After days of backlash, Patreon is rolling back its plans to introduce a new service fee that posed an existential threat to the way indie artists do business on the platform.
Patreon is a subscription-based crowdfunding platform where “patrons” pay artists, musicians, writers—anyone who falls under the term “creator.” Patreon announced updated service fees last week that would offload charges from creators and put them on patrons. The charge—2.9 percent plus $0.35 per pledge—was supposed to go into effect on Dec. 18. It was meant to replace the current 5 percent flat service fee per pledge that is covered by creators. While the new fee doesn’t seem bad at face value, it would have all but eliminated small, $1 or $2 pledges—amounts many creators rely on to stay in business.
In a blog post titled, “We messed up. We’re sorry, and we’re not rolling out the fees change,” Patreon CEO Jack Conte acknowledged that the service’s new pricing scheme caused some creators to lose patrons and even shut down their accounts, “Many of you lost patrons, and you lost income. No apology will make up for that, but nevertheless, I’m sorry.”
The new fee was supposed to simplify things for creators by ensuring they take home 95 percent of every pledge. With the current 5 percent rate, artists lose 7 to 15 percent of their earnings, factoring in fees from payment processors like Stripe or Paypal.
But charging an additional $0.30 per fee regardless of the amount meant patrons would pay proportionally more making smaller pledges. For larger amounts, the new fees weren’t an issue—pledge $20 and your total bill comes to just $20.88. However, pledging $1.00 meant paying 30 percent more than originally intended. For patrons, it was like finding a great deal on a product only to learn of massive shipping costs.
Aware of the effect the charges would have on their channels, many Patreon creators threatened to leave the platform for alternatives like Drip and Ko-fi. The backlash on social media was swift and unrelenting.
Users are now applauding the company for changing its mind.
Big shout-out to @Patreon for cancelling their idiotic new Service Fee payment system. It was a bad idea from the start and you listened to us to make things right. Please don't ever do that again. Thank you.— DiGi Valentine (@DiGi_Valentine) December 13, 2017
New Who Dat in 20 minutes.
For others, it’s already too late.
So happy that @patreon has decided not to implement that terrible fee structure change. A lot of damage done in the last few days though. Will take a while to recover.— clarkesworld (@clarkesworld) December 13, 2017
So Patreon decided to go back on their fee changes after already costing creators money – and this change back is now going to cost creators even more money. So glad I decided to just shut it down instead of dealing with a company that has no idea what it is doing.— J. R. Cook @ BlizzPro (@Eldorian) December 13, 2017
The company’s CEO told the Verge that it will still change the current service fee and would provide details in a separate blog post.