Hi everyone!
First off, I think the world owes a lot to Patreon. Patreon has enabled hundreds of thousands of creators to make some level of income directly from their fans. This has meant that creators weren't solely dependent on being 'advertiser-friendly' on monetization platforms and have been able to create content on Twitter, Discord or any number of other methods and platforms, including itself.
When people were getting furloughed in various countries and states during early pandemic times, Patreon was an absolute lifeline for so many people... both for people who needed to earn some kind of income, but also for people who wanted to be entertained.
At it's heart, this is what Patreon does best... it enables fans to pay creators a monthly amount to entertain them. Creators can set different levels of patronage, $1 or $2 per month will give you some level of access, but $15 or $20 a month should provide you with so much more content.
The problem is, unfortunately, a very similar story with a lot of different apps.
Patreon was perfectly placed to grow extremely well... after all, so many creators would mention their Patreon accounts during their videos, or in their account bios. Creators have been continuously advertising for the platform for years. Unfortunately Patreon wanted to grow bigger and faster and so has taken on some much venture capital.
Look at these funding events, the last one was 2 years ago at $155M to bring it to a valuation of $4B. How does a payment processing platform get to be worth $4 billion dollars? The truth is, it isn't... Patreon is now worth about $1.5B.
It's raised $412,000,000 in total but that's now just under a third of the company's value... and those investors need to see a decent rate of return. Do they expect to see 10 times their investment? 16 times? Will those investors push Patreon to launch a public IPO to make their money?
With investors undoubtedly driving a lot of the decisions at Patreon now, the creators and or their fans are likely to be the ones to get squeezed. Patreon's new features are all about locking creators into their platform and increasing the percentage of fees they can extract from those creators.
Patreon's CEO just released this video... it's extremely compelling, he is a wonderful creator:
Jack isn't wrong... creators are constantly harmed by the various platform algorithms. Every time I jump on Instagram the majority of things I see are advertisements and things from accounts I don't follow. These platforms chase growth over everything else, it's getting really hard for people to just enjoy the content they like.
Patreon may solve some of that, but it will absolutely come at a cost to the creator. The exciting features Jack was talking about will cost the creators a higher percentage of their income. These features may increase a creator's audience... but they will certainly extract more from the creators.
Again, Patreon has to provide a decent return on investment to its investors... that is the top priority. If Patreon launched a public IPO, it would be the same thing... public companies top priority is to increase shareholder value.
This comment on Jack's video is perfect...
This post isn't intended to throw shade at Patreon... they've done a huge amount of good for the world, especially during the global pandemic... the problem, as I see it, is with the venture capital model... and I worry that creators will suffer for it.
If you love Patreon and it works well for you, great, that's awesome and I wish you so much success.
If you're worried about Patreon, well, I've got some alternatives for you!
These other platforms aren't exactly the same as Patreon, but they may still work for you.
The first one is obviously our little Hive blockchain.
Patreon requires creators to share a percentage of the revenue that they make. It used to be 5% for people, some people now pay 8% and others pay 12%. As these new features roll out, creators will likely pay their 8% plus 3% for one or more features.
The Hive blockchain is not run by any company. It's run by a group of individuals. The blockchain mints new tokens every day, and the individuals that run the blockchain are paid by that daily minting. Creators are upvoted by their audience for each post, video, photo, review, question answered, micro-blog, etc and creators are rewarded from that daily minting as well.
On Patreon creators receive a monthly pledge from their audience... because monthly transactions are cheaper to process than daily.... but if a creator doesn't create anything that month, they still get paid until their audience gets fed up and unsubscribes.
On the Hive blockchain, creators get voted on the content they create... which usually happens when people consume that content. If an audience really loves a creator, they can set up an autovote system so the creator receives an upvote for all content they create.
This blockchain has no fees on any transactions, so once you've got it set up it is absolutely lovely to use.
Another platform, is our own little gFam.live.
Again, its not the same as Patreon, there is no monthly pledge system.... but once the Interledger Protocol is released, it will likely have a monthly subscription service for all creators. This means that all creative content will be open to subscribers, but only the creators whose content you spend time on will get paid.
Currently though, creators create posts... and receive a percentage of the advertising revenue depending on their traffic and audience engagement.
An audience that really loves a creator can tip them, and or, a creator can create gated-content posts that are only opened with a pre-specified tip amount. Creators can also create tutorials to help people learn, and receive advertising revenue and tips on those... and any user can earn through participation of challenges.
The difference between Patreon, and both Hive and gFam is that top priority. Hive and gFam don't have any venture capital to pay back. As long as people are using Hive... the people running it are happy, and gFam is aiming to be a public good. Neither Hive or gFam need to make a profit, and they definitely don't need to 10x investor ROI.
I'd argue that growth as the primary goal makes platforms worse. The primary goal should be to make both the creators and their audience's lives better and easier.
Thanks for reading!
Posted from my blog with gFam : https://gfam.live/blog/patreon-is-changing-for-the-better
