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Patreon’s new service fee spurs concern that creators will lose patrons

410 points by slyall 9y ago

adjkant 9y ago
This should be at the top of HN. A tech company just cut the livelihoods of artists and many other important groups of people all over an artificial fee. This is disgusting and I hope a competitor beats them out ASAP.
- Gracana 9y ago
  It is both outrageous and unsurprising. This is how these companies ("tech" startups) are incentivized to operate. It is awful to watch this cycle happen over and over and over.
  - jopsen 9y ago
    It also smells like another example of how taking VC money is going to ruin a startup that could otherwise have grown organically.
ocdtrekkie 9y ago
Wow. I only have a pile of $1 pledges right now, and this will significantly increase my bill for almost no gain for the people I'm supporting.
- adjkant 9y ago
  Exactly no gain if I'm understanding it.
  - trowawee 9y ago
    Well, the analyses that I'm seeing suggest they'll see about $0.05 more per pledge. So, not "no gain", but very little gain, and almost certainly some cost as patrons leave the service over the price increase.
    - adjkant 9y ago
      Can you detail that math? I've seen math thrown around all over this thread, much of it contradicting. To me, this seems completely negative: Before: 7-15% net fees - $100 = $93 or $85 dollars Now: 8%+ net fees with near 30% fees for $1 and 10% fees for $10 That math is using net fees when considering the amount the patron pays vs the person gets. Patreon is pulling some shady math by pretending that the patron isn't paying the original fees as part of the total amount. To me, it looks like for nearly all cases, fees are going to increase. I would revise my statement to "loss, not gain", even if all patrons stay on the service.
      - trowawee 9y ago
        Sorry, I should have worded that more precisely. I was basing it on this: https://twitter.com/wombatoverlord/status/938849760198447104 https://twitter.com/wombatoverlord/status/938849760198447104 and various pieces I've read by creators. It looks like creators were averaging around 89% in net fees previously, where they will now be averaging 95%. So, ~$0.05 more on a $1 pledge.
        adjkant 9y ago
        The problem is that that $1 pledge is no longer just $1. It's bait and switch math.
revelation 9y ago
Five percent is already ridiculous, this is just getting greedy. You would think YouTube would finally eat their lunch here but then the CEO over there can't even update her own recently launched channel so fat chance.
- eropple 9y ago
  Five percent is fine for what they're doing (it's not trivial). But this assessment is pretty messed up.
- InclinedPlane 9y ago
  The problem is that google (or alphabet) is just catastrophically bad at most customer relationships (except for ad buyers, though even then it's iffy). They treat all the content creators on youtube like users instead of customers. And they don't care about building a platform, ecosystem, community, etc. that supports the creators, they're willing to just let things flap in the wind and hope for the best.
eropple 9y ago
This is pretty crazy of Patreon. I mean - they can easily bundle pledges on charge. I don't understand why they'd drop a separate charge for each one, except for "fuck it, they won't care, right?".
- Hemospectrum 9y ago
  They can bundle the charges to the patrons to reduce cost to themselves, while still charging fees as if they were making individual transactions. I’m inclined to believe they’re already doing this.
  - eropple 9y ago
    Plausible. Shitty, but plausible. If you're right, I'll be pulling every pledge I have immediately and telling every campaign that I'll happily return once they leave. I guess I'll find out next time they run and I can count number of charges.
  - ocdtrekkie 9y ago
    I can confirm my Patreon pledges to multiple people were charged to PayPal as a single transaction.
    - eropple 9y ago
      Under their new model? I wasn't sure if it's already gone through.
      - ocdtrekkie 9y ago
        Existing charges. But it's hard to imagine Patreon would intentionally triple their service fee costs to themselves by charging pledges individually instead of in aggregate. The only thing that's changing is the service fees they're charging users.
        eropple 9y ago
cdancette 9y ago
I think the clearest explanation of the change is in this tweet: https://twitter.com/TPRJones/status/938646263800705024 https://twitter.com/TPRJones/status/938646263800705024 "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"
- floatingatoll 9y ago
  $138 is unreasonable to me for one simple reason: When I pledge to 20 creators, Patreon batches my pledges based on arbitrary server-side criteria, such that they cannot guarantee how many charges will be made to cover my pledges. So typically I see two charges per month. They can't charge me $0.35 per charge because the # of charges varies without any ability for the customer to predict and cannot be defended reasonably to customers. Instead of revamping their billing groupings to ensure that each patron is charged once per month, they are charging $0.35 per creator, which is the absolute worst case scenario here. So to me, the ripoff is that they charge me for two credit card transactions, but instead of $0.35 per transaction, they charge $0.35 per creator within a single credit transaction - when that $0.35 is not charged to them by their merchant processor for those individual creators. I would have been fine if they'd simply tell me "X creators = Y transactions @ $0.35 each + 2.9% of amount", where Y is virtually always some tiny fraction of X, but that they instead say "X creators = X transactions @ $0.35 each + 2.9% of amount" to avoid regrouping their billing is a misuse of the word 'transaction' as they implement it. EDIT: If Patreon has been charging $0.35 per patreon to their creators, then this is not new profit for them, but is instead the same profit now collected from patreons instead of creators. It's still unacceptable to me, because they're charging the worst-case scenario (one transaction, per patreon, per creator) and then optimizing for less than that and not crediting the excess (Y-X) x $0.35 back somehow. If their 5% take isn't enough to cover transaction costs, hiding a profit in (Y-X) x $0.35 is not the correct way to solve that. EDIT: It's possible that Patreon was censured by Stripe somehow and is going to stop batching charges period full stop come January, and so then Y=X for all cases, at which point this all starts to make a lot more sense.
  - 9y ago
coffee9 9y ago
Setting themselves up for a fall with all the recent rules and fees they're adding.
walterbell 9y ago
Is there a viable alternative to Patreon?
- cdancette 9y ago
  For Europeans, Tipeee which is a french startup. The fee depends on the amount you pledge. https://www.tipeee.com/about/fees https://www.tipeee.com/about/fees
- anthmcc 9y ago
  No better time to start one.
- jrs95 9y ago
  If there isn't now, and this fee structure is very unpopular, there probably will be. Their service doesn't strike me as something which is particularly difficult to replicate.
- simantel 9y ago
  Kickstarter launched Drip recently: https://d.rip/ https://d.rip/
- egypturnash 9y ago
  Kickstarter's got one, but it's invite-only right now. https://d.rip https://d.rip - I could find no sign of their fee structure anywhere on the site. There's also https://liberapay.com https://liberapay.com - a non-profit Patreon clone, whose code is public. You may have to be creating open source content, I'm not sure. Seems to pay weekly, does not take any cut themselves (?!?!?).
  - kemenaran 9y ago
    I just migrated my two Patreon pledges to Liberapay, and it worked surprisingly well. You decide how often you want them to charge you—and then they re-distribute the money on a per-week or per-month basis to creators. So you can choose to be charged every month (and have ~2% of banking fees), or to provide money for the next 3 months (and the banking fee will be less). Money will be redistributed to creators once a week (or once a month) anyway. Plus they only charge banking fees, nothing for themselves (tip is voluntary).
cdancette 9y ago
I think patreon should be way more precise to how much is going to the creator and how much they take when you make a pledge. When I pledge 1$ to some creator, I was unsure whether the creator would get the whole money and I would pay fees in addition, or if patreon would take the fee on those 1$.
- astura 9y ago
  Well, that's not at all unusual, 99.9% of credit card transactions you don't know the fee the merchant is paying.
  - cdancette 9y ago
    I mean they should at least say how much the creator will receive, and how much he won't (patreon fees + credit card fees, I don't care about the details).
    - astura 9y ago
      Once again, when you donate to an charity or buy a product from the shelf you don't know how much the charity or retailer would receive when you pay with a credit card. Not unusual. When you check out in Walmart how much is the fee Walmart pays? You have (basically) no idea.
      - cdancette 9y ago
        Of course not, but it depends if you consider that you're paying the creator, and that the platform is just an intermediate, or if you're paying the platform for a service and they pay the creator with their revenue. If they're just an intermediate and I want to pledge 1$ to the creator, I expect that he will receive 1$, and if not, I want to know how much I need to give in order that he does. And you're wrong about NGOs, usually they do provide how your money will be used, what is the amount of money that will go for their internal costs, and what will be used really for charity. I wouldn't absolutely not give to a charity that would not provide me those details.
  - 9y ago
pwinnski 9y ago
So patrons will now be responsible for covering the Stripe fees, and Patreon is still taking an additional 5% for their services. The Stripe fees were previously taken out of the creators' portion, so it made a big difference to a creator whether they had one patron for $100/month or 100 patrons for $1/month. But that was hidden from patrons, who could easily and happily pledge $1 to a dozen creators. Can I now pledge 63 cents, so that the cost to me is $1? Also, I'd be shocked if me pledging $1 to a dozen creators resulted in a dozen Stripe charges. Clearly Patreon should run those charge once, so my $12 costs only 70 cents from Stripe.
- ceejayoz 9y ago
  Patreon wants us to think they're Stripe fees, but they're not. When I pay $17 for my monthly pledges, that comes out of my card as one single transaction, with one single $0.30 Stripe per-transaction fee. Stripe also offers high-volume clients a discount on the 2.9% rate, which Patreon must be big enough to get.
  - caseyf 9y ago
    > Stripe also offers high-volume clients a discount on the 2.9% rate, which Patreon must be big enough to get. Yep. They pay 1.9% (source: https://patreon.zendesk.com/hc/en-us/articles/204606125-How-do-you-calculate-fees- https://patreon.zendesk.com/hc/en-us/articles/204606125-How-...) Also, Paypal offers a 5 cents + 5% micropayments rate that they take advantage of. The 35 cents plus 2.9% is clearly designed to make you think that they are processing fees and I'd be very surprised if Patreon wasn't putting at least half of that into their pocket.
    - jameskegel 9y ago
      5 cents and 5% is ridiculous if it is cost-plus, but if it is indeed a flat rate, considering how small some of these microtransactions can be, and the overhead involved for a transaction of any size, it starts to make sense.
- GoatOfAplomb 9y ago
ceejayoz 9y ago
I'm fine with them taking 2.9% (although I'm sure their volume lets them get a discount below that), but $0.35 per PLEDGE is lunacy. They don't make individual charges for each pledge.
simias 9y ago
I can't really make sense of that article: >That changes on December 18, when patrons will start paying 2.9% plus 35 cents for each individual pledge Then: >With this update, creators will now take home exactly 95% of each pledge with no additional fees Suppose you're donating $1, the .35 fixed "service fee" alone is 35% of the pledge, not even counting the 2.9% variable amount. I don't understand how they end up with the 95% figure.
