The Matter of a “Few Dollars”

9 Dec

So. Let’s talk about Patreon.

I’ve been doing this for a while now. And by “this,” I mean scrambling across creative projects like a tapdancing spider, looking for The One that will resonate with enough people to make self-employment profitable. In late 2013-early 2014, two things happened which allowed me to make creative projects my full-time job. The first of these was publishing Maker Space, the second Rachel Peng book; sales of Maker Space were similar to those for Digital Divide, and proved that investing my time and energy in prose could pay out.

And there was Patreon.

I had a few friends using it, but I was unwilling to commit to the platform. You have to understand–I had seen this kind of thing before. Micropayments, subscription services? Good for attracting the occasional small donation. As I wrote at the time:

The handful of hours it would take for me to read up on Patreon’s history, learn how to use its services, integrate it into my site, and push it on the readership? These would certainly pay off if Patreon attained Kickstarter levels of brand awareness among the community. If not? I’ve thrown those handful of hours away.

Time and energy are as precious as money to a freelancer, mostly because we turn time and energy into money. To me, Patreon seemed too good to be true. Then Jon Rosenberg told me I was a poop if I didn’t start one, and I hate to prove Jon right or be a poop, so I started poking around on the site and then I suddenly had a live campaign.

It was great. It was amazing. It was a supplemental source of income for me and many other creative professionals for three years–for some of us, it made enough money to become an actual living wage!

And, yeah, it turns out it was too good to be true. Last week, creators were told there would be changes to the fee structure:

ck

Screenshot of email from Patreon to creators

As I’m not that bright in general, and Especially Not Bright when it comes to math, my first response was that this was a minor change which would drive some Supporters away due to a (very reasonable) reluctance to pay an additional service fee. Then, smart people on Twitter went to town and broke it down for the rest of us using very small words, and you could see everybody slowly realize in real time what this actually meant in terms of changes to the existing fee structure. It was bad.

updatedfee

Table by Twitter user Ben Wolfe

It was especially bad for Supporters who pledge to multiple creators at $1-$5 increments. If a Supporter pledged $1.00, then 2.9% + $0.35 per pledge would mean that pledge is bumped up to approximately $1.38.

Follow-up clarification from Patreon about this new fee structure made a bad situation worse: Supporters would be charged separately per instance, which had repercussions if a creator used output instead of time (e.g.: was paid per comic, instead of once a month). Each pledge would also be processed separately, meaning that service fees on the credit card company’s side might be applied. (Here’s a little more about the specifics.)

Creators were furious! As I wrote in my public post on Patreon:

Small-dollar pledges are highly valued by creators. We know that sometimes a dollar is all you can spend to support someone who’s making projects which bring you a little bit of joy. Or, spreading single-dollar pledges around a hundred different creators each month is how you choose to show your support. We appreciate every single dollar: a dollar out of your pocket is a dollar which goes to pay our bills. I am happy to continue paying Patreon’s service charge myself to ensure that this transaction is as fair and as straightforward for my supporters as possible.

Naturally, Supporters were also furious. They began canceling pledges and leaving Patreon in huge numbers. Twitter is full of screenshots of creators’ “Exit Surveys,” where a Supporter can leave a comment about why they’ve decided to end a pledge. It’s supposed to help us improve our services and content, but right now it’s just a chronicle of an angry exodus.

It gets worse. Patreon had a clarification of the business model in which they said the quiet thing loud—those small-dollar Supporters? Patreon’s business model for corporate growth did not want them! (Which is odd because the minimum pledge you could make was $1 and that was a criterion set by Patreon itself but I digress…) Instead, an article about Patreon’s growth model cited a spokesperson as saying, “We’d rather have our GMV be made up of fewer, but truly life-changed creators rather than a lot of creators making a few dollars.” Additional commentary from that article (previous link) clarifies this statement:

This is because while active FSCs do bring on significantly more Patrons (the fans who support them), they also bring on more Creators. The bigger their success, the greater the aspirational value it carries.

For creators, this perspective and what it implies is devastating. It’s just…We just can’t.

We’re exhausted and disillusioned and a little bit ashamed that we put our trust in a company which pledged itself as putting creators first. Speaking for myself? I should have known better. I lost sight of how Patreon is a company brokering funds and keeping a percentage for itself. It’s not my friend, ally, or even my business partner. It’s a financial broker, end of story.

In saying that, I’m going to keep using Patreon. It’s a platform which allows me to provide bonus content to interested people, and that’s convenient. But it’s also now nothing more than a financial broker like any other, to be treated with suspicion and used because it’s a means to an end. It’s squandered its goodwill with me. I was RIDE OR DIE! for Patreon until three days ago, and would have recommended it to new users above all of its competitors. Now? If you want bonus content? Hey, I’ve got a Patreon.

