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I don't understand why people are acting like this is ridiculous and will obviously fail. 30% is the same cut that Apple and Google take for everything that goe
by Deimorz 8y ago
I don't understand why people are acting like this is ridiculous and will obviously fail. 30% is the same cut that Apple and Google take for everything that goes through their app stores, including all in-app purchases. It's the same cut that Steam takes. It's the same cut that YouTube takes for channel membership. Twitch takes an even larger cut: 50% from subscriptions. It's extremely well-established that people are comfortable with platforms taking that large of a portion.
Patreon is the outlier, and they're dropping hints now that it probably isn't going to last: https://www.cnbc.com/2019/01/23/crowd-funding-platform-patreon-announces-it-will-pay-out-half-a-billion-dollars-to-content-creators-in-2019.html https://www.cnbc.com/2019/01/23/crowd-funding-platform-patre...
- deleted 8y ago[deleted]
- ardy42 8y agoThose cuts are egregiously large, IMHO. Those platforms should be hacked into pieces until competition forces them to fall (or have their pricing regulated like a utility's).
- vntok 8y agoTheir billion users seem pretty content to use them in spite of the numerous alternatives.
- chillacy 8y agoI have a mac app which is exclusively available on the App Store, so I pay 30% of my revenue to Apple. I could spin up my own system but then I have to build out payments (credit card processing fees), distribution, updates, beta testing, and figure out discoverability. In the end, my app isn't big enough to build these things out myself, but at least if I wanted to I could. Different story on iOS.
- maksimum 8y ago> beta testing, and figure out discoverability I feel like these two are much harder than the others. How does the app store help you with beta testing? Isn't discoverability basically a lottery?
- chillacy 8y agoOh yea, I get beta testing from hockeyapp since testflight isn't out for the mac. By discovery I mean lots of users go on the app store and search for apps to download directly, no marketing or SEO needed. Adding the website, trials, SEO, etc helped a bit probably, but my app seems to just live on app store organic searches.
- ardy42 8y agoI'm not saying those platforms don't provide value and that they shouldn't charge anything, I'm just saying that 30% is egregiously high. I don't know what Apple's App-Store operation costs are, but my gut feel is 5-10% would be more realistic rate to charge.
- chillacy 8y ago30% is high, I agree. And I also pay over 30% to the government for taxes after that too. But at the end of the day what can I do? There's not really competition to drive the commissions down. If another app store came up and offered 10% commissions and the audience I'd go there instead.
- kalleboo 8y agoOne thing that helps justify it to creators for all these services (including Facebook) over Patreon is that they at least provide hosting, usually of bandwidth-heavy video files or live streaming. Patreon just hosts the equivalent of a Twitter feed linking to YouTube videos.
- riffraff 8y agoI don't use patreon but isn't there often 'patron-exclusive" content? I thought that content was hosted on patreon itself.
- oliveshell 8y agoI’m not actually sure if Patreon hosts video, but the one creator I subscribe to, AvE, posts videos a early for patrons as unlisted YouTube videos. After a week or so, they go public.
- kalleboo 8y agoAll the patreon-exclusive videos I've seen (5+ channels) have been unlisted YouTube videos. I've never seen a video hosted on patreon.
- pravda 8y agoYes, but Apple and Google have monopolies. Not a "gamer", so I don't really know what "Steam" is/does, but I suspect they must have some kind of moat. I'm not sure that people are comfortable with Patreon taking a 10% cut. I'm not happy about eBay taking a 10% cut, but they have a monopoly. Jack Ma, please bring Taobao to USA!
- tapland 8y agoSteam is, despite there being a lot of competition, the de facto one stop shop for digitally distributed PC video games (and is in itself a kind of DRM protection). I think that a large proportion of gamers would be happy for almost all of the competition to disappear in favor of getting everything on the Steam platform.
- TeMPOraL 8y ago> I think that a large proportion of gamers would be happy for almost all of the competition to disappear in favor of getting everything on the Steam platform. Yup. Competition is good for the market in general, and for consumers in a more indirect way, but balkanization of content space and having to deal with the crappy apps of me-too competitors is a real pain. (There's probably some economical theory around this that I don't know, but my gut-feel classification is this: competition is good for consumer when competitors are providing the same, or at least directly substitutable, goods and services. Individual video games - and music, movies, books - are not substitutable goods, so the competition is useful only to the extent you can get the same game/movie from any of the competitors. Exclusive publishing deals make competition harmful to the consumer.)
- speedplane 8y ago> There's probably some economical theory around this that I don't know ... competition is good for the consumer when ... Yes, there is a pretty standard economic proof that much of capitalism is based on. It says that an economy is most "efficient" (you can take a class on that word), when three pre-requisites are met: 1. Perfect information: Everyone knows the value of everything. 2. Commodities: Products created by competitors are equivalent. This works well for oil and bananas, but not so well for much else. 3. Access to Capital: This means new competitors can start competitors and enter markets easily. This isn't so easy when there is regulation, monopolies, or network effects. In short, there is a set of circumstances when things work really well. However, in the real world, those circumstances rarely arise.