- ceejayoz 9y ago
  If someone pledges $1, the pledger gets charged $1.40 (edit: sorry, $1.38), and the pledgee gets paid $0.95.
  - simias 9y ago
    Mmh, could you "show me your work"? Because I don't see how you end up with these numbers. 2.9% of $1 is $0.029 $1 + $0.029 + $0.35 ~= $1.38 95% of $1.38 is $1.311 Clearly that doesn't make sense. Or does it mean that Patreon gets 5% from the creator's share and then 2.9% + .35 cents on your side? So if I want to pledge $1 then I have to pay $1.38 and the creator really only receives $.95? If so that seems misleading. Also in this case it would mean that in that case Patreon ends up taking 31% of the actual money spent by the pledger.
    - ceejayoz 9y ago
      The pledge is $1. The pledgee receives 95% of the pledge, $0.95. The pledger is charged $1 PLUS the "processing fees", which are an ADDITIONAL 2.9% of the pledge (2.9 cents) and 35 cents fixed. > Also in this case it would mean that in that case Patreon ends up taking 31% of the actual money spent by the pledger. Yep, and batching charges means much of that 31% isn't actually going to real processing fees, but into Patreon's pocket. Their recent (September) taking of $60M in VC money may provide a motive for this approach.
    - trowawee 9y ago
      I believe that Patreon's claim is that the bulk of that money is going to the payment processor, although that argument falls apart if they are batching your payments (which is what they currently do).
nemothekid 9y ago
Don’t Visa/MC frown on pushing CC fees on to consumers? And why now? Is it simply a cash grab or did their payment processor ask Patreon to change their tune?
- neaden 9y ago
  It looks like they are charging a flat fee to everyone regardless of how they pay. I think the CC companies tend to get mad if you charge a fee to people paying credit at stores where paying by check or cash is an option. IIRC you can also get around it by having a cash "discount".
- kelnos 9y ago
  I believe the general rule is that merchants can't charge customers more for CC payments than they do for cash payments. I assume Patreon doesn't take cash payments, so there's no issue there.
  - cortesoft 9y ago
    That used to be the case, but it certainly isn't anymore. 95% of gas stations in Los Angeles have a separate, lower, price per gallon for cash.
    - floatingatoll 9y ago
      Providing discounts for cash, as gas stations do, was legal prior to 2013 (and remains legal to this day). In 2013, charging customers a clearly-notified fee for accepting credit cards was authorized for all merchants; most simply choose not to.
      - chimeracoder 9y ago
        > In 2013, charging customers a clearly-notified fee for accepting credit cards was authorized for all merchants; most simply choose not to. The federal ban on charging fees was lifted, but many states (including New York and California) also still outlaw this at the state level. In addition, merchant agreements often prohibit it - for example, merchants that take American Express cannot charge fees for any transactions, even the ones that run on Visa or Mastercard.
rb808 9y ago
I really thought this is a space where crypto currencies should shine. Is there an established base of people that take a crypto currency. BTC is no longer useful for this, but something must be.
- Mithorium 9y ago
  It's a credit card problem, even if the donation is in crypto, the patrons need to buy that, and unless they're using cash or direct bank transfer its probably going to be by card. The only way to lower the fixed fees is to convince people to transact larger amounts at a time, eg to load a patreon "balance" with $50 that gets deducted from instead of individual transactions of $1
- infecto 9y ago
  This is one area where I am interested in. https://basicattentiontoken.org/ https://basicattentiontoken.org/ This is what you are looking for. Its built into the Brave browser as well so you can automatically send tokens every month to the sites and video creators that you visit.
- s73ver_ 9y ago
  Except don't most crypto currencies have transaction fees as well? Ones which can be far, far more than credit card ones (See: Valve dropping BTC from Steam).
Sir_Cmpwn 9y ago
For those considering an alternative to Patreon, I have a self-hosted, open source payment platform that takes one-time and recurring donations via Stripe: https://github.com/sircmpwn/fosspay https://github.com/sircmpwn/fosspay I offer this to my supporters in addition to my Patreon page. https://drewdevault.com/donate https://drewdevault.com/donate https://patreon.com/sircmpwn https://patreon.com/sircmpwn
- JoshTriplett 9y ago
  That doesn't provide the benefit of batching, though. (Of course, now neither does Patreon.) Have you considered putting up a hosted version that batches Stripe charges?
  - deleted 9y ago
    [deleted]
  - Sir_Cmpwn 9y ago
    I hadn't, no. That sounds like a good idea.
    - JoshTriplett 9y ago
      Please do, and please announce that far and wide. There are likely many projects that'd like to use it but don't want to have to host it themselves, and you might want to catch the pile of current dissatisfied Patreon users.
    - CodesInChaos 9y ago
      If you accept money on behalf of creators, you probably need some kind of financial service provider license. Handling chargebacks+fees might be a bit annoying as well.
- dba7dba 9y ago
  And I wonder what if Stripe just offered this kind of service? Patreon is just an additional middleman.
rainbowmverse 9y ago
Duplicate: https://news.ycombinator.com/item?id=15869233 https://news.ycombinator.com/item?id=15869233 Though this one seems to have gotten more attention.
shabble 9y ago
Wasn't there something recently about Patreon having problems (legal/regulatory) with the way they were bundling all the contributions for a user and only submitting a single card/processor transaction for the total? If so, that might explain why they want to effectively unbundle everything again, even if it makes everything worse for everyone. The marketing-weasel language of their "robust question and answer page"[1] is a little hard to take regardless of actual reason though. [1] https://patreon.zendesk.com/hc/en-us/articles/115005631963-What-does-Patreon-s-service-fee-mean-for-me- https://patreon.zendesk.com/hc/en-us/articles/115005631963-W...
- walterbell 9y ago
  Do you recall which rule/law required unbundling of charges?
  - shabble 9y ago
    no, I'm just going from a fairly hazy memory of some article, so it may not be the case at all. Could also have been something contractual with the payment processors relating to fraud detection or prohibited item/services, but it seemed like it might threaten their current payment setup. I'll see if I can find anything, but something in the firefox 56-57->52 ESR downgrade appears to have eaten all of my profile's History, and I'm not sure I can be bothered rummaging through external backups :)
    - walterbell 9y ago
      Found this: https://subfictional.com/my-theory-patreon-doesnt-want-to-be-a-money-services-business/ https://subfictional.com/my-theory-patreon-doesnt-want-to-be...
  - cjg_ 9y ago
    This is most likely due to EU's new PSD2 regulations (see https://stripe.com/connect/eu-guide https://stripe.com/connect/eu-guide)
    - 9y ago
egypturnash 9y ago
I'm a creator who uses Patreon. Most of my support is $1 pledges; I have a couple small pledges I make to other creators, as well. I heard about this entirely through people talking about it on Mastodon. Didn't get any email from Patreon about this, not even lost in my spam folder; the only email I have from Patreon going back for a while is "hey you got paid", "someone made/changed a pledge", and "someone commented on one of your posts". I'm not anyone huge, I make about $800 a month on a really productive month, and I don't make videos which is sometimes all Patreon seems to care about - I quit subscribing to their creator newsletter because it was nothing but chirpy articles on why and how you should be making video content!!11!! - but I kinda feel like, I dunno, maybe I should have had, like, some email in my inbox about this? ---- I really hope that everyone (including me) is misreading the detailed explanation of How This New Fee Structure Works, because it sure does sound like they're going to be imposing a 2.9%+35¢ transaction fee to every single pledge before they add up all of the pledges you've made to the dozen creators you might support on Patreon, instead of after. Which adds up really quickly. If this is the case, I guess I get to see if being a Featured Project twice on Kickstarter is going to be of any help in getting into their new invite-only Patreon-alike d.rip... edit: They updated the FAQ page on the new fees to address the concerns of the per-thing creators like me. https://patreon.zendesk.com/hc/en-us/articles/115005631963 https://patreon.zendesk.com/hc/en-us/articles/115005631963 >Q: How does this impact me as a per-post creator? >A: As a per-post creator, your patrons will see the 2.9% + $0.35 service fee added to all paid posts. For example, if you are a per post creator making two paid posts per month, your patrons will be charged 2.9% + $0.35 for each paid post. (Italics mine.) are they, like, completely unbundling all of their charges from each other now? Why are we even using Patreon any more if that's the case?
- finkin1 9y ago
  Here's the email I got at 11:23AM this morning: "Dear patron, Your support is truly changing the lives of creators around the world. You give creators a reliable paycheck that enables them to do their best work. Thank you thank you thank you. In order to continue our mission of funding the creative class, we’re always looking for ways to do what’s best for our creators. With that, we’re writing to tell you of a change we’re making so that all Patreon creators take home exactly 95% of every pledge, with no additional fees. Aside from Patreon’s existing 5% fee, a creator’s income on Patreon varies because of processing fees every month. They can lose anywhere from 7-15% of their earnings to these fees. This means creators actually take home a lower percentage of your pledge than you may realize. Our goal is to make creators’ paychecks as predictable as possible, so we’re restructuring how these fees are paid. Starting December 18th, we will apply a new service fee of 2.9% + $0.35 that patrons will pay for each individual pledge. This service fee helps keep Patreon up and running. We want you to know that we approach every change with thoughtfulness for creators and patrons. By standardizing Patreon’s fees, we’re ensuring that creators get paid to continue creating high quality content. If you have questions or would like to learn more, please visit our FAQ here. Sincerely, The Patreon team"
kareldonk 9y ago
This is why cryptocurrencies exist and are important. Cut the middlemen. Fast.
kirillzubovsky 9y ago
We used to run a marketplace for designers and one of the things we learned (too late) was to charge more. Pick a number, double it, and you are still probably not charging enough. You can't run a service on dog food forever. Sure Patreon raised funds, but those funds can't subsidize them for a lifetime, they gotta get sustainable and do it fast. There is not a chance they will be wasting time to build their own credit-card processing, so Stripe fees are here to stay. Although contributors are important, Patreon would have nothing without their creators. Creators make the content which people pay for, and creators need to put food on the table to keep doing what they are doing. If you are a creator making $2,000 a month, for example, then an extra $100 is an extra trip to the grocery store, and that's important. If someone wants to fund a creator, they will, and the extra couple of bucks isn't going to discourage that. Furthermore, I suspect Patreon has data on how much is being contributed by each user. I doubt, like the top comment suggest, that 1 person on the platform would fund 100 creatives. Probably 1:3 ratio, with a couple of outliers, is most likely. This is a good change. p.s. If they don't have it yet, expect Patreon to start partnering with places like Teespring to offer merch by their creators. It just makes sense.