I’ll soon also have a presence on multiple additional platforms which are similar to Patreon in purpose. These take time and energy to set up properly, and I’m always low on these, but I’m going to make it as easy as possible for former Patreon Supporters to transition to whatever platform is most convenient for them. I’ll post a list of these by the 18th, which is when these service charges are supposed to go into effect. There are rumors that the massive public blowback means this won’t happen, but I’m not counting on this. Fool me once…

Thanks for reading.

(As we’ve fallen through the rabbithole back in time to 2013, I’ll end this by saying I do have Paypal.) 

ETA: Since this post is getting some traffic, do you like to read science fiction? You do? Well! The Rachel Peng books are police procedurals about the first cyborg liaison to the Washington D.C. police department, and Stoneskin is about sentient deep space kidnapping children and getting them really good jobs in the shipping industry. Links are available here.

23 Responses to “The Matter of a “Few Dollars””

  1. Dane December 9, 2017 at 4:35 pm #

    It’s not that I can’t afford to write you an annual check/Paypal for $60, but I liked being able to spread it out, to feel like I was a small drop contributing to a greater monthly whole, providing you with much-needed day-to-day stability.

    I must admit, I’m torn between sticking with @#$! Patreon, just to keep that stability in place for the folks I support; and wanting to ditch Patreon in order to let them know how they’ve pissed me off.

    • KBSpangler December 9, 2017 at 11:38 pm #

      Speaking as someone who LOVES the monthly semi-stability of what Patreon had to offer, I…I dunno. I seriously don’t know. There are so many cost/benefit issues involved in this mess. I have no idea what to do myself. It’s chaos and uncertainty all the way down.

  2. Elaine December 9, 2017 at 11:34 pm #

    Came here from a Wil Wheaton retweet, and was liked the post enough to read to the end (I support a few creators on Patreon, and am annoyed beyond anything with their greed). Anyway, saw your comment about the Rachel Peng books, went to Amazon, was intrigued and bought the first one. I know you won’t get more than a few pennies from that, but when I like an author, I tend to buy everything, so you never know!

    • KBSpangler December 9, 2017 at 11:40 pm #

      Thank you so much! I hope you enjoy it. Rachel is a ton of fun to write.

    • Rob December 10, 2017 at 12:22 am #

      Also liked the content of this post and decided to buy book 1 of the Rachel Peng books.

      I’ve decided to end my Patreon subscription, I fall into the category of small donations to multiple people. Hopefully I can find other ways to support people.

  3. Steve Jones December 10, 2017 at 12:45 am #

    I have yet to decide what to do with my pledges. Patreon may still end up being the best option in terms of how much of my contribution actually makes it to the creator, or it may not. Figuring it out seems to be a lot of work for both the creator and the patron.

    I wonder if anyone’s working on a site where you can enter a pledge amount and what services the creator has, and it will have a go at working it out…

  4. Shawn December 10, 2017 at 6:02 am #

    Here as well because of the Wheaton retweet. This is a pretty good breakdown, and I can see why they did it this way, and I can see why patrons are upset. Thirty odd cents doesn’t always seem like much, but it can add up. Plus I imagine a lot of people dislike the change on principal alone, getting charged to give money to creators leaves a bad taste in our mouths. It still seems like the best option for now, I just hope that the ones who left initially return.

    • sheer_falacy December 11, 2017 at 5:51 am #

      It really doesn’t seem like the best option. Frankly it seems like the worst option. They’re getting bad press, giving more money to the credit card companies, and in exchange they’re getting… some really minor benefits. Mitigating the credit card overhead for supporting multiple creators was part of the point of Patreon and they’ve ruined it.

    • MOW December 11, 2017 at 2:54 pm #

      Isn’t 35c + 2.9% exactly what PayPal charges per transaction? So Patreon is now 5% worse than PayPal.

  5. abercrombie69 December 11, 2017 at 9:04 am #

    Redirected here by Mr Wheaton.

    Read your post, ouch. A friend of mine publishes on Amazon and they’ve done some shady stuff to her, so not good to see Patreon stooping this low.

    Bought book #1 of the Rachel Peng series last night on Amazon UK. Read it until 4:30am. Bought the others as well. Thank you for such an engrossing read & a Monday at work on four hours sleep!!

  6. FotS December 11, 2017 at 5:42 pm #

    I am also one of those that contribute a little to several and this change will cause me to drop Patreon (I’m very sorry). I’m waiting until the 18th, though, just in case they rescind, though I doubt it. This was definitely not a good way to go about it, but after reading some of the material on what they’re trying to accomplish, I’m not actually surprised anymore.

