Patreon payment changes and what they mean for you

Patreon have put in a new payment structure. Every transaction now attracts a fee of 2.9% plus 35 cents, paid by the patron — rather than out of the creator’s share, as previously.

Lots of creators are very unhappy at these changes, and attempting to at least get an opt-out. As is immediately obvious, this will directly discourage (a) small monthy amounts — the $1 tier, which will become a $1.38 tier — and (b) per-creation pledges.

Patreon’s FAQ speaks as if this is great news with no downsides! Comic artist Gibson Twist does some numbers for his own Patreon:

Some quick math and the numbers are jarring. Right now, artists pocket  80-85ish% of what our Patrons pay. Under the new system, we’ll get  roughly 70% of what most Patrons pay. They’re selling to us as “You get a  higher % of the money!” but in truth, we’re getting a lot less.

For me, I’m somewhat annoyed, as your $5 will become about $5.50 (with about the same overhead) — but the point of the $1 tier is to get interested people to sign up at all. Gah.

It turns out monopsonies have a number of practical problems.

I’ll be sticking with Patreon for now — if you haven’t subscribed, please do so, I really appreciate it and it helps a lot! — but some creators, e.g., the estimable Andrew Hickey, are exploring other options. We’ll see what shakes out.

Update: Patreon have backed down for now.

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4 Comments on “Patreon payment changes and what they mean for you”

  1. Madness. The whole POINT of Patreon was allow many-to-many connections between patrons and creators, with the middle-man aggregating the incoming and outgoing payments to minimize processing cost.

    If you’re going to add a flat per-pledge fee (and a massive one, at that, for small pledges), what purpose does the middle-man even serve?

    Sadly, I have cancelled all of my $1/month pledges – and I had a few.

    1. Nobody objects to them taking a reasonable commission – that’s the entire business model – but this is just ridiculous. I’m hearing from unhappy subscribers too …

      1. It gets worse – I read Patreon’s update where they explain that the cause of this is that they want to move away from aggregated billing, to billing you separately for each pledge, so they can each be billed on the monthly anniversary of you pledging.

        What. The. Hell.

        So Patreon will no longer be a many-to-many service. It will just be a middle-man taking a cut when I make a donation to a creator. Absolute madness, they are removing the whole reason for their existence!!

  2. Amusing in an ironic kind of way, having just read your blockchain book. Until bitcoin arrived, we had no cash equivalent for online value exchange. Now that’s gone. Back to where we were. Any platform hoping to facilitate small exchanges has the unenviable task of choosing who to burden with transaction costs.

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