- trowawee 9y ago
  > If someone wants to fund a creator, they will, and the extra couple of bucks isn't going to discourage that. I'm explicitly hearing the opposite from creators on Twitter. People are already seeing patrons defecting from projects over this.
  - kirillzubovsky 9y ago
    Like Jason Lemkin said, the customer who churned is the customer you've never had.
    - freeone3000 9y ago
      Well, small problem with that - words have meanings. They were a customer, in that they were giving Patreon money. Now they are not a customer. It's not that they were never a customer, because they were giving Patreon money. And now they're not.
anigbrowl 9y ago
This is why I have been skeptical of Patreon as a revenue source for working artists. I don't like the whole copyright regime and would drastically alter it, but the basic idea of a fungible copyright is a lot more bankable than renting a tin cup from a monopoly provider. Not hating on Patreon which I admire in general, but a single provider is undesirable compared to federated micropayments.
panic 9y ago
It's worth remembering that less than three months ago, Patreon raised $60M in a series C (https://patreonhq.com/new-round-funding-816d5a592477 https://patreonhq.com/new-round-funding-816d5a592477): I’ve got some exciting news! Patreon has just secured an additional round of financing ($60M!), which means we will be scaling our team, building faster, and building more — all in service of getting you paid what you deserve to be paid, for the value you give the world. YESSS! So why is Patreon changing their fees now, when they just got a ton of money and can basically do whatever they want in order to grow? Their Zendesk article (https://patreon.zendesk.com/hc/en-us/articles/115005631963 https://patreon.zendesk.com/hc/en-us/articles/115005631963) isn't much help: Q: Why is Patreon doing this now? A: Patreon exists to allow creators to get paid what they deserve to be paid, for the value they give the world. This is awesome and to continue this vision, we need to constantly evaluate our processes. As we work to deliver bigger and better features for creators and patrons in 2018, we felt like sooner than later made sense to put this change into effect. This doesn't actually answer the question: why do the fees need to be changed at all, whether sooner or later? Were creators asking for this change? What was wrong with the way it worked before? The obvious answer is that Patreon needs more money for some reason. But… they just raised a bunch of money. So I really don't understand how this change makes sense or helps anyone.
- TillE 9y ago
  > Were creators asking for this change? Nope. And the absolutely universal response, from tiny artists all the way up to Chapo Trap House (the largest Patreon creator by far) has been firmly against this change. But investors put in money expecting to get more money out. That's the only credible explanation I can see. They're lucky that Drip isn't up and running yet so there can't be an immediate reaction.
  - JeffreyKaine 9y ago
    This was likely the strategy. The board wanted more profit, knew they needed to change some things, and decided to do it before a real competitor made it to the scene.
Paul-ish 9y ago
I wonder if this change has anything to do with the median number of creators the typical Patreon users supports. A lot of angry people here sound like power users, but that might not representative of the overall userbase.
zAy0LfpBZLC8mAC 9y ago
Oh, closed systems will use their semi-monopoly position to raise prices? Who would have thought ...
zapt02 9y ago
This is doubly weird because Patreon only charges users once per month, so they are really only paying one transaction fee per user. They also charge VAT for european pledgers, already bringing up the pledge amount by 25%.
NelsonMinar 9y ago
$0.35 fee on a $1 donation is a lot of friction. The $0.35 / donation fee doesn't make sense to me. It sounds like a credit card transaction fee. But Patreon charges my CC once a month. So why not charge me the $0.35 once a month? Why once per donation? The 2.9% part seems fine to me. So does shifting the costs to the donators. But why charge me per donation instead of per credit card transaction? Edit this article has a nice analysis: https://www.pretty-terrible.com/funny-money-patreon-style/ https://www.pretty-terrible.com/funny-money-patreon-style/
- dtech 9y ago
  Exactly. If you support 10 creators they get to keep 90% of the 10x$0.35. The argument that it's for payment processors is utter bollocks.
  - jasonlotito 9y ago
    Why do you think it's bollocks? It makes perfect sense. A transaction fee + % is common with payment processors. Couple that with new rules coming down the pipeline (as well as common sense when it comes to processing transactions for other people), nothing about the pricing is unreasonable. Quite the opposite, in fact.
    - Anderkent 9y ago
      They're charging 0.35 for moving some balance from one big transaction they charged me into accounts of the people I support. It's basically charging for an atomic move. You seem to assume that each pledge is a separate transaction. But the entire advantage of patreon over doing pledges directly is that all my pledges are one transaction with them, and all pledges someone receives are one transaction. Sure, charge me 0.35+small % once a month as transaction fee.
      - jasonlotito 9y ago
        > You seem to assume that each pledge is a separate transaction. Incorrect. I know how Patreon used to work before this announcement. My understanding is they are splitting it up into separate transactions, which makes sense if you understand how credit card processing, monetary transactions, and all the legal ramifications around them operate. What I do hear is a lot of people who haven't worked in the CC industry making baseless assumptions about how all this works.
protomyth 9y ago
Hold up, they take one charge on my PayPal and if I understand this correctly, they are going to charge me for each of my pledges? So, 4 x $1 pledges that are taken as one charge will now cost me $5.52 ($1 + $0.35 + $0.03) * 4))?
- kevin_b_er 9y ago
  Yes. They only charge you once, though. So the extra fees aren't payment processor fees anymore and they pocket the rest. Calculate the differential on the paypal transaction fee and you'll arrive at patreon making some sweet percentages. Patreon used to have PayPal charges 5% + $0.05. So let's presume they're paying the same. They charge you once for $5.52. Paypal gets $0.326 + $0.05 out of it. $3.80 goes to creators. Instead of Patreon making $0.20, they now make $1.344. Yes, you read that right, Patreon is making $1.344. ~35% profit margin vs 5% off your donation. They've multiplied their cut several times over.
huac 9y ago
I'm fairly sure this is tied to anti-money laundering rules (but would be happy to be corrected). Basically, if Patreon bundled patron payments and then paid them out to creators, it could be construed as transaction laundering. The basic problem is that it would be cheaper for everybody involved if Patreon would charge each patron a bundled amount for all their supported campaigns, and then pay out to each creator everyone's support to them. This means that there are N + M transactions, where N is number of patrons and M is number of creators. However, due to a myriad of rules, they actually need to pay out N * M transaction fees, because each patron's contributions will be going more or less directly to each creator (minus Patreon's cut of course). The extra fees more accurately represent the cost of doing business with credit cards. This article explains the AML rules in this area: https://www.trulioo.com/blog/transaction-laundering-a-growing-threat-to-the-payments-ecosystem/ https://www.trulioo.com/blog/transaction-laundering-a-growin...
- xchip 9y ago
  If that is the concern they can go after tax havens, there is where the billions are.
- raesene9 9y ago
  I'm not sure that this change has anything to do with AML. Patreon already does bundle payments to creators. I get billed monthly for my various followings. That won't change at all under the new system (AFAIK). What changes is that Patreon charge me for every pledge instance that I use, which is basically crap as it doesn't cost them any more if a creator has 1, 5 or 10 pledges per month, they bundle it up and make one payment to the creator. I have no problem with the idea of Patreon charge patrons rather than creators for fees, but the "per pledge" billing is terrible.
- endgame 9y ago
  If it's AML, then Patreon should come out and say it's AML, and point to the rules they have to comply with. Not write feelgood fuzzy bullshit that actually ends up with them taking a huge slice of the pie.
- rsynnott 9y ago
xchip 9y ago
Greedy Patreon.com, I already deleted my account. You need to send an email to: disable@patreon.com
- dawnerd 9y ago
  Or just click disable in the dashboard. Pretty easy, actually.
  - xchip 9y ago
    Thanks! It seems that this option only shows up in the desktop version and not in the mobile version!
deleted 9y ago
[deleted]
gkya 9y ago
I was considering Patreon for some stuff I planned to publish in somewhat distant future, but now this makes me suspicious. On such a platform I'd rather want to have numerous people that give me $1 monthly rather that a bunch that pays some three-figure sum, should I want to live off those pledges. If a $1 pledger decided to not support me anymore, I wouldn't have lost a big part of my income, but if instead someone who paid $100 or $200 decided to stop paying, that'd be a big change. I'd actually prefer to not allow people pay me more than $10 or 20 to not allow that kind of thing happen, and to not allow myself to have the illusion thereof. As far as I understand, this new scheme will punish the kind of pledger that I said above I'd prefer: who pledges a couple $ or so. If I want to pledge $10 monthly, I'd better give it to a single creator than to 5-10 creators. In this case as a potential creator I'd be happier with a bigger cut from what I receive in expense of free payments on the patron's side.
lathiat 9y ago
Lots of people unsubscribing apparently, screencap: https://twitter.com/lazygamereviews/status/938845405336436736 https://twitter.com/lazygamereviews/status/93884540533643673...
- Obi_Juan_Kenobi 9y ago
  I just did. I hope others do as well.
  - gordaco 9y ago
    This sucks because I'm tempted to do it as well, but this means that I can't support the content creators that I like. I really hope that a better alternative comes soon. I've seen a lot of people using https://ko-fi.com/ https://ko-fi.com/ (and I've used it to donate to them a few times), but it's not exactly the same.
    - tortasaur 9y ago
      Creators won't bother to find alternative platforms until the users leave the harmful dominant one.
- strictnein 9y ago
  That sucks. LGR is great.
joelthelion 9y ago
Another perfectly good startup killed by the dreams of grandeur of silicon valley investors. Not everybody company is supposed to be the next Google, guys.
rinon 9y ago
Great summary of the math from reddit: https://www.reddit.com/r/patreon/comments/7i2kqd/patreon_will_start_charging_patrons_a_credit_card/dqvrb9d/ https://www.reddit.com/r/patreon/comments/7i2kqd/patreon_wil...
Obi_Juan_Kenobi 9y ago
I just cancelled all my pledges. This is absurd. The whole point of Patreon was to bundle small charges to avoid these fees, and to hopefully make support more reliable/consistent for creators. If they're going to fail outright on the former pledge, then I want nothing to do with them. I strongly urge others to cancel pledges, as this is the strongest feedback we can provide. There are many ways to support creators.
- runj__ 9y ago
  The really sad part is that they tricked people into potentially leaving their job and then ripped the carpet out from under them. I'm really thinking of dropping pledges and simply mail them some cash but I'm afraid I'd skip the last step and hurt the creators I love in the end.
  - ZenoArrow 9y ago