    I think at this point I’ve bought all of your books except for Stoneskin (so far), but I’ve done it through what you refer to as your store, not Amazon, so I hope that gives you a larger cut of the sale as profit.

  7. Graycat December 11, 2017 at 10:35 pm #

    I’m just waiting for my creators to give me a list of other options. This whole thing has been handled so badly that the other options would have to cost a lot more than Patreon to keep me her. Screw them.

  8. M.A. December 11, 2017 at 11:58 pm #

    My Patreon contributions go to 8 people; when I find out how much more I’m paying out at the end of the month I’ll probably drop at least a couple to keep my total contributions under budget, or maybe I’ll just cut everybody back a buck. I’d be interested in investigating the other platforms you mention above. Don’t these dickheads get it that right before Christmas is a vary bad time to make this kind of announcement? Aaargh.

  9. Erik December 12, 2017 at 10:57 pm #

    I’ve been a long-time reader, since before you were drawing eyes. 🙂 I’m also backing about 45 creators on Patreon, and this change is pushing up my monthly payment by about 20%. 😛

    My current plan is to complain loudly to Patreon (done ftm) and… wait. I understand drip will be launching early next year; hopefully that will be a good platform to support large numbers of creators with small donations each. I will let the short term sort itself out and make my move one way or the other in January.

    As I see it, this is Patreon changing from a good model to a stupid model to solve a problem for a small percentage of its creators, and in the process screwing over the vast majority of its patrons. The good model was to aggregate all of its pledges, so that it made one credit card transaction per month and the per-transaction fee could be spread across all the pledges. The new model is to make one transaction per pledge, so that they can pay N times as many per-transaction fees. O_o This truly screws over the patrons (like me) that make many small donations, as the fees on a $1 pledge go from ~3-10% (depending on how many pledges the patron makes) up to 38%. The associated change from creators paying the fees to patrons paying the fees just confuses the issue, and is again something no one asked for.

    If you do a full analysis, the patrons pay more, the creators get more money for a given pledge amount but a smaller percentage cut of the actual money paid by the patrons, and the credit card companies get a huge windfall of almost all of the increase in patron payments. This was STUPID.

  10. Bookworm December 13, 2017 at 5:33 pm #

    What makes issues like this particularly stupid is that _it’s almost all automated_. They don’t have to have a huge expensive office and scores of employees. Almost everything Patreon does could be handled by less than 10 people over a 24 hour shift period – from their homes. (About the only need for real people is for answering questions via email or chat, or at worst, a phone call) Their cut is/was almost all found money. What usually signals something like this is a chance to be greedy and try to hide it due to a busy time of year. “Man, I thought that I’d be at a million a year by now for sure. How can I get closer?” It could also be because their processing company is playing games, but they could _say that_ and people might be more apt to forgive them for the changes. The worst thing that they could do – they did. They claimed it was ‘for the peepul’. (The creators, in this case). You know, the same excuse for violence since forever. “We did it for THEM!” Abrogation of personal responsibility.

  11. zapster December 13, 2017 at 6:17 pm #

    I wonder how hard it would be to create a sort of worker-owned co-op version? Maybe where creators and supporters have full access to the accounting, vote on how much maintainers are granted, setting the fees by consensus…

    • Bookworm December 14, 2017 at 5:44 am #

      More difficult than you think, simply because you have to involve credit card processing companies. They want a single point of contact, for example. Also, you could end up with a lot of VERY strange decisions being made – just as bad as this one is/was. You’d also have the up front costs of putting together the software back end, the user front end, the creators front end, and the constant security audits.

  12. Chris Patterson December 14, 2017 at 1:28 pm #

    https://blog.patreon.com/not-rolling-out-fees-change/

    Looks like they heard you 🙂

  13. foomf December 15, 2017 at 2:17 am #

    So, it turns out that they’re just VERY BAD at doing business model testing at Patreon right now. One of my supported creators, Alex Woolfson, lives and works a block or so away from the CEO of Patreon, and actually had been a “beta” tester for some new things, but this change wasn’t part of what he’d been testing obviously.

    He had a conversation over what I like to envision as a pastrami and rye watered with tears on the Patreon side… and basically, the biggest problem was this: They have a fraud problem. A LOT of patrons were connecting with fake accounts and fake credit card info … and because Patreon doesn’t do a verification until it does the actual withdrawal, they were experiencing a lot of subscriptions where people joined sometime mid-month, took away rewards, and then fell off when their cards were declined as fake. This was actually pretty big. It was costing good will from some creators and it was costing expected income for distribution to creators, to be low by as much as a million a month.

