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- Date Established
- San Francisco, CA
- Continuous crowdfunding for creators
- Platform facilitates reward-giving
- Fewer content restrictions than some other crowdfunders
- Industry-standard fees
- Limited help section
- No built-in promotional tools
- Some creators report issues when attempting to collect funds
- Fuzzy content guidelines
Patreon is a crowdfunding site aimed at a particular audience: artists and online personalities in the business of content creation. As crowdfunding platforms go, Patreon has enjoyed a meteoric rise in its public profile over the past few years.
Patreon’s approach to rewards-based crowdfunding is unique, setting it apart from the likes of Kickstarter (see our review) and Indiegogo (see our review). With the latter two, backers support creators with one-time pledges in exchange for rewards, whereas Patreon’s model is that backers — patrons, as Patreon refers to them — subscribe to a creator’s content, making recurring payments on an ongoing basis in exchange for access to the content.
On March 19, 2019, Patreon announced that the company would be introducing new creator subscription plans along with changes to how payment processing fees are assessed. These changes will be implemented on May 7th, 2019. I’ll describe these changes in the Terms & Fees section, but know the following:
- These changes will not apply to current Patreon creators
- Any content creators seeking to use Patreon under the old fee system need to launch a creator page before May 7th, 2019
Patreon declares itself a crowdfunding platform for creators, as its platform allows creators to draw a steady, continuous income from The Crowd. This funding model makes Patreon particularly well-suited to creators of viral videos, online journalists, writers, and musicians.
Table of Contents
Patreon was founded in San Francisco by musician Jack Conte and developer Sam Yam. Conte’s oeuvre of music videos was getting a million views per month, yet Conte was only making $50/month through ad revenue on YouTube. He started Patreon in 2013 with the intent to give artists a sorely needed means of monetizing their work. Describing the reasoning behind his company, Conte said the following in a 2013 article:
I’m releasing new things on a monthly basis. I have friends releasing material weekly,” Conte said. “They’d have to almost invent an excuse to raise money after going on Kickstarter once. We’re saying, ‘No, no. Don’t make up a new endeavor. Keep doing what you do best and let people pay you each time you do that.
When you create an account, you’re asked to self-classify your work into one of the following categories:
- Video & Film
- Drawing & Painting
- Crafts & DIY
- Dance & Theater
While Patreon asks you to classify your work, the category you choose isn’t very consequential, as you can produce whatever you like — if people are willing to pay for it, you can do it. Patreon is for entrepreneurs and creative teams engaged in creating content on a continuous basis. Other kinds of projects in need of crowdfunding — non-creative business projects, medical emergency fundraising, etc. — should instead check out the likes of Kickstarter, Indiegogo, and GoFundMe. Patreon’s appeal is somewhat narrowcasted, but if you’re a content creator (or a business that creates content), their platform enables you to get paid directly by the people who consume your content.
Another factor in Patreon’s broad appeal to creators has been that Patreon’s content restriction policies were more relaxed than those of other crowdfunding platforms. However, Patreon seems to be cracking down on certain types of campaigns as of late, and the company’s reputation for being laissez-faire about content regulation has been fading. More on that later.
While Patreon sets itself apart from its competitors by allowing “adult content,” defined as nudity and sexual expression but not pornography (a difficult distinction to make, though Supreme Court Justice Potter Stewart might have disagreed), numerous creators of such adult content have recently found their pages banned by Patreon with little to no explanation.
Terms & Fees
These are the current (pre-May 7, 2019) terms and fees for Patreon’s crowdfunding campaigns:
|Funding Method:||Per month OR per creation|
|Payment Processing Fee:||Comes to approximately 5%|
Patreon’s platform fee of 5% is pretty much the industry standard at this point. On top of that, the payment processor (Stripe or PayPal) charges a fee for each donation made, and these fees generally come out to an additional 5% or less. There are also payout fees to consider — the fees payable when you move funds from your creator balance to your bank or PayPal account. These fees are as follows:
- Direct Deposit: US creators receiving payment: $0.25 fee for every deposit
- PayPal: US and international creators receiving payment: $0.25 or 1% of the amount transferred capped at $20 per deposit
- Payoneer: International creators receiving global bank deposit: This may vary depending on country and currency but will typically be a $3 transfer fee per deposit
Once you’ve taken your page live, you can add posts to your page, which can either be viewable by everybody or restricted to your patrons (at a reward level of your choosing). As for funding, you can choose to either get monthly payments from your patrons or “per creation” payments. You can also set up “goals” that will be reached when your funding level hits a certain amount. These goals are non-binding and can be changed at any time.
