of their expected promise, while backers will pay more to cover the processing fee.
In addition to service fees, patrons will now be charged a monthly fee on the day they promised money to the creator (just like your Netflix subscription that you purchased on July 4th renews on the fourth of every month, rather than the first of every month) … If creators charge a fee to create, users will be charged when those creations become available.
So now your support for three creators with three $ 5 promises each month will cost you $ 16.49 a month. Not much, but enough for some to consider dropping one or two creators from their list of commitments.
Support your favorite podcaster with a $ 10 monthly subscription? You will spend an additional 2.9% of the assigned subscription (in this case, $ 0.29), as well as a flat fee of $ 0.35. It might not be much if you’re already donating more than $ 5 a month to a creator, but backers supporting multiple creators with donations closer to $ 1 a month (like me) will be disproportionately affected by the processing fee change.
We contacted Patreon to find out why the changes were made and how they will affect both patrons and creators. “We endlessly think about the influence of the creator and patron on every decision we make,” said a Patreon spokesman. “Through testing with both creators and patrons, we’ve established a reward that will have the least impact on creators and backers, considering both the amount the backers are promising and the likelihood that they will continue to support their creators on Patreon.”
The decision to disproportionately influence patrons donating smaller amounts seems to run counter to Patreon’s goal of using crowdfunding to support creators. Patrons looking to donate smaller amounts to multiple creators are discouraged with the addition of these fees – fees that only further confuse patrons who prefer a simpler monthly fee and patrons who support multiple creators at once. Since the announcement, some Patreon creators have posted screenshots of their supporters that either downgrade or cancel their commitments altogether .
As a supporter of the five Patreon creators, I can’t say I’m happy with this change myself. While Patreon claims it can’t eat the cost of processing fees with its current 5% cut in fees, I can imagine both creators and patrons will understand if a company needs to take the most of every promise to get patrons to donate. at the same price.
Updated at 1:40 pm 12/13/17 : Patreon CEO Jack Conte announced on the company ‘s blog that he was phasing out the new payment system, which was originally slated to take effect on December 18th. “We heard you loud and clear,” he said. Conte. “We are not going to make the changes to our payment system that we announced last week . We still need to fix the issues that were fixed by these changes, but we’re going to fix them in a different way, and we’ll work with you to come up with features like we should have done the first time. … “