    However, when regular people who were not frauds joined, especially when they joined late in the month, they would be upset that they only got (for example) a day or two for the pledge, when they were charged immediately. And they became angry and unhappy and left. They brilliantly thought “we can fix this by charging them on a month-anniversary” and instead of thinking it out … and because they have the mistaken idea that their customers are ONLY the creators and not the subscribers who are paying to use their aggregation service, they did not think of subscribers as customers who would end up LOSING the use of that aggregation service, and instead thought of them as bags of money who could absorb the extra cost effortlessly – because the subscribers they had decided they cared about were big-ticket subscribers.

    Because they did not ask, and then did not listen, to their creators and subscribers.

    Then they declared that they would do this, again without asking or listening, and they experienced a backlash like unto that which Netflix felt when they just announced that they were spinning off their less valuable DVD service.

    And they had to back-pedal. Now, any one of you or I might have said, “Oh, just make your gorram service smarter. Ask up front, “Do you want to be charged for a month right now?” and then ask “When do you want to be charged on a monthly basis for all your subscriptions?” — or, if they already had monthly subs, “You will be charged within 15 days for the next month, and we cannot pro-rate your subscription. Are you OK with this or do you want to wait until your next month to receive rewards?”

    That would have required thinking like someone who knows how to do user interfaces though.

    • Bookworm December 15, 2017 at 2:59 am #

      It would also have required taking more than a week to rethink their business model. That’s what bit them on the tuchus. They realized they had a problem, and wanted to fix it RIGHT NOW. (So they could have a full calendar year of the ‘new’ system, rather than in the middle of the year, end of the first quarter, whatever). I mean, I can’t think of anyone that I know of that’s offering a Patreon bonus that isn’t digital. Yes, having that ‘stolen’ isn’t great, but it’s not like something irreplaceable was taken. If they’d sent a notice out to the creators letting them know there was a problem, and that they were trying to come up with ways to fix it – then most of the creators having issues with the money not showing up would probably have understood. They could then get a larger brainstorming pool.

      Personally, I’d look at it in two separate ways. 1) People that want their rewards immediately, and 2) People that want to regularly contribute to a content provider. Person 1) will likely consent to an immediate charge, because they want whatever it is. Person 2) will want an aggregate single monthly billing, and will want to set the date for it. Person 1) _will pay more in fees_, at least the first “month” (and is probably the source of most of the fraud) Person 2) is probably 90% of the market. Person 2) _might_ want to give some spondulix immediately to a new person, but that could be handled as a separate one-time transaction, then convert to a monthly single charge for the next billing cycle.

      They could also have worked with the credit card processors to approve the cards prior to actually charging fees. Heck, this happens in the stores. You swipe the card, and there’s an available credit check that happens before the charge. I’d bet that the processor would consent to that without charging fees. It benefits them just as much as it would Patreon.

      However, in the long run, people running a business are extremely unlikely to actually consult those people most affected by the changes. Firefox/Mozilla is an example of this, but not the only one. In the business world? Adobe, Oracle, and Microsoft. They will _never_ consider changing their mind based on “People that just can’t understand our business, because they aren’t in it”.

    • FotS December 15, 2017 at 4:00 am #

      And if you notice, their whole “we’re sorry” message was addressed solely to the Creators.

    • KBSpangler December 15, 2017 at 3:23 pm #

      I’m watching this discussion with interest and don’t want to derail it, so I’ll just note that when Foomf says

      –” One of my supported creators, Alex Woolfson, lives and works a block or so away from the CEO of Patreon, and actually had been a “beta” tester for some new things, but this change wasn’t part of what he’d been testing obviously.”–

      My fellow creator buddies and I? We talk. We talk A LOT. Email, Slack, forums, etc. Twitter and other public sites are just the tip of the iceberg. And as far as I know? Nobody anywhere has heard of anybody–creator or supporter–who was part of the testing process for the fee rollout, even though Patreon claims it was widely tested with a beta set.

  14. John Hatch February 4, 2018 at 10:11 pm #

    Hey. I bought your books on Amazon kindle and wanted to read your comic as well, so I signed up with Patreon. Then I saw this. I don’t have much money; living on SS and a small veterans disability benefit and paying on a lot of bills, so $1 a month BUT I can do Paypal at whatever range and frequency seem right to you if that is better for you. Speak your preference. Also wanted to point out that working my way through the comic online I was running into what looks like a database problem at about 180 or so. Seems to be working again today though. Just thought I’d mention it in case your day was too shiny and positive. Thank you very much for all your work and for obviously having a good time doing it as well.

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