Patreon Fees Backlash

Digital Rights
,
1

Im not quite sure if this is in the right category.

Patreon is a US website that helps fund creators like YouTubers, podcasters, digital artists, singer/songwriters etc. Creators create a profile and describe what they do and then can add reward tiers. People called patrons come along and then pledge to pay the creator either per post or per month depending on how the creator has their account set up. Patrons will normally pledge according to the reward tier they want, but the minimum pledge amount is $US1. $1 and $5 pledges make up the bulk of patron pledges. Patreon then collects the money, takes out a 5% cut and takes out payment processing fees of 7-10% and pays the creator the first of every month. This meant that a creator’s income could vary month to month based on the processing fees.

Late last week Patreon emailed users to say they were changing the fee structure. From 18 December Patreon will still take their 5% cut when paying the creators but will add a processing fee to the patrons pledge. The fee they have chosen is 2.9% + 35c, for all payment types - Paypal and credit card. They will take this everytime a patron pays, and for monthly pledges it will be taken on the anniversary date of a pledge instead of on the 1st.

With this new fee structure patrons that pledge $1 will now be charged $1.38. Those that pledge $20 will pay $20.93. Because these new fees will be charged per transaction, if a patron pledges $20 to only 1 creator they will get charged the $20.93, but if a patron decides to support 20 creators at $1 each they will pay $27.60. Because this change disproportionately affect those that make low or multiple pledges, the change has caused anger from both creators and patrons.

For patrons that dont have much money this means they have to start cutting back who they support in order to stay under budget. Some creators have already shown screenshots of dozens of patrons ending their support as a direct consequence of the new fee structure, and it hasnt started yet. Many creators are willing to pay the processing fees themseves but this won’t be an option.

Many have done the maths. I’ve seen an example based on a creator that uses Paypal. After Patreon and Paypal get their cut of a $1 the creator gets paid 85c, with this new fee structure the patron pays $1.38 and the creator gets paid 95c. The patron is paying 38c to give the creator an additional 10c.

Patreon has become essential for many YouTubers after the adpocolypse this year, and now they are concerned about loosing more income after this Patreon decision. There are several YouTube videos that go into more detail.

This is the Patreon blog post attempting to explain the change: Patreon Fee Explainer

4 Likes
2

I’m not too familiar with the site, but it hardly seems to be in the spirit of the website. It’s a shame they can’t come up with more intelligent solutions for their payment processing, a partnership with a major payment processing provider for example

2 Likes
3

Many are saying they are trying to fix a problem that isn’t there. The new fees will also make it difficult and expensive for overseas patrons taking into account foreign conversion fees for those that pay by credit card and the addition of VAT/GST for those countries that add it on to payments.

1 Like
4

Probably why some of my Youtube friends who post hunting and fishing uploads have moved to Twitch TV . The were demonitised and no adds were shown on their Youtube channel . I subscribe to them on Twitch now .

1 Like
5
2 Likes
6

Patreon’s done a complete backflip and has left everything the way it was for now until they can figure out how to make it fairer for the lower pledge amounts. In the meantime they’ve apologised to the creators who have lost patrons, which doesn’t exactly help now that they’ve lost part of what little income Patreon actually generates for the average creator account.

Seeing as they’re already taking a cut of each pledge, there’s really no need to add a fee to each transaction. It basically adds up to double dipping. Creators know that they won’t get the full amount for every dollar pledged, it’s how the platform works. Sounds more like an excuse to just pocket a few more pennies for themselves while trying to make it look like they’re doing everyone else a big favour. Now they’re in damage control mode for not thinking about the main source of their own income, which is the contributors themselves who are the biggest losers in the new system.

5 Likes