Now, as I said in the introduction, changes to this system are coming on May 7th, 2019. As of that date, new creators will need to choose one of three Patreon subscription plans:
- Patreon platform fee: 5% + payment processing fees
- Hosted creator page
- Patreon communication tools
- Patreon workshops
- Patreon platform fee: 8% + payment processing fees
- All the features in Lite, plus:
- Membership tiers
- Analytics and insights
- Special Offers promo tool
- Creator-led workshops
- Unlimited app integrations
- Priority customer support
- Patreon platform fee: 12% + payment processing fees
- All the features in Lite and Pro, plus:
- Dedicated Partner Manager
- Merch for Membership
- Team Accounts
You’ll note that compared to Patreon’s current 5% platform fee, Patreon creators will have to pay more in fees if they want more than just the bare minimum package. Luckily for current Patreon creators, they will automatically be given Pro subscriptions (the features of a Pro subscription are basically what all creators currently get) at the current 5% fee rate — they will not have to pay 8%. Newcomers will get no such deal, however, so if you’ve been thinking about launching a Patreon, sign up before May 7th, 2019 if you can.
Likewise, all existing Patreon creators will be invited to upgrade to a Premium subscription and get a discounted fee rate of 9% (as opposed to 12% for everyone else).
Another change coming on May 7th, 2019, is the introduction of a new system for charging payment processing fees. The previous system was rather opaque, and the new system aims to bring clarity to payment processing charges while not discouraging small pledges (which Patreon’s aborted late-2017 policy changes would have done). Under the new system, the following payment processing fees will apply:
- For pledges of $3 or less: 5% plus 10 cents per successful pledge
- For pledges of more than $3: 2.9% plus 30 cents per successful pledge
- For all pledges from patrons outside the US who use PayPal, regardless of the amount: an additional 1% per successful pledge
According to Patreon, “(t)he new rates may be lower or higher than the current rates, depending on the creator.”
Like the other changes, these changes will only apply to new creators who create their accounts after May 7th, 2019, and will not apply to current creators. Patreon states that the company is “working toward a solution” that allows current creators to opt into the new payment processing fee scheme if they so choose.
These changes are being touted as a way for Patreon to compete with Facebook and YouTube, each of whom is muscling its way into the crowdfunding industry. And while these changes aren’t being met with the same universal horror and derision as Patreon’s ill-conceived 2017 attempt to change the fee system, it remains to be seen how the new policies will affect new creators who sign up after May 7th, 2019. Watch this space!
Like other rewards-based crowdfunding platforms, Patreon lets you offer rewards to your “patrons,” though, unlike Kickstarter, they don’t require it. They do recommend it, however, noting that successful creators tend to offer more than two reward levels. The company suggests the following when considering what rewards to offer:
- Access to your patron-only feed
- Photos/videos of your process
- A live chat with your patrons via Patreon’s mobile app
- MP3 downloads
- Physical rewards (recommended for higher-tiered patrons only)
Patreon’s application process is a breeze. Just start setting up your account, enter some basic personal information, attach your social media accounts, set up a payment method, and you can start earning money for your creations.
Other start-up funding options if Patreon isn’t for you:
|Lender||Borrowing Amount||Loan Term Length||Interest Rate||Origination Fee?||Min Credit Score||Next Steps|
|$1K - $50K||3 or 5 years||8.16% – 27.99%||Yes||620||Apply Now|
|$2K - $35K||3 or 5 years||6.95% - 35.99% APR||Yes||640||Apply Now|
|$25K – $300K||3 – 7 years||0% -15% on first 9 – 15 months||Yes||680||Qualify Now|
Sales & Advertising Transparency
Patreon is transparent regarding its services — I never got the sense that there was anything they were trying to hide or equivocate about.
Customer Service & Technical Support
Patreon has FAQs for creator issues: one for patron issues and one for general issues. For direct support, you can submit a question and Patreon will respond via email between 9 AM and 6 PM Pacific Time.
