Patreon increases his income, but his grandfathers are old creators – TechCrunch

Patreon could not survive by charging all creators only a 5% rake on the monthly subscriptions they earn from fans, while creating commercial tools such as CRMs and derivatives to stay ahead of Twitch, YouTube and Google. But he did not want to screw all his first faithful creators either.

So, today, Patreon is reviewing his prices. Any creator can still get a 5% rate, but only for a Lite version with no bonus tools or different fan levels. All additional features of Patreon will now be included in the Pro package at a rate of 8%, but existing creators will be grandfathered by 5%. And the new 12% business plan (9% for existing creators) will feature full-service merchandise sales, multi-user team accounts, and premium customer support.

If you wish to benefit from lower tariffs with acquired rights, you will have to join Patreon in the coming weeks before the new rates come into effect at the beginning of May.

"With this change, Patreon is a long-term independent company that does not need anyone. That's what we do here, "says Patreon's Senior Vice President of Product Wyatt Jenkins. More sustainable pricing means that creators will no longer have to fear Patreon selling desperately to someone like Facebook who might neglect or exploit it.

Instead, Patreon's CEO, Jack Conte, told me that he wanted to find a balance between powerful features and prices suited to different types of creators to become the agnostic house for subscriptions, when the giants technology are trying to create their own society. "To have a different composition for each distribution platform, it will not work. You need only one location for the bottom of your distribution funnel, "says Conte.

Balancing rates and resources

Patreon now has 3 million fans who pay 100,000 creators at more than half a billion dollars a year and will realize gains of one billion dollars in 2019, after six years of activity. But Patreon was starving at its 5% rate, which some venture capitalists tell me, which is why they submitted their $ 105 million round of financing, led by Thrive Capital and Index. Now it might be enough to keep the lights on, keep the property, and maybe even make a profit someday.

Jenkins told me that Patreon had spent a year talking to more than 1,000 creators about how to redistribute his offer. "People do not like change. But I think that in terms of change, we will be able to invest in different products in different ways. We can put a lot of power into membership, "he says. The company did not want to do any more nonsense as it did a year ago, it changed its payment processing rates, which caused negative reactions from the creators and a certain exodus. "We did something that had an impact on the creators' customers. It was the real land mine we walked on.

Patreon's new rates

What Patreon discovered was that some creators, especially individuals and amateurs, did not care about bells and whistles. They wanted easy and affordable recurring payments so they could focus on their art. Patreon has therefore created the 5% Lite plan that removes additional features while retaining the old rate.

Videographers, illustrators, comedians and more serious experts wanted to offer different price levels for different levels of exclusive content. They need badysis, special offers, integrations with other productivity and business applications, as well as priority customer support in the event of a failure. This is what creators will get for 8%, unless they are entitled to 5%.

But Patreon also discovered that entire media organizations with 50 employees were at the top of his sponsorship platform. They had to be able to share accounts and get immediate support when needed. Meanwhile, many creators view the merchandise as a powerful way to attract fans who want photos, stickers and other promotional items each month. "85% of our creators tell us that we need merchandise. "We spend our days at the post office licking stamps. You can get an excellent leverage of trading through your size, so why do not you help us with that? We can not build that at 5%, "Jenkins tells me. They will all pay the Enterprise Plan price of 12%, unless they maintain the acquired rights at 9%. In return, Patreon will process, package and ship all merchandise.

Patreon also amends its payment processing fees to ensure that it does not over-capitalize small contributions, such as the creator's popular one-dollar-a-month levels. From now on, all transactions over $ 5 will cost 2.9% and $ 0.30 similar to the industry, while microtransactions under $ 5 cost 5% plus $ 0.10. Existing creators benefit from old rates, and people paying via PayPal outside the United States are charged an additional 1%.

The battle for fan subscriptions

Surprisingly, one of Patreon's most popular creators told me that he was in fact dissatisfied with being protected by rights acquired at a lower price, because why should he be given special treatment by compared to other artists who may not be as tech-savvy. That said, they will not voluntarily pay a higher rate. "I guess I'm not surprised," Conté replies. "I've found that creators are really humble and selfless, always thinking about others. I can imagine them saying "What about these people? Why am I paying less than them?

If Patreon manages to control the rate change without interrupting his momentum, he could have a bright future. The trend is favoritism, but the leaked documents show that Facebook plans to charge creators up to 30%, like YouTube, and Twitch, 50%. But with many more restrictions on content and much more mistrust after years of designer abandonment and tense negotiations, Patreon's neutral platform offering the lowest rate could remain the leader in fan subscriptions at a time when advertising revenue shares are proving insufficient to support the pbadion. in their profession.