    I dropped my pledges off the back of this news. I was only supporting one creator, so it wasn't that dramatic. Also, I left a comment before I cancelled indicating I was only leaving because of Patreon's business practices, and suggested I'd like to support the creator again if they open up an account with a competitor. Liberapay would be my preferred choice but as long as Patreon get the message and the creators don't have to suffer, some good can come out of it.
- em3rgent0rdr 9y ago
  I canceled all my pledges too! Sure they were only $1/month each, but there were quite a few of them!
robryan 9y ago
Why is someone as big as Patreon paying 2.9% + 35 cents? Even stripe should be able to do better than that?
- dawnerd 9y ago
  They're not, thats the point. They say in their FAQ their stripe rate is 1.9%
chx 9y ago
Let's run the numbers: https://blog.patreon.com/updating-patreons-fee-structure/ https://blog.patreon.com/updating-patreons-fee-structure/ For a $1 pledge: previously creators took home 85c at least, so Patreon was maxed out at 15c. Now they will charge the patron 37.9 cents and the creator an additional 5c. So now they are maxed out at 42.9c. If 15c was enough to break even this means 27.9c of pure profit. That's a _very_ nice profit rate! (The rent seeking is too damn high.) Let's presume patrons decrease their patronage so they pay the same as before, so if they paid x before now they pay 1.029y+0.35=x ==> .97x-0.34. The patron takes home 95% of this, .92x-0.32 Previously they took home at least .85x. So we are looking at 0.07x=0.32 ===> 4.57 So if you were pledging below 4.5USD (let's be realistic: 5 USD, noone pledges cents, not sure the platform lets you) and drop your pledge such that Patreon charges you the same, then this hurts your creator. And many won't react rationally and do the .97x-0.34 calculation, just cancel because hot damn, did a company I authorized to charge me X amounts just unilaterally decided to charge me more without proper clear notice (I just checked my home page and I do not see a big read warning this month I will be paying more either on the home page or the pledges page.) Oh and many creators have various perks at 5USD which now they need to drop to 4.52 USD (again, does the platform allow for cents?) and encourage their patrons to drop to that level. Patrons in this case pay 5 USD still and the creator takes home 4.29. Previously, the creator took home 4.25-4.65.
ThrustVectoring 9y ago
I cancelled all my pledges over this, it's a huge breach of trust IMO. I set things up to authorize Patreon to charge me $X per month. They unilaterally decided to use that authorization to charge me $X + service fees per month going forward. They announced this by sending me an email that takes several minutes and multiple paragraphs for me to understand that the cost to continue my Patreon subscription would go up next month. I don't give authorization for recurring charges to companies that unilaterally decide to foist price increases on me.
- ridgewell 9y ago
  Agreed, I've similarly cancelled all my pledges and I am very disappointed that Patreon has done so without a clear email and explanation of why to boot.
buovjaga 9y ago
Flattr is making the most out of the situation :) https://blog.flattr.net/2017/12/patreon-fees/ https://blog.flattr.net/2017/12/patreon-fees/
- phjesusthatguy3 9y ago
  "We still think Patreon is a great solution for creators, but they now seem to be less about supporting creators plural, and more about supporting a creator singular (or perhaps one or two creators)" Does anyone know what they're talking about with the "or perhaps one or two creators" part?
  - trowawee 9y ago
    With the fee change, if you have a budget of, say, $15 to spend on creators on Patreon, it makes sense to split that into as few pledges as possible to minimize the number of times you pay the fees.
  - therealdrag0 9y ago
    My guess is assuming this will change consumer behavior. Suppose bob sponsored 5 people at 1$ each before. Now if Bob gets charged a fee for each of the 5 contributions, he might change his election to 5$ to his single favorite creator, so that he is only charged 1 fee instead of 5.
- zu03776 9y ago
  So instead of losing 2.9% + 0.35 on donor and 5% on recipient, why not lose 16.5% instead? #winning From the FAQ at https://flattr.com/faq#23 https://flattr.com/faq#23 : We take 7.5% of received revenues (to keep Flattr running, develop further and handle chargebacks and fraud). Our payment provider (MangoPay) charges 9% of received revenues (please see this blog post for more information). These fees are withdrawn on the 1st of the month for revenue received in the prior month. Whenever money is withdrawn (currently the minimum amount that can be withdrawn is $10) a $3 fee is charged.
whiskeySix 9y ago
I was sending a favorite podcast of mine (It's Just Banter) $1 a month. But with a 35 cent fee to send 1 dollar, it seemed crazy, so i cancelled it. I'll find another way to support TC and Jake.
lindner 9y ago
No one has mentioned https://liberapay.com/ https://liberapay.com/ ? They seem to deal with this problem by letting you fund a donation account and then disburse funds on a periodic basis. This is also similar to donor advised funds so I'm not sure why Patreon is doing this when other alternatives are available.
- kemenaran 9y ago
  I just cancelled my two pledges on Patreon, and migrated them to Liberapay. The process was surprisingly smooth and easy. We'll see how it works on the long run, but for now Liberapay looks like an excellent alternative. (Also they don't take automatic fees for their own finances; tip is on a voluntary basis).
denweb 9y ago
Patreon supports fascism so Kickstarter is where to spend your money! Queue the Nazi supporters!
1_2__4 9y ago
So assuming this is yet another VC-funded firm being pushed to only go after "whales" and cull undesirables... Who are the whales, and who are the undesirables? My tinfoil hat says adult art is made up of more/smaller pledges and they're hoping this will run them off the service. That's typically why companies do this.
ProfessorLayton 9y ago
It is definitely a money grab. They're even making it so that you can't use your patreon balance to pay other creators, ensuring you'll need to pay their "service fee" https://twitter.com/zandravandra/status/938897708286390272 https://twitter.com/zandravandra/status/938897708286390272
Fomite 9y ago
"Concern" nothing. I've already lost enough patrons on the campaign that supports a side project to eat up a sizable portion of the supposed benefit to me.
- Fomite 9y ago
  It's now up to twice what the benefit would have been in lost Patrons.
hysan 9y ago
Ok, as someone who pledges a few dollars to many creators, this sucks. I also haven't seen any big improvements to their platform featurewise; I've been repeatedly asking for email digests since they took over Subabble and they keep replying with, "Great idea. We'll pass it along." So no idea what they need more money for. I'll probably be stopping my pledges after trying to discuss this with the creators I support (and Patreon but they probably won't say much).
AlexandrB 9y ago
Patreon has just updated their blog with the rationale for the change: https://blog.patreon.com/updating-patreons-fee-structure/ https://blog.patreon.com/updating-patreons-fee-structure/ Unfortunately, changing the payment structure to what they're proposing - while easier to understand - removes any payment-processing value that Patreon was providing. Putting the friction back into these kinds of micro-donations. Seems like a bad business move to me. The hard problem here was making micro-donations cost-effective, not creating a website where creators could host links to content. Edit: The relevant paragraph. > To do that, we need to move our payments system to treat your pledges like any other subscription service. In other words, we need a system that charges patrons at the time of their initial pledge, and on the anniversary of their pledge each month thereafter. So every individual monthly pledge will result in a CC transaction now. I'm guessing in cases where two pledges fall on the same day Patreon will still do one CC transaction and pocket the $0.35 they saved?
- tmorton 9y ago
  Ok, that link makes things clearer, and I can understand their position a bit more. But they missed the BIG OBVIOUS solution: charge a pro-rated "first month" pledge, then combine all subsequent pledges like they do now. For example, if I become a patron at the $10/month level, on the 15th of the month, they can charge me $5 immediately. Then the $10 gets added to my regular charge on the first of the month, and everyone saves in processing fees. As a patron, I would much rather get one charge per month on the first. The current schedule works great.
  - trowawee 9y ago
    No no no, you just don't understand! Solving the issue of "how do we handle mid-month sign-ups for a service that bills monthly" is a nigh impossible problem that requires at least 40 to 50 Stanford- or MIT-trained engineers.
  - rinon 9y ago
    There are often privileges and perks associated with being a patron of a certain creator. These perks aren't pro-rated, thus subscribing late in the month for a day or two might be a viable way to cheat this system. Personally, I don't think this is a huge deal, and, if this is their reasoning, it's a mistake.
rcthompson 9y ago
Since the graphs is Patreon's own blog post are so grossly misleading, I made my own: https://mneme.dedyn.io/shiny_users/ryan/patreon-fees/ https://mneme.dedyn.io/shiny_users/ryan/patreon-fees/ Not surprisingly, the look nothing like Patreon's graphs. For any pledge of $4 or less (and probably a lot more than that), Patreon is now taking more of the pledge for themselves. Since this likely represents the vast majority of pledges, Patreon is effectively raising their prices without admitting that that's what they're doing.
- cbcoutinho 9y ago
  This is really clean, how did you do this?
  - bllguo 9y ago
    Not the author, but this is a R Shiny application. If you mean the plots, they are made with ggplot, a package in R. https://shiny.rstudio.com/ https://shiny.rstudio.com/
    - rcthompson 9y ago
      Yes, that's right, Shiny for the web page and ggplot2 for the plots.
- totallysafe 9y ago
  probably because your `Patreon_Old_Max_Fee` and `Patreon_Old_Min_Fee` are wrong. The portion taken has never been as low as 2% on a $1 pledge. From their old FAQ: "Stripe charges 1.9% + $0.30 per transaction. PayPal charges 5% + $0.05 per transaction." So, under the old fee system, for a $1 pledge, the service fee was either $0.32 for Stripe or $0.10 for PayPal. On a $10 pledge, it was $0.50 for Stripe and $0.55 for Paypal.
  - rcthompson 9y ago
    I just went based on the information given in their blog post, which said "an additional third party processing fee that ranged from 2% – 10%". Edit: I'm not exactly sure how to calculate the fees based on the info in their FAQ. Taking Stripe as the example, they say the fees are 1.9% + $0.30 per transaction. So if I pledge $10, I guess that means that Patreon charges me an amount $X such that X * 1.019 + 0.3 = 10? And if so, do they take their own 5% cut out of $10 or out of $X? Edit 2: I took my best stab at it and replaced the min/max with specific entries for Stripe and Paypal.
petercooper 9y ago
I think this is more psychologically jarring than financially jarring. It's like if Amazon turned around and said, we're making Prime free, but it's a flat 25 cents for your previously free delivery. Doesn't sound a lot, but that's a psychological barrier that'll pop up every time when you're about to order something. Consumers really love knowing up front what they're committing to pay. Adding extra charges on is not going to help at all with adoption.
em3rgent0rdr 9y ago
YouTube, now is a great opportunity to integrate your own patronage system (or even a simple per-video or per-channel donate button)!
quadrangle 9y ago
It's actually not about new fees. They are adjusting fees in a funny way, but it's all about trying to make their freemium assumptions work. Most creators are using Patreon to enable a partly-gratis partly-paywalled business model. None of this would have come about if it were just about donating to creators you like. https://wiki.snowdrift.coop/market-research/other-crowdfunding#fn5 https://wiki.snowdrift.coop/market-research/other-crowdfundi...

