When popular crowdfunding platform Patreon announced a massive, controversial change to the way it processed payments—asking patrons to pay a fee for each pledge, even if their pledge was only $1— the backlash was swift, loud, and sustained. Many of the creators it was supposed to help by putting more money in their pocket came out against the changes. Today, the company is unilaterally backing off those changes.
I’m extreeeemely cautious about Patreon right now. An important wording in this update that people are not mentioning is “We still have to fix the problems that those changes addressed, but we’re going to fix them in a different way”. They said “fix”, so Patreon is in for some change-ups because they want to make money. We’re not just going to be returning to the Patreon we knew, but a Patreon in flux. Hopefully they actually listen. They also repeat that they need to build a better system for $1-2 patrons, so those people are still in danger of having their pledges messed with.
It’s helpful for people who were struggling losing patrons from these changes that they have fully reversed them instead of just saying they hear us and not doing anything. But it’s helpful in the same way that America just barely not electing another molester is helpful–I can’t believe this is ground we have to fight for. And it will be hard to win back the ground we already lost. I lost about $25 worth of support and I’m going to awkwardly message those people today asking if they wanna come back 2 mello.
So there’s a pretty big difference between the statement they put out, and what Jack has been telling news outlets about the change.
Their statement says this:
We still have to fix the problems that those changes addressed, but we’re going to fix them in a different way, and we’re going to work with you to come up with the specifics, as we should have done the first time around.
Note that they say absolutely nothing about which problems, specifically, they want to address. What becomes clear rather quickly is that the problem was and is payment processing – most likely batching payments.
But “the system that my co-founder came up with 4 years ago in 25 days” needs to be updated. Patreon has to abide by credit card processing rules while keeping enough revenue to stay alive. Conte tells me Patreon still has a bunch of new premium tools in the works for creators, a storefront for selling merchandise for example, that will be unveiled in the coming year and will help it earn more money to keep the platform sustainable. But many creators surely construed the payment structure change as a way for Patreon to jack up fees.
By Wednesday, Conte said Patreon was reversing the policy change. The fee structure still needs to change, he said, but not in the way they had originally planned.
The new fees, Conte said, were always going to come with trade-offs for creators and patrons alike. “We thought these trade-offs were worth it. We thought that the cons of the new system were worth it,” he said. “And creators have been adamant, they’ve been clear, they’ve been overwhelmingly clear with this that the trade-offs are not worth it.”
Conte said unequivocally that Patreon did not reverse course because people were deleting their Patreon accounts. “The reason for rolling back the change was not disproportionate pledge deletion,” he said. “It was the amount of anger.”
Conte said Patreon still must find a way to fix its payments processing problem. But going forward, he plans to gather more qualitative data from users before rolling out changes.
“Creators are really skeptical of getting screwed by tech companies,” Conte told BuzzFeed News. “‘Here’s another tech platform coming along that’s going to screw us.’ They’ve been screwed over and over, and that makes me so mad at myself and upset. I do not want Patreon do be one of those platforms that doesn’t listen to our users and hurts them.”
It’s actually kind of impressive how quickly Jack moves to shoot himself in the foot every time he does something. (That last bit is a giant eyeroll if you’ve been following his posts for the last week.)
He’s basically confirmed they’re going to have a fee increase at some point, probably hidden on the creator’s side so as to not anger patrons. He’s more or less confirmed that they expected the hit to pledges and didn’t care until people got furious (which, if you’re a creator … holy shit).
Nothing’s really changed; all they did today was kick the can down the road in the hope that people will stop being mad. And given that there’s no viable competitor at the moment … it might work?! UGH.
In any case, the damage to creators has already been done. Everyone now knows exactly how incompetent Patreon is as a service. The real question is what, if anything, can anyone do about it, when everyone is stuck trying to survive in a system that incentivizes making and breaking platforms for profit.
I think a good indication will be subscriber counts ~ February, after people have paid off potential holiday expenses. I’m sure plenty of people halt giving to Patreon in December due to that, so the impact might be more complicated than it looks.
If you’ve been following creators on Twitter, it’s extremely clear that the drop off was in response to Patreon’s fee changes, and not some imagined Christmas season cancellation. We know this, because creators have been pasting screenshot after screenshot of the cancellation feedback they’ve gotten, and all of it has been angry complaints about the new fees.
February will be interesting, but not for the reasons you mention. Nobody knows if those patrons are coming back, and even if they do, creators might have moved on to a different service by then. There are already creators who have implemented their own subscription options on their site using PayPal or Stripe (even though micropayments are expensive either way), and Drip will probably be open to the public soon.
As a creator, I’m going to try to eat the costs on my end if they give me the option. I’m used to only getting 75 percent of anything I make online anyway. I know everyone can’t do that and a lot of people came to Patreon because the money you actually get is so close to the money shown, so I hope whatever they come up with is more flexible.
The part about this whole thing that made me the most angry was not that Patreon wants to make more money. That’s totally fine, their site provides a great service and I want it to continue being a thing.
It’s that they tried to do it in the most soulless, horrible way possible–trying to ingratiate us onto their side against our own patrons, the people making this WHOLE thing work. It’s clear Patreon was trying to wink at us and say “hey, we screw over these low pledgers we all win eh? eh?”
At this point getting money from creating things on the Internet is so hard that you’re pretty much forced to work with services and social networks that you know are awful. I look the other way so freaking much. All I ask is that they don’t fuck with my patrons’ money.
The sudden and severe nature of both these changes is very alarming, honestly. It makes me concerned that Patreon will disappear within months.
I’m guilty of idealizing Patreon, because I love what it represents: an actual semi-democratization of money. It’s still through a big org, and hinges on Credit Cards and Telcos. But hearing about it initially was so exciting. I can pay for these things people give me for free! And if I pay for some things, others will pay for the other things! Ethical Content.
