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Patreon Introduces New Tiers for Creators. Can It Avoid Another “Fiasco”?

19 March 2019

From Fast Company:

In 2017, Patreon rolled out a new fee structure. Today’s it’s known internally at the company as “the fiasco.” A revolt from creators and patrons prompted it to retreat almost immediately.

Today, Patreon, which is valued at a reported $450 million, is trying again. It is announcing Patreon Lite, Pro, and Premium as a means to tailor fit its services to the needs of the platforms’ 100,000-plus creators. “We wanted to make sure and do right by the creator base that’s been with us for all these years,” says Wyatt Jenkins, SVP of product at Patreon. “I’ll talk to a painter with 50 patrons and then later in the afternoon, I’ll talk to a media company with 25 employees that makes over $1 million a year. So it’s pretty clear that [Patreon is] not one product anymore.”

Every creator with an existing Patreon account will automatically be grandfathered into the Pro tier with no changes being made to their account. Essentially, this new system is giving creators the option to pare down with Lite (which is meant to be the easiest onboarding option for creators who just want a page with no tiered benefits for patrons) or upgrade with Premium (which charges an additional $300 per month charge in exchange for services like team accounts and a dedicated partner manager). Patreon’s cut–5% in Pro and 9% in Premium, respectively–will also be locked in for existing accounts but will increase to 8% and 12% for new ones created after these membership plans officially launch in May.

. . . .

In addition to the tiered membership, Patreon also announced changes to its processing fee structures: Pledges over $3 will be charged 2.9% plus 30¢ per payment. Anything below $3 will be charged 5% plus 10¢ per payment–the latter being a direct response to 2017’s “fiasco.”

Patreon’s 2017 changes to its fee structure were met with instant backlash because the processing fee was heaped onto the patrons instead of being taken out of the creator’s account (with no ability to opt in or opt out). In addition, the proposed fee of 2.9% plus 35¢ disproportionately affected anyone pledging between $1 and $3. As TPR Jones accurately summed it up in his tweet at the time: “Pledging $100 to one creator will now cost $103.25, which is reasonable. Pledging $1 each to 100 creators will now cost $138, which is not reasonable.”

. . . .

“Creators don’t want somebody in between them and their fans,” says Jenkins. “What I learned and what Jack learned and the way we’re doing this new rollout out is the business relationship is between us and creators. We are a membership platform that empowers a strong relationship between creators and their fans.”

. . . .

The primary complaint comes down to a lack of flexibility in even this three-tiered offering. Qaadir Howard started his Patreon account about two years ago in response to YouTube’s exorbitant cuts in their payouts and its demonetization of non-family-friendly content. In reviewing Patreon’s new offerings, Howard isn’t particularly moved to upgrade his account to Premium, even though he, like many other creators, could benefit greatly from the services offered with it.

“I don’t know if I’d be willing to pay $300 for it–that’s a car note,” Howard says. “I think they should have it where it’s more à la carte: Let me pay for the thing that I want instead of it just being a flat $300, and maybe I need only one thing.”

Link to the rest at Fast Company

Advertising-Promotion-Marketing, The Business of Writing

2 Comments to “Patreon Introduces New Tiers for Creators. Can It Avoid Another “Fiasco”?”

  1. I’m more interested in whether they will alter their rights-grab paragraph, as PG pointed out in an earlier article about Patreon. (https://www.thepassivevoice.com/the-beginning-of-the-end-for-patreon/)

    I have been extremely reluctant to put more fiction on my Patreon account since I asked Kris Rusch about this (in a comment on her blog), and she said she never posts fiction there.

    Costs of services may be justified, but rights granted simply by accepting the Terms of Service are not.

  2. A few weeks back I pointed out that the fundamental problem with Patreon is that it is caught between its investors and its small number of clients. Patreon is being forced to monetize a niche that is too small, so they have no choice but to jack up costs.
    https://the-digital-reader.com/2019/02/07/the-beginning-of-the-end-for-patreon/

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