410 points by slyall 9y ago

This should be at the top of HN. A tech company just cut the livelihoods of artists and many other important groups of people all over an artificial fee. This is disgusting and I hope a competitor beats them out ASAP.

Gracana 9y ago
It is both outrageous and unsurprising. This is how these companies ("tech" startups) are incentivized to operate. It is awful to watch this cycle happen over and over and over.
- jopsen 9y ago
  It also smells like another example of how taking VC money is going to ruin a startup that could otherwise have grown organically.

ocdtrekkie 9y ago

Wow. I only have a pile of $1 pledges right now, and this will significantly increase my bill for almost no gain for the people I'm supporting.

adjkant 9y ago
Exactly no gain if I'm understanding it.
- trowawee 9y ago
  Well, the analyses that I'm seeing suggest they'll see about $0.05 more per pledge. So, not "no gain", but very little gain, and almost certainly some cost as patrons leave the service over the price increase.
  - adjkant 9y ago
    Can you detail that math? I've seen math thrown around all over this thread, much of it contradicting. To me, this seems completely negative: Before: 7-15% net fees - $100 = $93 or $85 dollars Now: 8%+ net fees with near 30% fees for $1 and 10% fees for $10 That math is using net fees when considering the amount the patron pays vs the person gets. Patreon is pulling some shady math by pretending that the patron isn't paying the original fees as part of the total amount. To me, it looks like for nearly all cases, fees are going to increase. I would revise my statement to "loss, not gain", even if all patrons stay on the service.
    - trowawee 9y ago
      Sorry, I should have worded that more precisely. I was basing it on this: https://twitter.com/wombatoverlord/status/938849760198447104 https://twitter.com/wombatoverlord/status/938849760198447104 and various pieces I've read by creators. It looks like creators were averaging around 89% in net fees previously, where they will now be averaging 95%. So, ~$0.05 more on a $1 pledge.
      - adjkant 9y ago
        The problem is that that $1 pledge is no longer just $1. It's bait and switch math.

revelation 9y ago

Five percent is already ridiculous, this is just getting greedy. You would think YouTube would finally eat their lunch here but then the CEO over there can't even update her own recently launched channel so fat chance.

eropple 9y ago
Five percent is fine for what they're doing (it's not trivial). But this assessment is pretty messed up.
InclinedPlane 9y ago
The problem is that google (or alphabet) is just catastrophically bad at most customer relationships (except for ad buyers, though even then it's iffy). They treat all the content creators on youtube like users instead of customers. And they don't care about building a platform, ecosystem, community, etc. that supports the creators, they're willing to just let things flap in the wind and hope for the best.

eropple 9y ago

This is pretty crazy of Patreon. I mean - they can easily bundle pledges on charge. I don't understand why they'd drop a separate charge for each one, except for "fuck it, they won't care, right?".

Hemospectrum 9y ago
They can bundle the charges to the patrons to reduce cost to themselves, while still charging fees as if they were making individual transactions. I’m inclined to believe they’re already doing this.
- eropple 9y ago
  Plausible. Shitty, but plausible. If you're right, I'll be pulling every pledge I have immediately and telling every campaign that I'll happily return once they leave. I guess I'll find out next time they run and I can count number of charges.
- ocdtrekkie 9y ago
  I can confirm my Patreon pledges to multiple people were charged to PayPal as a single transaction.
  - eropple 9y ago
    Under their new model? I wasn't sure if it's already gone through.
    - ocdtrekkie 9y ago
      Existing charges. But it's hard to imagine Patreon would intentionally triple their service fee costs to themselves by charging pledges individually instead of in aggregate. The only thing that's changing is the service fees they're charging users.
      - eropple 9y ago

cdancette 9y ago

I think the clearest explanation of the change is in this tweet: https://twitter.com/TPRJones/status/938646263800705024 https://twitter.com/TPRJones/status/938646263800705024 "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"

floatingatoll 9y ago
$138 is unreasonable to me for one simple reason: When I pledge to 20 creators, Patreon batches my pledges based on arbitrary server-side criteria, such that they cannot guarantee how many charges will be made to cover my pledges. So typically I see two charges per month. They can't charge me $0.35 per charge because the # of charges varies without any ability for the customer to predict and cannot be defended reasonably to customers. Instead of revamping their billing groupings to ensure that each patron is charged once per month, they are charging $0.35 per creator, which is the absolute worst case scenario here. So to me, the ripoff is that they charge me for two credit card transactions, but instead of $0.35 per transaction, they charge $0.35 per creator within a single credit transaction - when that $0.35 is not charged to them by their merchant processor for those individual creators. I would have been fine if they'd simply tell me "X creators = Y transactions @ $0.35 each + 2.9% of amount", where Y is virtually always some tiny fraction of X, but that they instead say "X creators = X transactions @ $0.35 each + 2.9% of amount" to avoid regrouping their billing is a misuse of the word 'transaction' as they implement it. EDIT: If Patreon has been charging $0.35 per patreon to their creators, then this is not new profit for them, but is instead the same profit now collected from patreons instead of creators. It's still unacceptable to me, because they're charging the worst-case scenario (one transaction, per patreon, per creator) and then optimizing for less than that and not crediting the excess (Y-X) x $0.35 back somehow. If their 5% take isn't enough to cover transaction costs, hiding a profit in (Y-X) x $0.35 is not the correct way to solve that. EDIT: It's possible that Patreon was censured by Stripe somehow and is going to stop batching charges period full stop come January, and so then Y=X for all cases, at which point this all starts to make a lot more sense.
- 9y ago

coffee9 9y ago

Setting themselves up for a fall with all the recent rules and fees they're adding.

walterbell 9y ago

Is there a viable alternative to Patreon?

cdancette 9y ago
For Europeans, Tipeee which is a french startup. The fee depends on the amount you pledge. https://www.tipeee.com/about/fees https://www.tipeee.com/about/fees
anthmcc 9y ago
No better time to start one.
jrs95 9y ago
If there isn't now, and this fee structure is very unpopular, there probably will be. Their service doesn't strike me as something which is particularly difficult to replicate.
simantel 9y ago
Kickstarter launched Drip recently: https://d.rip/ https://d.rip/
egypturnash 9y ago
Kickstarter's got one, but it's invite-only right now. https://d.rip https://d.rip - I could find no sign of their fee structure anywhere on the site. There's also https://liberapay.com https://liberapay.com - a non-profit Patreon clone, whose code is public. You may have to be creating open source content, I'm not sure. Seems to pay weekly, does not take any cut themselves (?!?!?).
- kemenaran 9y ago
  I just migrated my two Patreon pledges to Liberapay, and it worked surprisingly well. You decide how often you want them to charge you—and then they re-distribute the money on a per-week or per-month basis to creators. So you can choose to be charged every month (and have ~2% of banking fees), or to provide money for the next 3 months (and the banking fee will be less). Money will be redistributed to creators once a week (or once a month) anyway. Plus they only charge banking fees, nothing for themselves (tip is voluntary).

cdancette 9y ago

I think patreon should be way more precise to how much is going to the creator and how much they take when you make a pledge. When I pledge 1$ to some creator, I was unsure whether the creator would get the whole money and I would pay fees in addition, or if patreon would take the fee on those 1$.

astura 9y ago
Well, that's not at all unusual, 99.9% of credit card transactions you don't know the fee the merchant is paying.
- cdancette 9y ago
  I mean they should at least say how much the creator will receive, and how much he won't (patreon fees + credit card fees, I don't care about the details).
  - astura 9y ago
    Once again, when you donate to an charity or buy a product from the shelf you don't know how much the charity or retailer would receive when you pay with a credit card. Not unusual. When you check out in Walmart how much is the fee Walmart pays? You have (basically) no idea.
    - cdancette 9y ago
      Of course not, but it depends if you consider that you're paying the creator, and that the platform is just an intermediate, or if you're paying the platform for a service and they pay the creator with their revenue. If they're just an intermediate and I want to pledge 1$ to the creator, I expect that he will receive 1$, and if not, I want to know how much I need to give in order that he does. And you're wrong about NGOs, usually they do provide how your money will be used, what is the amount of money that will go for their internal costs, and what will be used really for charity. I wouldn't absolutely not give to a charity that would not provide me those details.
- 9y ago

pwinnski 9y ago

So patrons will now be responsible for covering the Stripe fees, and Patreon is still taking an additional 5% for their services. The Stripe fees were previously taken out of the creators' portion, so it made a big difference to a creator whether they had one patron for $100/month or 100 patrons for $1/month. But that was hidden from patrons, who could easily and happily pledge $1 to a dozen creators. Can I now pledge 63 cents, so that the cost to me is $1? Also, I'd be shocked if me pledging $1 to a dozen creators resulted in a dozen Stripe charges. Clearly Patreon should run those charge once, so my $12 costs only 70 cents from Stripe.

ceejayoz 9y ago
Patreon wants us to think they're Stripe fees, but they're not. When I pay $17 for my monthly pledges, that comes out of my card as one single transaction, with one single $0.30 Stripe per-transaction fee. Stripe also offers high-volume clients a discount on the 2.9% rate, which Patreon must be big enough to get.
- caseyf 9y ago
  > Stripe also offers high-volume clients a discount on the 2.9% rate, which Patreon must be big enough to get. Yep. They pay 1.9% (source: https://patreon.zendesk.com/hc/en-us/articles/204606125-How-do-you-calculate-fees- https://patreon.zendesk.com/hc/en-us/articles/204606125-How-...) Also, Paypal offers a 5 cents + 5% micropayments rate that they take advantage of. The 35 cents plus 2.9% is clearly designed to make you think that they are processing fees and I'd be very surprised if Patreon wasn't putting at least half of that into their pocket.
  - jameskegel 9y ago
    5 cents and 5% is ridiculous if it is cost-plus, but if it is indeed a flat rate, considering how small some of these microtransactions can be, and the overhead involved for a transaction of any size, it starts to make sense.
GoatOfAplomb 9y ago

ceejayoz 9y ago

I'm fine with them taking 2.9% (although I'm sure their volume lets them get a discount below that), but $0.35 per PLEDGE is lunacy. They don't make individual charges for each pledge.

simias 9y ago

I can't really make sense of that article: >That changes on December 18, when patrons will start paying 2.9% plus 35 cents for each individual pledge Then: >With this update, creators will now take home exactly 95% of each pledge with no additional fees Suppose you're donating $1, the .35 fixed "service fee" alone is 35% of the pledge, not even counting the 2.9% variable amount. I don't understand how they end up with the 95% figure.

