4 ms·

The benefit is not in the software or service per se. It's in the network effect the existing service already has.

erlend_sh 9y ago
What is the network effect of Patreon? Whatever it is, I don’t consider it to be very strong. Many creators are discovered through their own channels first before their fans learn about their Patreon. OpenCollective made its way into the recurring payments market with relative ease. “All” they needed to do was cater to an underserved niche (open source) that could be serviced better on its own stand-alone platform as opposed to being one of many categories on Patreon. Something very similar is happening with Kickstarter. See Fig as an example of a specialized crowdfunding platform that’s carving its own niche by catering specifically to games. https://www.polygon.com/2017/8/10/16125828/fig-first-profitable-game-equity-investment-kingdoms-and-castles https://www.polygon.com/2017/8/10/16125828/fig-first-profita...
- aargh_aargh 9y ago
  Consider the perspective of the "patreon" (funder). You choose maybe 5 creators you want to watch and fund. With Patreon you have a convenient place to do that - you're spoonfed new content and you enter your payment info to a single trusted third party, not each individual creator. I also assume there are great options for discovering new related content and creators. Disclaimer: I never used Patreon, I only assume that's how it works.
- detaro 9y ago
  It has some network effect in that for users already on Patreon, starting to give money to another creator is a lot more low-effort compared to signing up on yet another site or handing yet another party payment details. Depending on how big the motivation is to give money to someone, that can be significant.
kaffee 9y ago
I agree with @erlend_sh. Patreon _does not_ have much in the way of a network. Its recommendations (if you like this, you'll like that) are typically awful. They're so bad in fact, that I suspect there's some sort of legal/liability constraint. Right now Patreon is a remarkably dumb system with really high fees. That there isn't a serious alternative already makes me suspect that this is isn't a really high profit site in the first place. It could be that dealing with the NSFW creators is really a bid to increase the profit of the site beyond some modest baseline. Of course this pessimistic conclusion suggests the reason why there isn't a bitcoin-based competitor either. The legal issues and the fees are just too high to attract investment.
- raesene6 9y ago
  I guess it depends on what you consider high profit. From https://techcrunch.com/2017/05/18/patreon-pushes-as-youtube-stutters/ https://techcrunch.com/2017/05/18/patreon-pushes-as-youtube-... looks like Patreon has 50k creators and 1M+ patrons. The challenge could well be that whilst they're growing and making money, they're not making enough money to satisfy their VC backers, having taken $47m in funding so far.
- Torgo 9y ago
  Patreon had a competitor, Subbable, which acquired a bunch of Youtube stars before Patreon bought them. >bitcoin-based competitor The problem here is that bitoin is push payment rather than pull, and reducing friction is critical to a subscription system. Bitcoin would require a user taking action every single month to pay, and on time.

What is the network effect of Patreon? Whatever it is, I don’t consider it to be very strong. Many creators are discovered through their own channels first before their fans learn about their Patreon. OpenCollective made its way into the recurring payments market with relative ease. “All” they needed to do was cater to an underserved niche (open source) that could be serviced better on its own stand-alone platform as opposed to being one of many categories on Patreon. Something very similar is happening with Kickstarter. See Fig as an example of a specialized crowdfunding platform that’s carving its own niche by catering specifically to games. https://www.polygon.com/2017/8/10/16125828/fig-first-profitable-game-equity-investment-kingdoms-and-castles https://www.polygon.com/2017/8/10/16125828/fig-first-profita...

aargh_aargh 9y ago
Consider the perspective of the "patreon" (funder). You choose maybe 5 creators you want to watch and fund. With Patreon you have a convenient place to do that - you're spoonfed new content and you enter your payment info to a single trusted third party, not each individual creator. I also assume there are great options for discovering new related content and creators. Disclaimer: I never used Patreon, I only assume that's how it works.
detaro 9y ago
It has some network effect in that for users already on Patreon, starting to give money to another creator is a lot more low-effort compared to signing up on yet another site or handing yet another party payment details. Depending on how big the motivation is to give money to someone, that can be significant.

kaffee 9y ago

I agree with @erlend_sh. Patreon _does not_ have much in the way of a network. Its recommendations (if you like this, you'll like that) are typically awful. They're so bad in fact, that I suspect there's some sort of legal/liability constraint. Right now Patreon is a remarkably dumb system with really high fees. That there isn't a serious alternative already makes me suspect that this is isn't a really high profit site in the first place. It could be that dealing with the NSFW creators is really a bid to increase the profit of the site beyond some modest baseline. Of course this pessimistic conclusion suggests the reason why there isn't a bitcoin-based competitor either. The legal issues and the fees are just too high to attract investment.

raesene6 9y ago
I guess it depends on what you consider high profit. From https://techcrunch.com/2017/05/18/patreon-pushes-as-youtube-stutters/ https://techcrunch.com/2017/05/18/patreon-pushes-as-youtube-... looks like Patreon has 50k creators and 1M+ patrons. The challenge could well be that whilst they're growing and making money, they're not making enough money to satisfy their VC backers, having taken $47m in funding so far.
Torgo 9y ago
Patreon had a competitor, Subbable, which acquired a bunch of Youtube stars before Patreon bought them. >bitcoin-based competitor The problem here is that bitoin is push payment rather than pull, and reducing friction is critical to a subscription system. Bitcoin would require a user taking action every single month to pay, and on time.