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> To hit a few hundred million in revenue a year and earn their valuation, they're going to need to start competing with not just YouTube and Twitch, but major

> To hit a few hundred million in revenue a year and earn their valuation, they're going to need to start competing with not just YouTube and Twitch, but major music labels and indie-friendly TV/film studios. They're going to need to recruit the new Taylor Swift, the new Lady Gaga. Hell, they may need to recruit the current Taylor Swift and Lady Gaga. No one that can be Taylor Swift or Lady Gaga needs Patreon because they can already monetize their content through mainstream channels. There is no to little value Patreon can add on top of that. Patreon exists to enable monetization for the long tail of creatives, which means they need to increase breadth, not depth, and not lose the current growth in demand for these channels to competition.

chipotle_coyote 6y ago
I love the idealism, but the problem with most long tails is that in practice they are way more weighted to the head than we tend to think they are. I found what seem to be slightly more concrete numbers than I had in my original post: less than 4% of Patreon's total number of creators make $1K or more a month, but they account for about 70% of Patreon's revenue. Their single top-grossing creator accounts for a full percentage point of revenue.[1] The bottom half or so is probably alarmingly close to a rounding error. I could certainly imagine Patreon making a pitch to bigger creators about taking control of their own destiny and keeping more of their money. Would it work? I don't know. But a single creator who averages $1M a month is twice as valuable as a thousand creators who average "only" $500 a month. If you're idealistic, you may still prioritize the thousand, but if you've taken multiple rounds of VC money at a multi-billion dollar valuation, you're gonna look real hard at what you can do to bring in that one. [1]: https://techcrunch.com/2019/02/12/patreon-business/ https://techcrunch.com/2019/02/12/patreon-business/
- acituan 6y ago
  I don’t see this from an idealism perspective at all. Patreon is just a payment processor platform that made it easy for the long tail to have subscriptions, that was their unexploited profit opportunity. That opportunity diminishes as the monthly revenue numbers increase, because if people are making enough, they will just have other, custom channels available to them. In other words, no one who can average $1M a month has anything more to gain from moving to Patreon’s platform, or any other payment processing platform for that matter. > less than 4% of Patreon's total number of creators make $1K or more a month, but they account for about 70% of Patreon's revenue. That describes the shape of the curve, but doesn’t describe the total volume. If the overall market size is increasing, which it does, regardless of the thin long tail, their aggregate revenue will increase. It doesn’t need to do anything special, it just needs to make sure it is not going to lose its share of the ever growing pie.

chipotle_coyote 6y ago

I love the idealism, but the problem with most long tails is that in practice they are way more weighted to the head than we tend to think they are. I found what seem to be slightly more concrete numbers than I had in my original post: less than 4% of Patreon's total number of creators make $1K or more a month, but they account for about 70% of Patreon's revenue. Their single top-grossing creator accounts for a full percentage point of revenue.[1] The bottom half or so is probably alarmingly close to a rounding error. I could certainly imagine Patreon making a pitch to bigger creators about taking control of their own destiny and keeping more of their money. Would it work? I don't know. But a single creator who averages $1M a month is twice as valuable as a thousand creators who average "only" $500 a month. If you're idealistic, you may still prioritize the thousand, but if you've taken multiple rounds of VC money at a multi-billion dollar valuation, you're gonna look real hard at what you can do to bring in that one. [1]: https://techcrunch.com/2019/02/12/patreon-business/ https://techcrunch.com/2019/02/12/patreon-business/

acituan 6y ago
I don’t see this from an idealism perspective at all. Patreon is just a payment processor platform that made it easy for the long tail to have subscriptions, that was their unexploited profit opportunity. That opportunity diminishes as the monthly revenue numbers increase, because if people are making enough, they will just have other, custom channels available to them. In other words, no one who can average $1M a month has anything more to gain from moving to Patreon’s platform, or any other payment processing platform for that matter. > less than 4% of Patreon's total number of creators make $1K or more a month, but they account for about 70% of Patreon's revenue. That describes the shape of the curve, but doesn’t describe the total volume. If the overall market size is increasing, which it does, regardless of the thin long tail, their aggregate revenue will increase. It doesn’t need to do anything special, it just needs to make sure it is not going to lose its share of the ever growing pie.