ceejayoz 9y ago
If someone pledges $1, the pledger gets charged $1.40 (edit: sorry, $1.38), and the pledgee gets paid $0.95.
- simias 9y ago
  Mmh, could you "show me your work"? Because I don't see how you end up with these numbers. 2.9% of $1 is $0.029 $1 + $0.029 + $0.35 ~= $1.38 95% of $1.38 is $1.311 Clearly that doesn't make sense. Or does it mean that Patreon gets 5% from the creator's share and then 2.9% + .35 cents on your side? So if I want to pledge $1 then I have to pay $1.38 and the creator really only receives $.95? If so that seems misleading. Also in this case it would mean that in that case Patreon ends up taking 31% of the actual money spent by the pledger.
  - ceejayoz 9y ago
    The pledge is $1. The pledgee receives 95% of the pledge, $0.95. The pledger is charged $1 PLUS the "processing fees", which are an ADDITIONAL 2.9% of the pledge (2.9 cents) and 35 cents fixed. > Also in this case it would mean that in that case Patreon ends up taking 31% of the actual money spent by the pledger. Yep, and batching charges means much of that 31% isn't actually going to real processing fees, but into Patreon's pocket. Their recent (September) taking of $60M in VC money may provide a motive for this approach.
  - trowawee 9y ago
    I believe that Patreon's claim is that the bulk of that money is going to the payment processor, although that argument falls apart if they are batching your payments (which is what they currently do).

nemothekid 9y ago

Don’t Visa/MC frown on pushing CC fees on to consumers? And why now? Is it simply a cash grab or did their payment processor ask Patreon to change their tune?

neaden 9y ago
It looks like they are charging a flat fee to everyone regardless of how they pay. I think the CC companies tend to get mad if you charge a fee to people paying credit at stores where paying by check or cash is an option. IIRC you can also get around it by having a cash "discount".
kelnos 9y ago
I believe the general rule is that merchants can't charge customers more for CC payments than they do for cash payments. I assume Patreon doesn't take cash payments, so there's no issue there.
- cortesoft 9y ago
  That used to be the case, but it certainly isn't anymore. 95% of gas stations in Los Angeles have a separate, lower, price per gallon for cash.
  - floatingatoll 9y ago
    Providing discounts for cash, as gas stations do, was legal prior to 2013 (and remains legal to this day). In 2013, charging customers a clearly-notified fee for accepting credit cards was authorized for all merchants; most simply choose not to.
    - chimeracoder 9y ago
      > In 2013, charging customers a clearly-notified fee for accepting credit cards was authorized for all merchants; most simply choose not to. The federal ban on charging fees was lifted, but many states (including New York and California) also still outlaw this at the state level. In addition, merchant agreements often prohibit it - for example, merchants that take American Express cannot charge fees for any transactions, even the ones that run on Visa or Mastercard.

rb808 9y ago

I really thought this is a space where crypto currencies should shine. Is there an established base of people that take a crypto currency. BTC is no longer useful for this, but something must be.

Mithorium 9y ago
It's a credit card problem, even if the donation is in crypto, the patrons need to buy that, and unless they're using cash or direct bank transfer its probably going to be by card. The only way to lower the fixed fees is to convince people to transact larger amounts at a time, eg to load a patreon "balance" with $50 that gets deducted from instead of individual transactions of $1
infecto 9y ago
This is one area where I am interested in. https://basicattentiontoken.org/ https://basicattentiontoken.org/ This is what you are looking for. Its built into the Brave browser as well so you can automatically send tokens every month to the sites and video creators that you visit.
s73ver_ 9y ago
Except don't most crypto currencies have transaction fees as well? Ones which can be far, far more than credit card ones (See: Valve dropping BTC from Steam).

Sir_Cmpwn 9y ago

For those considering an alternative to Patreon, I have a self-hosted, open source payment platform that takes one-time and recurring donations via Stripe: https://github.com/sircmpwn/fosspay https://github.com/sircmpwn/fosspay I offer this to my supporters in addition to my Patreon page. https://drewdevault.com/donate https://drewdevault.com/donate https://patreon.com/sircmpwn https://patreon.com/sircmpwn

JoshTriplett 9y ago
That doesn't provide the benefit of batching, though. (Of course, now neither does Patreon.) Have you considered putting up a hosted version that batches Stripe charges?
- deleted 9y ago
  [deleted]
- Sir_Cmpwn 9y ago
  I hadn't, no. That sounds like a good idea.
  - JoshTriplett 9y ago
    Please do, and please announce that far and wide. There are likely many projects that'd like to use it but don't want to have to host it themselves, and you might want to catch the pile of current dissatisfied Patreon users.
  - CodesInChaos 9y ago
    If you accept money on behalf of creators, you probably need some kind of financial service provider license. Handling chargebacks+fees might be a bit annoying as well.
dba7dba 9y ago
And I wonder what if Stripe just offered this kind of service? Patreon is just an additional middleman.

rainbowmverse 9y ago

Duplicate: https://news.ycombinator.com/item?id=15869233 https://news.ycombinator.com/item?id=15869233 Though this one seems to have gotten more attention.

shabble 9y ago

Wasn't there something recently about Patreon having problems (legal/regulatory) with the way they were bundling all the contributions for a user and only submitting a single card/processor transaction for the total? If so, that might explain why they want to effectively unbundle everything again, even if it makes everything worse for everyone. The marketing-weasel language of their "robust question and answer page"[1] is a little hard to take regardless of actual reason though. [1] https://patreon.zendesk.com/hc/en-us/articles/115005631963-What-does-Patreon-s-service-fee-mean-for-me- https://patreon.zendesk.com/hc/en-us/articles/115005631963-W...

walterbell 9y ago
Do you recall which rule/law required unbundling of charges?
- shabble 9y ago
  no, I'm just going from a fairly hazy memory of some article, so it may not be the case at all. Could also have been something contractual with the payment processors relating to fraud detection or prohibited item/services, but it seemed like it might threaten their current payment setup. I'll see if I can find anything, but something in the firefox 56-57->52 ESR downgrade appears to have eaten all of my profile's History, and I'm not sure I can be bothered rummaging through external backups :)
  - walterbell 9y ago
    Found this: https://subfictional.com/my-theory-patreon-doesnt-want-to-be-a-money-services-business/ https://subfictional.com/my-theory-patreon-doesnt-want-to-be...
- cjg_ 9y ago
  This is most likely due to EU's new PSD2 regulations (see https://stripe.com/connect/eu-guide https://stripe.com/connect/eu-guide)
  - 9y ago

egypturnash 9y ago

I'm a creator who uses Patreon. Most of my support is $1 pledges; I have a couple small pledges I make to other creators, as well. I heard about this entirely through people talking about it on Mastodon. Didn't get any email from Patreon about this, not even lost in my spam folder; the only email I have from Patreon going back for a while is "hey you got paid", "someone made/changed a pledge", and "someone commented on one of your posts". I'm not anyone huge, I make about $800 a month on a really productive month, and I don't make videos which is sometimes all Patreon seems to care about - I quit subscribing to their creator newsletter because it was nothing but chirpy articles on why and how you should be making video content!!11!! - but I kinda feel like, I dunno, maybe I should have had, like, some email in my inbox about this? ---- I really hope that everyone (including me) is misreading the detailed explanation of How This New Fee Structure Works, because it sure does sound like they're going to be imposing a 2.9%+35¢ transaction fee to every single pledge before they add up all of the pledges you've made to the dozen creators you might support on Patreon, instead of after. Which adds up really quickly. If this is the case, I guess I get to see if being a Featured Project twice on Kickstarter is going to be of any help in getting into their new invite-only Patreon-alike d.rip... edit: They updated the FAQ page on the new fees to address the concerns of the per-thing creators like me. https://patreon.zendesk.com/hc/en-us/articles/115005631963 https://patreon.zendesk.com/hc/en-us/articles/115005631963 >Q: How does this impact me as a per-post creator? >A: As a per-post creator, your patrons will see the 2.9% + $0.35 service fee added to all paid posts. For example, if you are a per post creator making two paid posts per month, your patrons will be charged 2.9% + $0.35 for each paid post. (Italics mine.) are they, like, completely unbundling all of their charges from each other now? Why are we even using Patreon any more if that's the case?

finkin1 9y ago
Here's the email I got at 11:23AM this morning: "Dear patron, Your support is truly changing the lives of creators around the world. You give creators a reliable paycheck that enables them to do their best work. Thank you thank you thank you. In order to continue our mission of funding the creative class, we’re always looking for ways to do what’s best for our creators. With that, we’re writing to tell you of a change we’re making so that all Patreon creators take home exactly 95% of every pledge, with no additional fees. Aside from Patreon’s existing 5% fee, a creator’s income on Patreon varies because of processing fees every month. They can lose anywhere from 7-15% of their earnings to these fees. This means creators actually take home a lower percentage of your pledge than you may realize. Our goal is to make creators’ paychecks as predictable as possible, so we’re restructuring how these fees are paid. Starting December 18th, we will apply a new service fee of 2.9% + $0.35 that patrons will pay for each individual pledge. This service fee helps keep Patreon up and running. We want you to know that we approach every change with thoughtfulness for creators and patrons. By standardizing Patreon’s fees, we’re ensuring that creators get paid to continue creating high quality content. If you have questions or would like to learn more, please visit our FAQ here. Sincerely, The Patreon team"

kareldonk 9y ago

This is why cryptocurrencies exist and are important. Cut the middlemen. Fast.

kirillzubovsky 9y ago

We used to run a marketplace for designers and one of the things we learned (too late) was to charge more. Pick a number, double it, and you are still probably not charging enough. You can't run a service on dog food forever. Sure Patreon raised funds, but those funds can't subsidize them for a lifetime, they gotta get sustainable and do it fast. There is not a chance they will be wasting time to build their own credit-card processing, so Stripe fees are here to stay. Although contributors are important, Patreon would have nothing without their creators. Creators make the content which people pay for, and creators need to put food on the table to keep doing what they are doing. If you are a creator making $2,000 a month, for example, then an extra $100 is an extra trip to the grocery store, and that's important. If someone wants to fund a creator, they will, and the extra couple of bucks isn't going to discourage that. Furthermore, I suspect Patreon has data on how much is being contributed by each user. I doubt, like the top comment suggest, that 1 person on the platform would fund 100 creatives. Probably 1:3 ratio, with a couple of outliers, is most likely. This is a good change. p.s. If they don't have it yet, expect Patreon to start partnering with places like Teespring to offer merch by their creators. It just makes sense.

