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Patreon is introducing a new service fee designed to benefit creators, but many users worry it will make patrons more reluctant to pledge.
For those who aren’t familiar, Patreon is a subscription-based crowdfunding platform where “patrons” pay either per post or a monthly fee to artists, musicians, writers—anyone who falls under the term “creator.”
The site previously charged creators a flat 5 percent fee for every payment they received. The fee, on top of the charges from payment processors like Stripe or PayPal, meant artists would lose 7 to 15 percent of their earnings right off the bat. A new payment scheme hopes to reduce those losses, giving creators exactly 95 percent of each pledge they receive.
“Creators often take home a lower percentage of their Patreon income than patrons may realize,” the company wrote on its site. “Standardizing our fees across the board provides consistent expectations and more money for creators on Patreon.”
Starting Dec. 18, patrons will be charged 2.9 percent plus 35 cents per transaction, regardless of the amount. At first glance, that may not seem too bad. A single $20 pledge would cost a patron just $20.88.
The extra cost isn't tiny if you pledge small amounts to many creators. Pledging $100 to 1 creator will now cost $103.25 which is reasonable. Pledging $1 each to 100 creators will now cost $138 which is not reasonable.— James a.k.a TPRJones (@TPRJones) December 7, 2017
But that seemingly innocuous charge could have a huge impact on those who pledge small amounts to many users. Consider a user who pays 30 creators a monthly $1.00 subscription. Now, that patron will be charged roughly 1.38 per charge per creator for a total of $41.40.
The new payment system is already being criticized by creators and patrons alike, who fear the higher returns will be offset by a substantial decrease in the number of patrons making pledges, particularly those who typically pledge a few dollars. Comic writer and Patreon creator Gibson Twist posted to Twitter to say the changes will likely result in him shutting down his account, “I’m not interested in gouging my audience in something I don’t believe benefits me or them at all,” he writes.
Patreon's FAQ on this change reads very "Isn't it great? No down side here!" but this change is almost certainly going to lead to me shutting down my Patreon account. I'm not interested in gouging my audience in something I don't believe benefits me or them at all.— Gibson Twist (@GibsonTwist) December 6, 2017
Meanwhile, just yesterday, they sent me an email talking about what a "mindblowing year" 2017 has been, so I'm not convinced they're hurting for cash.— Gibson Twist (@GibsonTwist) December 6, 2017
Please, @Patreon, don't do this. This will hurt a lot of artists, and I am one.
They're trying to sell it to us as "You get a bigger % of the money!" but a bigger percentage of less money isn't a selling point. Also, are we not supposed to notice the huge spike in how much Patreon takes of my supporters' coin? Is this right?— Gibson Twist (@GibsonTwist) December 6, 2017
Many creators say their shows rely on small payments to stay afloat. In fact, several creators wrote that they would prefer to take the charges on their end than have them applied to patrons.
Dear @Patreon, I will happily continue to eat the monthly costs of using your site; that's part of my responsibility as a creator. Why are you passing that burden on to my Patrons?— Der-shing Helmer (@shingworks) December 6, 2017
I'm really upset about this @Patreon policy change. Patreon, I'd rather pay fees than pass the fees on to my patrons. We signed up for your platform understanding the fee structure.— Bree Mae (@TheBreeMae) December 6, 2017
Patreon pays my bills, but it is an experience curated for my PATRONS. Please advocate for THEM.
Small shows like ours get support from listeners paying a few bucks a month from fans. Many creators believe this will shrink the number of shows people will be willing to support.— Todd Faulkner (@ToddFaulkner) December 7, 2017
Both creators and patrons worry this will discourage people who only have a few dollars to spare from pledging altogether.
Hey .@Patreon, adding a service fee patrons have to pay with their pledge unfairly targets people doing their best to support creators with what they have. I’ll keep paying the service fees if that means more can afford to pledge. Don’t make this harder than it already is.— Ayme ❄️ (@Catcoconutart) December 6, 2017
I would LOVE that if it was an option! I wish they had told us earlier.. We could've given them feedback like this sooner. There is a reason why creators like myself have 1$ tiers, because like you said, that could be all some people can spare. @Patreon @PatreonSupport https://t.co/hmSuyD6fZW— Sam (@sambeawesome) December 7, 2017
The changes to the service fee come at a risky time for Patreon. Last month, Kickstarter announced Drip, its subscription-based crowdfunding service and direct competitor to Patreon. The two services are similar, except Drip projects start with “Founding Members,” a 30-day period where creators offer their first subscribers rewards or offers. Many Patreon users are now threatening to move to the new platform.
I will continue to back the creators I currently back, but will think very hard before backing more - at least on Patreon. If Kickstarter Drip gets off the ground, and people I want to back start using it, I may back them there.— Tsundoku Puzzle (@TsundokuPuzzle) December 7, 2017
We have reached out to Patreon and will update this article if we hear back.
This article has been updated for context and clarity.
Phillip Tracy is a former technology staff writer at the Daily Dot. He's an expert on smartphones, social media trends, and gadgets. He previously reported on IoT and telecom for RCR Wireless News and contributed to NewBay Media magazine. He now writes for Laptop magazine.