As for phone support, Patreon offers none. Patreon is still a young company experiencing rapid growth, so they’ll boost their level of customer service with time, one hopes.
You can also try reaching out to them on Twitter for assistance.
Negative Reviews & Complaints
Patreon creators have been reporting a variety of serious issues with the company and its practices over the past year. Despite Patreon’s official policy of permitting forms of “adult content” that fall short of being actual pornography, creators of adult content have faced increasing restrictions on what they are permitted to post and monetize. Many of these creators are facing the loss of their page altogether, often with minimal/vague justification from Patreon.
Another serious issue arose in July/August of 2018 when numerous creators reported seeing dramatically smaller payments than expected due to Patreon declining their subscribers’ payments. Many creators also found that they couldn’t access the remaining funds that did make it through, with “suspicious activity” given as the reason. These same creators often received little explanation or support from the company when trying to work through these issues.
In these precarious times, people increasingly rely on crowdfunding not for a little extra spending money each month but to merely pay the rent and the bills. The company’s handling of these issues is threatening the livelihood and even the health of creators, a disproportionate number of whom find themselves disadvantaged in and marginalized by the broader economy. Given Patreon’s rise to prominence as a lifeline for creators struggling to make it in this predatory world, the company ought to demonstrate a commitment to having its creators’ backs if it wants to maintain its market position.
As far as professional reviews go, a review of Patreon by PC Magazine was largely complimentary of the service but noted that the Help section was not as extensive as it could be. I found this to be true as well, and I’d add that they could make it easier for people to see how funding works, exactly what portion of your funds will go towards payment processing fees, and the like. As it is, that information is all there, but it requires a little digging. PC Magazine also points out the fact that Patreon lacks built-in promotional tools (apart from the ability to add social media links to your campaign). Indiegogo and Kickstarter are superior in this respect.
Another reviewer noted that it’s difficult to get people to make a recurring financial commitment to you — it’s a harder proposition for many than making a one-time donation.
Positive Reviews & Testimonials
The same PC Magazine review I referenced above claims that Patreon’s funding model is ideal for artists and other creators who produce content on an ongoing basis. They also note that Patreon’s platform is open to a wider range of creative content than its competitors.
Other reviews tend to echo these sentiments.
Patreon isn’t the crowdfunder for everybody. If you’re looking to raise funds to launch one particular project, such as the creation of some cool tech gizmo, look into Kickstarter. If you’re seeking funds to help cover the cost of purchasing new equipment for your business, check out Indiegogo or Fundable (or, alternatively, check out online lenders, such as LendingClub, Prosper, Accion, and Kiva and apply for a crowdfunded loan). And if you’re trying to raise money for your friend’s kidney operation, set up a GoFundMe page.
If, on the other hand, you’re an indie video game company, a cartoonist, an author, a podcast host, a musician, or you’ve inexplicably garnered a huge YouTube following by just recording yourself sitting in an oversized gamer chair playing Fortnite while yelling at people, Patreon is well tailored for you. As it can be difficult to get people to make even a small recurring financial commitment to you, it helps enormously if you’ve already built up a large YouTube following and/or a heavy Twitter presence.
Nonetheless, if you (or your business) produce creative goods that inspire people, Patreon’s platform is precision-engineered to help you monetize doing what you already love. It’s a boon to creatives everywhere, it’s easy to set up and maintain, and it’s a reason for renewed optimism about the power of the internet to create opportunities for those who lack an institutional platform but deserve to be heard.
Unfortunately, Patreon’s missteps have called into question its commitment to creators. I’ll be monitoring developments on this front, as Patreon has previously shown an ability to learn from its mistakes, such as when they rescinded their unpopular new fee policy last year after creators objected en masse. And on that front, we’ll see how Patreon’s new fee system works out, as new creators will be faced with either paying higher fees or using a neutered version of the platform.
I’ll end with this: Through Patreon, “dril” of Weird Twitter fame makes more than $2,600 a month creating absurd Tweets and bizarre Photoshopped images. If Patreon can provide the crowdfunding infrastructure to support the livelihoods of future artists like dril, there may yet be hope for our fallen species.
Other start-up business loan options:
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