trowawee 9y ago
> If someone wants to fund a creator, they will, and the extra couple of bucks isn't going to discourage that. I'm explicitly hearing the opposite from creators on Twitter. People are already seeing patrons defecting from projects over this.
- kirillzubovsky 9y ago
  Like Jason Lemkin said, the customer who churned is the customer you've never had.
  - freeone3000 9y ago
    Well, small problem with that - words have meanings. They were a customer, in that they were giving Patreon money. Now they are not a customer. It's not that they were never a customer, because they were giving Patreon money. And now they're not.

anigbrowl 9y ago

This is why I have been skeptical of Patreon as a revenue source for working artists. I don't like the whole copyright regime and would drastically alter it, but the basic idea of a fungible copyright is a lot more bankable than renting a tin cup from a monopoly provider. Not hating on Patreon which I admire in general, but a single provider is undesirable compared to federated micropayments.

panic 9y ago

It's worth remembering that less than three months ago, Patreon raised $60M in a series C (https://patreonhq.com/new-round-funding-816d5a592477 https://patreonhq.com/new-round-funding-816d5a592477): I’ve got some exciting news! Patreon has just secured an additional round of financing ($60M!), which means we will be scaling our team, building faster, and building more — all in service of getting you paid what you deserve to be paid, for the value you give the world. YESSS! So why is Patreon changing their fees now, when they just got a ton of money and can basically do whatever they want in order to grow? Their Zendesk article (https://patreon.zendesk.com/hc/en-us/articles/115005631963 https://patreon.zendesk.com/hc/en-us/articles/115005631963) isn't much help: Q: Why is Patreon doing this now? A: Patreon exists to allow creators to get paid what they deserve to be paid, for the value they give the world. This is awesome and to continue this vision, we need to constantly evaluate our processes. As we work to deliver bigger and better features for creators and patrons in 2018, we felt like sooner than later made sense to put this change into effect. This doesn't actually answer the question: why do the fees need to be changed at all, whether sooner or later? Were creators asking for this change? What was wrong with the way it worked before? The obvious answer is that Patreon needs more money for some reason. But… they just raised a bunch of money. So I really don't understand how this change makes sense or helps anyone.

TillE 9y ago
> Were creators asking for this change? Nope. And the absolutely universal response, from tiny artists all the way up to Chapo Trap House (the largest Patreon creator by far) has been firmly against this change. But investors put in money expecting to get more money out. That's the only credible explanation I can see. They're lucky that Drip isn't up and running yet so there can't be an immediate reaction.
- JeffreyKaine 9y ago
  This was likely the strategy. The board wanted more profit, knew they needed to change some things, and decided to do it before a real competitor made it to the scene.

Paul-ish 9y ago

I wonder if this change has anything to do with the median number of creators the typical Patreon users supports. A lot of angry people here sound like power users, but that might not representative of the overall userbase.

zAy0LfpBZLC8mAC 9y ago

Oh, closed systems will use their semi-monopoly position to raise prices? Who would have thought ...

zapt02 9y ago

This is doubly weird because Patreon only charges users once per month, so they are really only paying one transaction fee per user. They also charge VAT for european pledgers, already bringing up the pledge amount by 25%.

NelsonMinar 9y ago

$0.35 fee on a $1 donation is a lot of friction. The $0.35 / donation fee doesn't make sense to me. It sounds like a credit card transaction fee. But Patreon charges my CC once a month. So why not charge me the $0.35 once a month? Why once per donation? The 2.9% part seems fine to me. So does shifting the costs to the donators. But why charge me per donation instead of per credit card transaction? Edit this article has a nice analysis: https://www.pretty-terrible.com/funny-money-patreon-style/ https://www.pretty-terrible.com/funny-money-patreon-style/

dtech 9y ago
Exactly. If you support 10 creators they get to keep 90% of the 10x$0.35. The argument that it's for payment processors is utter bollocks.
- jasonlotito 9y ago
  Why do you think it's bollocks? It makes perfect sense. A transaction fee + % is common with payment processors. Couple that with new rules coming down the pipeline (as well as common sense when it comes to processing transactions for other people), nothing about the pricing is unreasonable. Quite the opposite, in fact.
  - Anderkent 9y ago
    They're charging 0.35 for moving some balance from one big transaction they charged me into accounts of the people I support. It's basically charging for an atomic move. You seem to assume that each pledge is a separate transaction. But the entire advantage of patreon over doing pledges directly is that all my pledges are one transaction with them, and all pledges someone receives are one transaction. Sure, charge me 0.35+small % once a month as transaction fee.
    - jasonlotito 9y ago
      > You seem to assume that each pledge is a separate transaction. Incorrect. I know how Patreon used to work before this announcement. My understanding is they are splitting it up into separate transactions, which makes sense if you understand how credit card processing, monetary transactions, and all the legal ramifications around them operate. What I do hear is a lot of people who haven't worked in the CC industry making baseless assumptions about how all this works.

protomyth 9y ago

Hold up, they take one charge on my PayPal and if I understand this correctly, they are going to charge me for each of my pledges? So, 4 x $1 pledges that are taken as one charge will now cost me $5.52 ($1 + $0.35 + $0.03) * 4))?

kevin_b_er 9y ago
Yes. They only charge you once, though. So the extra fees aren't payment processor fees anymore and they pocket the rest. Calculate the differential on the paypal transaction fee and you'll arrive at patreon making some sweet percentages. Patreon used to have PayPal charges 5% + $0.05. So let's presume they're paying the same. They charge you once for $5.52. Paypal gets $0.326 + $0.05 out of it. $3.80 goes to creators. Instead of Patreon making $0.20, they now make $1.344. Yes, you read that right, Patreon is making $1.344. ~35% profit margin vs 5% off your donation. They've multiplied their cut several times over.

huac 9y ago

I'm fairly sure this is tied to anti-money laundering rules (but would be happy to be corrected). Basically, if Patreon bundled patron payments and then paid them out to creators, it could be construed as transaction laundering. The basic problem is that it would be cheaper for everybody involved if Patreon would charge each patron a bundled amount for all their supported campaigns, and then pay out to each creator everyone's support to them. This means that there are N + M transactions, where N is number of patrons and M is number of creators. However, due to a myriad of rules, they actually need to pay out N * M transaction fees, because each patron's contributions will be going more or less directly to each creator (minus Patreon's cut of course). The extra fees more accurately represent the cost of doing business with credit cards. This article explains the AML rules in this area: https://www.trulioo.com/blog/transaction-laundering-a-growing-threat-to-the-payments-ecosystem/ https://www.trulioo.com/blog/transaction-laundering-a-growin...

xchip 9y ago
If that is the concern they can go after tax havens, there is where the billions are.
raesene9 9y ago
I'm not sure that this change has anything to do with AML. Patreon already does bundle payments to creators. I get billed monthly for my various followings. That won't change at all under the new system (AFAIK). What changes is that Patreon charge me for every pledge instance that I use, which is basically crap as it doesn't cost them any more if a creator has 1, 5 or 10 pledges per month, they bundle it up and make one payment to the creator. I have no problem with the idea of Patreon charge patrons rather than creators for fees, but the "per pledge" billing is terrible.
endgame 9y ago
If it's AML, then Patreon should come out and say it's AML, and point to the rules they have to comply with. Not write feelgood fuzzy bullshit that actually ends up with them taking a huge slice of the pie.
rsynnott 9y ago

xchip 9y ago

Greedy Patreon.com, I already deleted my account. You need to send an email to: disable@patreon.com

dawnerd 9y ago
Or just click disable in the dashboard. Pretty easy, actually.
- xchip 9y ago
  Thanks! It seems that this option only shows up in the desktop version and not in the mobile version!

deleted 9y ago

[deleted]

gkya 9y ago

I was considering Patreon for some stuff I planned to publish in somewhat distant future, but now this makes me suspicious. On such a platform I'd rather want to have numerous people that give me $1 monthly rather that a bunch that pays some three-figure sum, should I want to live off those pledges. If a $1 pledger decided to not support me anymore, I wouldn't have lost a big part of my income, but if instead someone who paid $100 or $200 decided to stop paying, that'd be a big change. I'd actually prefer to not allow people pay me more than $10 or 20 to not allow that kind of thing happen, and to not allow myself to have the illusion thereof. As far as I understand, this new scheme will punish the kind of pledger that I said above I'd prefer: who pledges a couple $ or so. If I want to pledge $10 monthly, I'd better give it to a single creator than to 5-10 creators. In this case as a potential creator I'd be happier with a bigger cut from what I receive in expense of free payments on the patron's side.

lathiat 9y ago

Lots of people unsubscribing apparently, screencap: https://twitter.com/lazygamereviews/status/938845405336436736 https://twitter.com/lazygamereviews/status/93884540533643673...

Obi_Juan_Kenobi 9y ago
I just did. I hope others do as well.
- gordaco 9y ago
  This sucks because I'm tempted to do it as well, but this means that I can't support the content creators that I like. I really hope that a better alternative comes soon. I've seen a lot of people using https://ko-fi.com/ https://ko-fi.com/ (and I've used it to donate to them a few times), but it's not exactly the same.
  - tortasaur 9y ago
    Creators won't bother to find alternative platforms until the users leave the harmful dominant one.
strictnein 9y ago
That sucks. LGR is great.

joelthelion 9y ago

Another perfectly good startup killed by the dreams of grandeur of silicon valley investors. Not everybody company is supposed to be the next Google, guys.

rinon 9y ago

Great summary of the math from reddit: https://www.reddit.com/r/patreon/comments/7i2kqd/patreon_will_start_charging_patrons_a_credit_card/dqvrb9d/ https://www.reddit.com/r/patreon/comments/7i2kqd/patreon_wil...