- gamblor956 8y agoThe problem isn't the %. It's the perpetual IP license, which grants Facebook complete non exclusive rights to the Creator's IP, including licensing it to third parties without further pay to the Creator.
- Deimorz 8y agoPatreon requires you to grant them an extremely similar license: > You keep full ownership of all content that you post on Patreon, but to operate we need licenses from you. > By posting content to Patreon you grant us a royalty-free, perpetual, irrevocable, non-exclusive, sublicensable, worldwide license to use, reproduce, distribute, perform, publicly display or prepare derivative works of your content. The purpose of this license is to allow us to operate Patreon, promote Patreon and promote your content on Patreon. We are not trying to steal your content or use it in an exploitative way. (from https://www.patreon.com/legal https://www.patreon.com/legal)
- girzel 8y agobut... sublicensable?
- Deimorz 8y agoI don't know what you're asking. It says "sublicensable" in there, yes.
- himlion 8y agoI think he means that's the most unacceptable from the bunch
- fgonzag 8y agoI think it makes sense if the business relationship is actually artist <--> patreon <---> consumer. The client pays patreon, so patreon must sublicense the content to him. Otherwise I'm lost.
- 8y ago
- autokad 8y agoI truly believe its these excessively large cuts that make it impossible for these platforms to really grow, grow to something actually substantial. I know what some are thinking, these platforms are extremely successful. this is partially true, but they haven't thrived anywhere near I think they are capable of.
- JimDabell 8y ago> 30% is the same cut that Apple and Google take for everything that goes through their app stores, including all in-app purchases. Both Apple and Google drop subscriptions to 15% after the first year.
- IanCal 8y agoTo add to this, while the cut is 6 times larger, you only need a 40% larger audience to make up for the cost. I could see that happening given that you'd have a huge base of people with accounts already and it's a platform for sharing content.
- duskwuff 8y agoApple and Google provide significant added value in their app stores: distribution, discoverability, licensing, testing (at least in Apple's case)... etc. Patreon is not that. At its heart, it's primarily a service for collecting donations. There is some content hosting, but that's kind of a secondary feature.
- kosievdmerwe 8y agoWhat content can you host on Patreon? I only really have experience with authors and text is cheap to host. Can you host video?
- corobo 8y agoVideo no, but you can host audio. They have functionality that lets you set up a patron-exclusive podcast for example
- makomk 8y agoNope, Patreon doesn't host video. Generally I think people upload their Patreon-exclusive videos to YouTube as unlisted and use that as a free hosting service.
- duskwuff 8y agoText and images. It's pretty basic, mostly meant as a way for project creators to provide updates on what they've been doing.
- quadrangle 8y agoPatreon is actually largely a paywall-service. It's about collecting donations AND tying that to accessing paywalled stuff.
- erikpukinskis 8y agoI seriously doubt Apple’s cost to administer the App Store is double digit percentages of revenue. The 30% is a tithing to Apple for creating iPhone in the first place. Patreon could sort of justify the same thing. Their real product is just the idea that anyone could be a monthly patron at all. That’s worth a LOT to creators. People didn’t think that way before Patreon.
- acolytic 8y agoDisclaimer: I'm working on a platform that allows you to contribute to open source as a whole and which distributes your money proportionally to how much you care about various projects. I'm thinking of taking 30% as well. I think people are just getting hung up on the number without thinking deeper on what it costs to make things sustainable. 5% of the 500 million Patreon claims to be able to process is 25 million. According to their team picture on their website (https://www.patreon.com/about https://www.patreon.com/about), they have 74 employees. That amounts to $330000/employee. Halving that to account for benefits (chair, table, wifi, insurance, etc) leads to $165000/employee for salary which seems reasonable average for a senior employee in the Bay Area. Notice this doesn't account for infrastructure, taxes, outside counsel/contractors, etc. It's crazy that after working for 6 years and creating half a billion of value, a company can barely afford to keep the lights on, let alone make a profit. I agree 30% just makes sense for a platform - you need enough to hire properly, pay all expenses and make enough of a profit for this to make sense. The alternative is half a billion of value disappears to save on a few million which I think is incredibly myopic.
- zzzcpan 8y agoCommon, as a VC-backed company Patreon doesn't even pursue a sustainable business model. Most of those 74 employees are for anything, but sustainability. When they first started they had like a few people and pretty much the same service as they do today.
- gamblor956 8y agoIf you're charging 30% then donors and the projects they support are better off leaving you out of it and just interacting directly with each other as you don't appear to be providing any significant value to either side.
- falcolas 8y ago$165,000 for a chair, a table, wifi, and insurance... is a really outlandish assumption about per-employee costs. An high quality chair is, say, $500 amortized over 5 years. A table, $100 amortized over 5 years. Open office space (at 65 square feet per employee and $100 per square foot per year) is about $6,500. Insurance is about $7,000 a year per employee - total. So, under 10% of that extra per-employeee revenue is what the actual costs for those "bonuses".
- collyw 8y agoI would be more concerned about platform censorship with both of them.