10 Things To Know About Patreon, The Crowdfund Where Fans Have Paid Artists $350M So Far
The internet has disrupted media and transferred power from traditional gatekeepers to artists and creators who were historically excluded from having an audience.
Today, anyone with desire and talent to create content and present it to an audience can do so via YouTube, blogs, tweets and live streams.
“Unfortunately it’s a scant few who are actually able to quit their day jobs and make a living doing it,” says Barry Schuler, a film and TV producer, and venture capitalist at DFJ Growth Fund.
Launched in 2013, Patreon is a crowd-supported service that’s getting a lot of buzz. It allows fans or patrons to pay artists directly. This gives financial support to artists, writers, podcasters, musicians, journalists, game developers, models and other entrepreneurs. Patrons can pledge a monthly or per-post subscription in exchange for access to new, often exclusive work from the creator they’re supporting.
— Tubefilter (@tubefilter) May 8, 2018
DFJ participated in Patreon’s series C round so there’s a vested interest in saying good things about Patreon. “We felt they were addressing a burning need in the market,” Schuler wrote in Medium. “The insatiable demand for great content combined with an exploding class of creators who dreamt of making their passion their life’s work was a big opportunity looking for a solution. The missing element was an economic engine to bring those forces together, until Patreon.”
10 Things you should know about Patreon.
The Patreon business model was founded by a musician
Musician Jack Conte co-founded Patreon with his college roommate, Sam Yam, in 2013 after he saw the need for a new business model. He and his lead singer (and now wife) Nataly Dawn, had a huge fanbase for their group Pomplamoose. But advertising revenue from their YouTube videos wasn’t enough. “Something was very wrong,” Schuler wrote in a Medium post:
“That’s when lightbulbs went off in Jack’s brain. Jack saw rabid fans who loved their music, came to live performances and clamored for new content. If he could create a way for those fans to become regular patrons of Pomplamoose perhaps a new business model for creators could emerge.”
Content creators get paid directly by their fans
Content creators get paid on Patreon for webcomics, videos, songs, “whatevs” by their fans or patrons. Patrons pay a few dollars per month or per post. Artists get paid every month, or every time they release something new, according to the Patreon Zen desk:
It’s “a way to join your favorite creator’s community and pay them for making the stuff you love. Instead of literally throwing money at your screen…”
The platform has raised an obscene amount of money from investors
Patreon has raised more than $100 million from investors since its launch five years ago, according to Crunchbase. Here’ the breakdown:
- Seed round, announced Aug. 1, 2013: $2.1M from 9 investors.
- Series A, announced June 23, 2014: $15M from 14 investors led by Index Ventures
- Series B, announced June 23, 2014: $30M from 6 investors led by Thrive Capital
- Series C, announced Sept. 14, 2017: $60M from 6 investors led by Thrive Capital
How Patreon is growing
Patreon says it has paid out $350 million to creators since its founding in 2013. The company expects to pay out $300 million more this year, according to Tubefilter. The platform’s total number of financially active creators doubled over the past year, according to Patreon — to 100,000 creators and 2 million patrons, respectively. (In 2017, Patreon had 50,000 monthly financially active creators and 1 million monthly patrons).
— Patreon (@Patreon) May 5, 2018
Creators can make 10,000X more per fan than on ads
Patreon fans often pay $5 per month to each of their favorite creators, who make 50X to 10,000X more per fan than on ads, according to Tech Crunch. In exchange, creators offer the art they’ve made that month, reserving premium access and rewards to those who pay more. Thirty-five creators made more than $150,000 in 2016, and thousands earn more than $25,000 a year.
Patreon tried to raise fees but changed its mind after users complained
In December 2017, Patreon announced a service fee that would be charged to the patrons rather than all fees being paid by the creator. Some creators complained when they saw their fanbase withdraw small pledges in response. Under the new payment model, a $1 pledge would have cost a patron $1.38, and a $5 pledge would have cost $5.50, representing a 38-percent and 10-percent rise. There was a backlash, a loss of many pledges for creators, and Patreon apologized.
“We messed up. We’re sorry, and we’re not rolling out the fees change.” — Jack Conte
Advait, you are unreal. But somehow real. Keep it up! https://t.co/BQlXaPY80Z
— Patreon (@Patreon) May 2, 2018
Youtube view suppression, demonetization helping Patreon
Well-know Youtube creators like Philip DeFranco and Casey Neistat are looking at new platforms. DeFranco is threatening to leave YouTube (something he’s suggested in the past), and Neistat is teaming up with Patreon co-founder Conte for a “billion-dollar idea,” according to a new video, Polygon reported on April 17.
View suppression refers to videos not appearing for a creator’s regular viewers on the homepage, on trending or in the recommendation tab. Demonetized videos that fall under mature categories — topics that might make advertisers skittish — are also kept from trending, the homepage and the recommended tab, according to Polygon.
Patreon considered one of best Kickstarter alternatives of 2018
Patreon made Floship‘s list of “13 of the Best Crowdfunding Sites and Kickstarter Alternatives of 2018 that you should know about.” It’s different from the other crowdfunding sites, Floship reported.
“It’s not for everyone, but it can be especially attractive to those who create new media or other forms of digital content on a regular basis. Because of Patreon’s subscription nature, success on the site and the strategies to fundraise require different tactics than the launch-style strategies used on platforms like Kickstarter and Indiegogo.”
Hype and the average pledge — $12 per patron
Patreon says on its homepage that the average pledge is $12 per patron. The platform lets creators hide the amount of money they are actually making, although the number of patrons is public, according to Creator Hype. Recent data shows that most creators make less than $100 a month from Patreon.
Patreon now has 79,420 creators, according to Tom Boruta, a developer who tracks Patreon stats under the name Graphtreon. About 80 percent of creators share publicly what they earn, The Outline reported. Of those creators, just 2 percent earned the equivalent of federal minimum wage of $7.25 an hour, or $1,160 a month, in October 2017.
The top creators on Patreon
These are the top creators on Patreon, according to data from Graphtreon, with best-guess estimates on income “based on a creator’s number of patrons, and the earnings of similar creators that do publish earnings information”.
The most popular creators include:
In a video, Patreon co-founder Conte predicts that, by 2028, “being a creative person is just going to be the norm”.