Well, hell. Patreon is currently in the midst of shooting itself in the foot.
Brief background for those of you who need it: Patreon is a crowdfunding site optimized for creators. Unlike Kickstarter, which focuses on specific projects, Patreon focuses on the creators themselves. Backers commit to funding individuals on an ongoing basis (either a set amount per month or a set amount per work of art*). In exchange, they receive benefits defined by the creator: early access to comics, patron-only poems, commissioned art, online meet-and-greets, etc., etc., etc., limited only by the creators’ imagination and the supporters’ pockets.
* “Art” being loosely defined here. It could be a drawing, a song, a mechanical object, or anything else the creator produces.
Patreon itself takes a 5% cut of the donations, and up until now, the creators have absorbed the cost of the contribution–the credit card processing fees, money transfer fees, and so forth. To grossly oversimplify, creators received about 75 cents of every dollar donated. More if they had a few large contributions, less if they had a lot of small ones, but somewhere around 75%, if the comments I’ve been seeing are representative. And, of course, the amount the artist receives varies from month to month, as the proportion of small to large contributions changes.
Effective December 18–unless Patreon changes its mind–supporters are going to be charged a fee for each contribution to offset the credit card and other processing charges. Patreon is promoting this as wonderful for the creators, who will now receive 95 of every dollar.
Well, yeah, except that a large portion of the contributions are currently at the $1 level. Those will now cost the supporters $1.38. Supporting somebody at the $5 level? That’ll now be $5.50.
Mind you, Patreon hasn’t officially notified supporters of this change yet, despite the fact that it’ll take effect in a little more than a week.
But they have notified creators and many of them are unhappy.
Seanan McGuire explains why in a Twitter thread.
In brief, she expects many smaller contributions to disappear, leaving her with a small number of larger ones. That’ll turn a reasonably solid support into a classic “rickety stool”: if even one of those larger supporters drops out somewhere down the road, the support is gone and Seanan falls on her ass.
And she’s right.
I’m not one of her supporters, much to my chagrin, because she’s one of my favorite writers, whether I’m reading for pleasure or professional development. But I have a limited amount of money I can afford to spend through Patreon, and so I’ve had to leave out many authors and artists I’d love to support.
With this change, I’m going to have to cut back. Most of my contributions are $1 a month. If that becomes $1.38 a month, it means I’ll have to stop my contributions to a third of the creators. That doesn’t only hurt the artists and writers I’m no longer supporting, but it hurts me as well, because I’m not getting the benefits of supporting all of them anymore.
And I’m sure I’m not the only one.
Patreon needs to rethink this plan and quickly. Granted, complaints are always louder than compliments–but I’m not hearing any compliments about Patreon’s plan. Not from patrons, not from artists.
If the only people who approve are Patreon’s staff, that doesn’t bode well.
Let’s be blunt here. In most businesses, credit card processing fees are part of the cost of doing business. You factor that in when you’re setting your prices. That’s why some businesses don’t take credit cards or offer a discount for cash purchases.
So here’s a thought: Patreon could smooth out the monthly variation–which they’re touting as a major benefit of their planned change–by taking a slightly larger cut from artists and using the money to cover the processing fees. And on the other end, treat patron contributions in bulk to minimize the fees*.
* Again speaking bluntly, they’re already doing this. If I make ten $1 contributions, they charge my credit card for $10, which would make the processing fee 64 cents (2.9% + $0.35). They’re not making ten separate charges with an aggregate $3.80 fee, and claiming they are is damn insulting when I can look at my credit card bill and see otherwise.
I can’t speak for all the creators, of course, but I’d be willing to bet that the majority of them would rather get 90 cents of every dollar from their current supporters than either 95 cents from a much smaller group, or the current 65 to 85 cents.
I’m sure there are other ways to solve whatever funding crisis Patreon has. But pissing off your customers is a less-than-optimal approach in any business.