If anything, this past week proved Ethical Content really is always a lie. There’s always a loser, always someone exploited. It was supposed to be small creators this week, a group of people who are already attacked on every other angle, facing hostility on an interface that’s supposed to connect them to their most ardent supporters. And if it’s not them now, it will be them eventually.
My guess is that it’s that, and/or the credit card companies got really angry at them. With minimal regulation, big CC companies mostly write the rules for themselves. For example, banks and payment processors are allowed to do things like refuse payment to creators of adult content and freeze their accounts, even though there’s no legal basis for it. PayPal does so many bizarre and arbitrary bans without recourse that I don’t consider them a safe place for anyone to keep money.
One of the big undercurrents of this story that isn’t discussed as much is that payment processing fee structures (credit cards in particular) make micropayments too expensive to be practical in many (most?) circumstances. I’m starting to wonder if Patreon making them affordable through batch processing was an accident.
It’s not discussed a lot, because businesses deliberately hide those costs so as not to panic the consumer. (Patreon not hiding them has led some to conclude that the people running the show have never run a business before.) In practice, the closest thing you’ll see to an acknowledgement of this in the real world are small businesses who post signs prohibiting credit card transactions below a certain dollar amount.
If you’re wondering why artists would ask for $1-5 pledges even though they know a good chunk will be eaten by fees: they have no choice. A small percentage of $1 is still better than $0 – and the vast majority of pledges on Patreon (and probably elsewhere) are in that range.
Unless you can find a way to have a service with less fees on small dollar transactions, which is sustainable, passes legal muster, AND doesn’t piss off credit card companies and payment processors (while low-key competing against them), you can’t have affordable micropayments. And that’s without acknowledging that said service wouldn’t be owned by the people using it, and could change its fee structure at any time. It’s not a great situation!
I’m not personally convinced that a service which actually did this would be successful on those merits, because most patrons simply weren’t aware of the issue until Patreon rubbed their faces in it. (I know I wasn’t.) Now that they’ve backed off, it’s not clear how much of that lesson will stick.
I’ll be the first to admit that I am not too up to speed on Patreon, but after reading all of this hullabaloo, I’m wondering if there is some sort of alternative in which people are considering moving towards? It seems like a ripe time for people to get out but I don’t know if there are any viable alternatives.
My friend wrote up a short thread on some alternatives and why none of them are really ready for Patreon creators to flee to.
The most hopeful among the ones named here is the Kickstarter-backed Drip. Everybody’s kind of waiting for Drip or ko-fi to become a Patreon-like. Right now, Drip is invite-only and not a lot of people with invites have been reporting back about it, it seems. ko-fi is meant to be a way to donate small one-time payments to creators, I think.
Also, it’s very hard to get out. It’s like moving an ecosystem. I would probably lose 80% of my support if I was asking them to sign up and connect their payment info to a different website just to continue paying me money. Many creators would never recover from a platform move, which is why the business with Patreon is so scary. A lot of people depend on it for very real and urgent bills that come like clockwork.
Ah, I understand. I sorta thought there were going to be smaller alternatives like you mentioned. I just hoped that there would be at least one which would be gaining some speed (à la Lyft jumping all over Uber [although this may not be the best comparison as Lyft was already pretty big]).
I’m sure d.rip at least is overjoyed about this, and I know they’re actively preparing to eat its lunch. A Patreon-like service that has been able to watch Patreon and see what has happened with it over time is hopefully going to be better built.
I feel like this is the biggest current issue. Patreon reversing course temporarily does not help if you already know they’re dropping that shoe again down the road. You can’t get people to pledge if the means to pledge are uncertain and keep changing.
This is the thing people miss when they tell creators to “diversify” their income. Doing so is not always possible or practical, and the people who most need to do it have the least resources to.
Anyway, there’s two more important bits of context about why people are angry at Patreon, which haven’t been mentioned yet.
First: the VC thing.
You’ll want to read the follow-up to the 2nd thread to get the whole picture. tl;dr: Patreon has probably burned, or is in the process of burning through, a ton of VC money just to stay afloat, and are way overvalued at the moment.
(For the record, Jack has repeatedly denied that the new fees had anything to with VC funding. That doesn’t change any of those numbers, though.)
Second, this article:
Or as Spike put it:
So. That article came out in June, well before any of the current nonsense happened.
The “hilarious” part of that article is that it doesn’t specify when any of those growth experiments took place. If they happened, say, during this spring’s Youtube Adpocalypse, then pretty much all of their conclusions are moot.
It also doesn’t specify what their internal threshold is for a “financially successful creator”. My guess is it’s likely to be whatever number they think they can make a profit on … and not likely to be the majority of creators actually on Patreon. The fact that they explicitly state that they focus on FSCs to the exclusion of everything else is just the cherry on top of a giant shit cake.
Here’s a quick chaser to (not) help all that go down:
I cancelled my account yesterday, so am claiming all the credit for this.
I am not sure about coming back though. From the message I got when I deleted it, I can’t get it back anyway, I would need to start from scratch, and I spoke to the creators that I stopped pledging to they all said they would look at other ways I could support them directly.
Though, interestingly, each one I spoke to said they had had little drop off. Maybe their pledgers didn’t care/didn’t read the email.
Edit - Actually, did they send emails out? I haven’t had one saying they have reversed this decision and it makes me wonder if I found out about it on Twitter first and then Waypoint rather than getting an email from Patreon?
They sent out emails to patrons announcing the original change, the day after they’d sent it to creators saying “here’s how you sell this to your patrons.” If they do the same timing, maybe we’ll get a takeback email today, but I haven’t seen one yet.