Patreon fee structure changes
Dec. 7th, 2017 11:04 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
artsyhonker posting in ![[community profile]](https://www.dreamwidth.org/img/silk/identity/community.png){kind=small}
crowdfundingThere are some structural changes to the way Patreon charges fees. They're now charging a minimum surcharge on every pledge, plus a percentage, to the patron. So if you pledge $1 it works out at $1.40-ish, or similar.
The exact numbers aren't that important. The problem, and what I see a lot of people up in arms about over on Twitter, is how this is going to affect patrons who are already pledging the minimum (currently $1) and are on a limited enough budget to not be able to afford a roughly 40% increase in price.
I also think that this will slow down the rate of new pledges: there's nothing that puts me off spending money more than being told one price, and then getting told another price at checkout because some random list of fees got added on. (And I grew up with provincial and federal sales tax being added to things after the price tag, so this isn't a new experience for me.)
My plan at the moment is to lower all my reward tiers such that patrons can pay the same as they were paying before and get the same thing. I obviously can't do this with the $1 patrons; I have comparatively few of those, so personally I'm... probably not going to be hammered too hard by this. But it's still not great.
I have a few ideas for how to deal with this. I don't know if I'll implement them, but others might well want to.
Bandcamp has a subscription service whereby you can pay an amount per year to get access to everything that artist records. The revenue share is pretty reasonable, and the subscriber doesn't have to pay any surprise fees.
Liberapay is a new-ish, crowdfunded crowdfunding site: the site doesn't make a profit but is funded in the same way that people crowdfunding through it are. It lets you specify your revenue goals in weekly terms. I think it works by patrons depositing a certain amount of money and specifying how much they want to go to whom and when, and then it just... does that until they run out of money, at whch point they need to deposit more. Harder for monthly budgeting for patrons, but great if you get a windfall and want to spend it on some artists; and it does keep the transaction fees lower for everyone (and lets Liberapay, presumably, make some interest on the carried balance? I don't know if they actually do this). I believe donors remain anonymous to receivers, which has advantages and disadvantages; you can't use this to give special gifts to subscribers.
I think most people here probably already know about Ko-fi and Paypal.
The thing I don't like about any of these solutions is that none of them are pay-per-work subscriptions, and that model is extremely helpful for me. If any of you know of crowdfunding platforms that are pay-per-work, please let me know.
In the meantime: this is a good lesson in why it's a good idea to make sure you keep in touch with your fans (or patrons or whatever) through some means other than whatever platform they happen to be giving you money on at the moment, and preferably through some means that you have independent control of rather than it being tied to one platform. Walled gardens are all well and good -- until somebody swallows the keys.
The exact numbers aren't that important. The problem, and what I see a lot of people up in arms about over on Twitter, is how this is going to affect patrons who are already pledging the minimum (currently $1) and are on a limited enough budget to not be able to afford a roughly 40% increase in price.
I also think that this will slow down the rate of new pledges: there's nothing that puts me off spending money more than being told one price, and then getting told another price at checkout because some random list of fees got added on. (And I grew up with provincial and federal sales tax being added to things after the price tag, so this isn't a new experience for me.)
My plan at the moment is to lower all my reward tiers such that patrons can pay the same as they were paying before and get the same thing. I obviously can't do this with the $1 patrons; I have comparatively few of those, so personally I'm... probably not going to be hammered too hard by this. But it's still not great.
I have a few ideas for how to deal with this. I don't know if I'll implement them, but others might well want to.
Bandcamp has a subscription service whereby you can pay an amount per year to get access to everything that artist records. The revenue share is pretty reasonable, and the subscriber doesn't have to pay any surprise fees.
Liberapay is a new-ish, crowdfunded crowdfunding site: the site doesn't make a profit but is funded in the same way that people crowdfunding through it are. It lets you specify your revenue goals in weekly terms. I think it works by patrons depositing a certain amount of money and specifying how much they want to go to whom and when, and then it just... does that until they run out of money, at whch point they need to deposit more. Harder for monthly budgeting for patrons, but great if you get a windfall and want to spend it on some artists; and it does keep the transaction fees lower for everyone (and lets Liberapay, presumably, make some interest on the carried balance? I don't know if they actually do this). I believe donors remain anonymous to receivers, which has advantages and disadvantages; you can't use this to give special gifts to subscribers.
I think most people here probably already know about Ko-fi and Paypal.
The thing I don't like about any of these solutions is that none of them are pay-per-work subscriptions, and that model is extremely helpful for me. If any of you know of crowdfunding platforms that are pay-per-work, please let me know.
In the meantime: this is a good lesson in why it's a good idea to make sure you keep in touch with your fans (or patrons or whatever) through some means other than whatever platform they happen to be giving you money on at the moment, and preferably through some means that you have independent control of rather than it being tied to one platform. Walled gardens are all well and good -- until somebody swallows the keys.
Alas!
Date: 2017-12-07 11:34 pm (UTC)Re: Alas!
Date: 2017-12-07 11:43 pm (UTC)Yup. But I've suspected for a while that the 5% cut they get now wasn't going to scale well with lower-value pledges, so I'm not entirely surprised.
Still, they could totally have handled it better.
Re: Alas!
Date: 2017-12-08 12:03 am (UTC)Nice: waive the fee on $1 donations.
Decent and profitable: tier the fee ($.05/$1, $.10/$2, etc.)
Required for not being a dick: whatever the donation level says is what the donor pays. Doesn't matter whether you price it at $5.40 or take $.40 out of a $5 donation, it is misleading business practice to show a lower price but charge a higher one, which has gotten people sued.
Re: Alas!
Date: 2017-12-08 12:11 am (UTC)My preference: just take a 15% cut instead but cover all fees. If the $1 pledges are still unsupportable, raise the minimum pledge -- with months, not days, of notice.
Sigh.
On 8 December 2017 at 00:03, ysabetwordsmith - DW Comment < dw_null@dreamwidth.org> wrote:
(no subject)
Date: 2017-12-08 01:54 am (UTC)Was listing off some alternates to Patreon.
Thank you!
Date: 2017-12-08 02:09 am (UTC)(no subject)
Date: 2017-12-08 04:58 am (UTC)Re: Alas!
Date: 2017-12-08 07:08 am (UTC)But 35 cents 2.9% per pledge on each of a dozen pledges is ridiculous.
Re: Alas!
Date: 2017-12-08 07:22 am (UTC)(no subject)
Date: 2017-12-08 07:38 am (UTC)Re: Alas!
Date: 2017-12-08 10:30 am (UTC)They're working towards charging patrons as soon as they pledge, and then on the month anniversary of that starting-to-pledge. Or if someone has the "pay per creation" model, charge them as soon as a creation is posted. Thus the fee added on each and every pledge.
Since the whole point of Patreon was to support multiple creators with small recurring payments without having to pay transaction fees for each payment, I really don't get what they expect to happen.