Obi_Juan_Kenobi 9y ago

I just cancelled all my pledges. This is absurd. The whole point of Patreon was to bundle small charges to avoid these fees, and to hopefully make support more reliable/consistent for creators. If they're going to fail outright on the former pledge, then I want nothing to do with them. I strongly urge others to cancel pledges, as this is the strongest feedback we can provide. There are many ways to support creators.

runj__ 9y ago
The really sad part is that they tricked people into potentially leaving their job and then ripped the carpet out from under them. I'm really thinking of dropping pledges and simply mail them some cash but I'm afraid I'd skip the last step and hurt the creators I love in the end.
- ZenoArrow 9y ago
  I dropped my pledges off the back of this news. I was only supporting one creator, so it wasn't that dramatic. Also, I left a comment before I cancelled indicating I was only leaving because of Patreon's business practices, and suggested I'd like to support the creator again if they open up an account with a competitor. Liberapay would be my preferred choice but as long as Patreon get the message and the creators don't have to suffer, some good can come out of it.
em3rgent0rdr 9y ago
I canceled all my pledges too! Sure they were only $1/month each, but there were quite a few of them!

robryan 9y ago

Why is someone as big as Patreon paying 2.9% + 35 cents? Even stripe should be able to do better than that?

dawnerd 9y ago
They're not, thats the point. They say in their FAQ their stripe rate is 1.9%

chx 9y ago

Let's run the numbers: https://blog.patreon.com/updating-patreons-fee-structure/ https://blog.patreon.com/updating-patreons-fee-structure/ For a $1 pledge: previously creators took home 85c at least, so Patreon was maxed out at 15c. Now they will charge the patron 37.9 cents and the creator an additional 5c. So now they are maxed out at 42.9c. If 15c was enough to break even this means 27.9c of pure profit. That's a _very_ nice profit rate! (The rent seeking is too damn high.) Let's presume patrons decrease their patronage so they pay the same as before, so if they paid x before now they pay 1.029y+0.35=x ==> .97x-0.34. The patron takes home 95% of this, .92x-0.32 Previously they took home at least .85x. So we are looking at 0.07x=0.32 ===> 4.57 So if you were pledging below 4.5USD (let's be realistic: 5 USD, noone pledges cents, not sure the platform lets you) and drop your pledge such that Patreon charges you the same, then this hurts your creator. And many won't react rationally and do the .97x-0.34 calculation, just cancel because hot damn, did a company I authorized to charge me X amounts just unilaterally decided to charge me more without proper clear notice (I just checked my home page and I do not see a big read warning this month I will be paying more either on the home page or the pledges page.) Oh and many creators have various perks at 5USD which now they need to drop to 4.52 USD (again, does the platform allow for cents?) and encourage their patrons to drop to that level. Patrons in this case pay 5 USD still and the creator takes home 4.29. Previously, the creator took home 4.25-4.65.

ThrustVectoring 9y ago

I cancelled all my pledges over this, it's a huge breach of trust IMO. I set things up to authorize Patreon to charge me $X per month. They unilaterally decided to use that authorization to charge me $X + service fees per month going forward. They announced this by sending me an email that takes several minutes and multiple paragraphs for me to understand that the cost to continue my Patreon subscription would go up next month. I don't give authorization for recurring charges to companies that unilaterally decide to foist price increases on me.

ridgewell 9y ago
Agreed, I've similarly cancelled all my pledges and I am very disappointed that Patreon has done so without a clear email and explanation of why to boot.

buovjaga 9y ago

Flattr is making the most out of the situation :) https://blog.flattr.net/2017/12/patreon-fees/ https://blog.flattr.net/2017/12/patreon-fees/

phjesusthatguy3 9y ago
"We still think Patreon is a great solution for creators, but they now seem to be less about supporting creators plural, and more about supporting a creator singular (or perhaps one or two creators)" Does anyone know what they're talking about with the "or perhaps one or two creators" part?
- trowawee 9y ago
  With the fee change, if you have a budget of, say, $15 to spend on creators on Patreon, it makes sense to split that into as few pledges as possible to minimize the number of times you pay the fees.
- therealdrag0 9y ago
  My guess is assuming this will change consumer behavior. Suppose bob sponsored 5 people at 1$ each before. Now if Bob gets charged a fee for each of the 5 contributions, he might change his election to 5$ to his single favorite creator, so that he is only charged 1 fee instead of 5.
zu03776 9y ago
So instead of losing 2.9% + 0.35 on donor and 5% on recipient, why not lose 16.5% instead? #winning From the FAQ at https://flattr.com/faq#23 https://flattr.com/faq#23 : We take 7.5% of received revenues (to keep Flattr running, develop further and handle chargebacks and fraud). Our payment provider (MangoPay) charges 9% of received revenues (please see this blog post for more information). These fees are withdrawn on the 1st of the month for revenue received in the prior month. Whenever money is withdrawn (currently the minimum amount that can be withdrawn is $10) a $3 fee is charged.

whiskeySix 9y ago

I was sending a favorite podcast of mine (It's Just Banter) $1 a month. But with a 35 cent fee to send 1 dollar, it seemed crazy, so i cancelled it. I'll find another way to support TC and Jake.

lindner 9y ago

No one has mentioned https://liberapay.com/ https://liberapay.com/ ? They seem to deal with this problem by letting you fund a donation account and then disburse funds on a periodic basis. This is also similar to donor advised funds so I'm not sure why Patreon is doing this when other alternatives are available.

kemenaran 9y ago
I just cancelled my two pledges on Patreon, and migrated them to Liberapay. The process was surprisingly smooth and easy. We'll see how it works on the long run, but for now Liberapay looks like an excellent alternative. (Also they don't take automatic fees for their own finances; tip is on a voluntary basis).

denweb 9y ago

Patreon supports fascism so Kickstarter is where to spend your money! Queue the Nazi supporters!

1_2__4 9y ago

So assuming this is yet another VC-funded firm being pushed to only go after "whales" and cull undesirables... Who are the whales, and who are the undesirables? My tinfoil hat says adult art is made up of more/smaller pledges and they're hoping this will run them off the service. That's typically why companies do this.

ProfessorLayton 9y ago

It is definitely a money grab. They're even making it so that you can't use your patreon balance to pay other creators, ensuring you'll need to pay their "service fee" https://twitter.com/zandravandra/status/938897708286390272 https://twitter.com/zandravandra/status/938897708286390272

Fomite 9y ago

"Concern" nothing. I've already lost enough patrons on the campaign that supports a side project to eat up a sizable portion of the supposed benefit to me.

Fomite 9y ago
It's now up to twice what the benefit would have been in lost Patrons.

hysan 9y ago

Ok, as someone who pledges a few dollars to many creators, this sucks. I also haven't seen any big improvements to their platform featurewise; I've been repeatedly asking for email digests since they took over Subabble and they keep replying with, "Great idea. We'll pass it along." So no idea what they need more money for. I'll probably be stopping my pledges after trying to discuss this with the creators I support (and Patreon but they probably won't say much).

AlexandrB 9y ago

Patreon has just updated their blog with the rationale for the change: https://blog.patreon.com/updating-patreons-fee-structure/ https://blog.patreon.com/updating-patreons-fee-structure/ Unfortunately, changing the payment structure to what they're proposing - while easier to understand - removes any payment-processing value that Patreon was providing. Putting the friction back into these kinds of micro-donations. Seems like a bad business move to me. The hard problem here was making micro-donations cost-effective, not creating a website where creators could host links to content. Edit: The relevant paragraph. > To do that, we need to move our payments system to treat your pledges like any other subscription service. In other words, we need a system that charges patrons at the time of their initial pledge, and on the anniversary of their pledge each month thereafter. So every individual monthly pledge will result in a CC transaction now. I'm guessing in cases where two pledges fall on the same day Patreon will still do one CC transaction and pocket the $0.35 they saved?

tmorton 9y ago
Ok, that link makes things clearer, and I can understand their position a bit more. But they missed the BIG OBVIOUS solution: charge a pro-rated "first month" pledge, then combine all subsequent pledges like they do now. For example, if I become a patron at the $10/month level, on the 15th of the month, they can charge me $5 immediately. Then the $10 gets added to my regular charge on the first of the month, and everyone saves in processing fees. As a patron, I would much rather get one charge per month on the first. The current schedule works great.
- trowawee 9y ago
  No no no, you just don't understand! Solving the issue of "how do we handle mid-month sign-ups for a service that bills monthly" is a nigh impossible problem that requires at least 40 to 50 Stanford- or MIT-trained engineers.
- rinon 9y ago
  There are often privileges and perks associated with being a patron of a certain creator. These perks aren't pro-rated, thus subscribing late in the month for a day or two might be a viable way to cheat this system. Personally, I don't think this is a huge deal, and, if this is their reasoning, it's a mistake.

rcthompson 9y ago

Since the graphs is Patreon's own blog post are so grossly misleading, I made my own: https://mneme.dedyn.io/shiny_users/ryan/patreon-fees/ https://mneme.dedyn.io/shiny_users/ryan/patreon-fees/ Not surprisingly, the look nothing like Patreon's graphs. For any pledge of $4 or less (and probably a lot more than that), Patreon is now taking more of the pledge for themselves. Since this likely represents the vast majority of pledges, Patreon is effectively raising their prices without admitting that that's what they're doing.

cbcoutinho 9y ago
This is really clean, how did you do this?
- bllguo 9y ago
  Not the author, but this is a R Shiny application. If you mean the plots, they are made with ggplot, a package in R. https://shiny.rstudio.com/ https://shiny.rstudio.com/
  - rcthompson 9y ago
    Yes, that's right, Shiny for the web page and ggplot2 for the plots.
totallysafe 9y ago
probably because your `Patreon_Old_Max_Fee` and `Patreon_Old_Min_Fee` are wrong. The portion taken has never been as low as 2% on a $1 pledge. From their old FAQ: "Stripe charges 1.9% + $0.30 per transaction. PayPal charges 5% + $0.05 per transaction." So, under the old fee system, for a $1 pledge, the service fee was either $0.32 for Stripe or $0.10 for PayPal. On a $10 pledge, it was $0.50 for Stripe and $0.55 for Paypal.
- rcthompson 9y ago
  I just went based on the information given in their blog post, which said "an additional third party processing fee that ranged from 2% – 10%". Edit: I'm not exactly sure how to calculate the fees based on the info in their FAQ. Taking Stripe as the example, they say the fees are 1.9% + $0.30 per transaction. So if I pledge $10, I guess that means that Patreon charges me an amount $X such that X * 1.019 + 0.3 = 10? And if so, do they take their own 5% cut out of $10 or out of $X? Edit 2: I took my best stab at it and replaced the min/max with specific entries for Stripe and Paypal.

petercooper 9y ago

I think this is more psychologically jarring than financially jarring. It's like if Amazon turned around and said, we're making Prime free, but it's a flat 25 cents for your previously free delivery. Doesn't sound a lot, but that's a psychological barrier that'll pop up every time when you're about to order something. Consumers really love knowing up front what they're committing to pay. Adding extra charges on is not going to help at all with adoption.

em3rgent0rdr 9y ago

YouTube, now is a great opportunity to integrate your own patronage system (or even a simple per-video or per-channel donate button)!

quadrangle 9y ago

It's actually not about new fees. They are adjusting fees in a funny way, but it's all about trying to make their freemium assumptions work. Most creators are using Patreon to enable a partly-gratis partly-paywalled business model. None of this would have come about if it were just about donating to creators you like. https://wiki.snowdrift.coop/market-research/other-crowdfunding#fn5 https://wiki.snowdrift.coop/market-research/other-crowdfundi...