Patreon and Facebook
Brandon Gomez (via Hacker News):
The number of active patrons supporting artists on the platform in 2019 has seen significant growth, up 1 million over the last year, the company said. The company is also on track to pay out $500 million to content creators in 2019, pushing the company to surpass $1 billion in payouts since its inception in 2013.
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Patreon CEO Jack Conte said in an interview with CNBC that the platform will soon be facing the challenge of maintaining a profitable model as the company continues its growth.
“The reality is Patreon needs to build new businesses and new services and new revenue lines in order to build a sustainable business,” Conte said.
This is the bizarro upsidedown that capital lives in. Their existing model, handle the logistics of subscription service for businesses too small to handle them directly, is the definition of sustainable. It scales up ridiculously well.
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So Patreon has made around $55m in revenue since 2013. If their startup money had been a loan they’d have probably paid it back by now and would be operating a pretty sustainable service.
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So Patreon has made around $55m in direct revenue, but they’re in hock to Thrive Capital for ~$107m, and Thrive doesn’t just want their money back with interest.
Facebook began expanding access to its Patreon competitor last night, giving more page owners the ability to start offering content to their subscribers for a monthly fee. But it doesn’t take much digging to see that the terms for Facebook’s feature, known as Fan Subscriptions, make for a bad deal for creators, giving Facebook a lifetime license to use their work and the right to take up to a whopping 30 percent of subscription fees.
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For now, page owners get to keep the entire subscription fee. But Facebook plans to begin taking a cut once the feature formally launches, and its terms of service allow Facebook to take up to 30 percent, with 30 days notice of the change. That cut is standard for an app in Apple’s or Google’s app store, but it’s giant for a creator-focused platform: Patreon takes just a 5 percent share of a user’s pledges.
Update (2019-03-22): Patreon:
We’re announcing new creator plans, which will be available later this spring. Current creators on Patreon will see no change to the fees they pay or the features they have, unless they are interested in some of the new stuff we’re launching!
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Crazy and sad to see such a simple service start to circle the drain because they got greedy. I mean how the hell much money could it possibly cost to run Patreon anyway? I often get the feeling that a lot of these tech startups are actively looking for ways to waste money instead of creating a sustainable business (I was surprised when an acquaintance who works at Etsy told me that they have over 1,000 employees... I wondered what the hell do all of those people DO? And this was 5+ years ago).
Whatever, though... it seems like it will be fairly easy for someone else to replace Patreon? I mean there's really no reason that I can think of why any of the creators that I pay via Patreon would need or want to stay on the service if it goes downhill. All Patreon basically does is make it easy to take recurring payments from users and segregate the categories of content that various payment tiers get access to (for creators who use that model).
And why does it seem like EVERY service wants to turn themselves into some kind of "social network" instead of just focusing on offering an excellent product?
