5 ms·

I think the real answer may be that patreon is, actually, a bad business; and that nobody has cracked microtransactions. Separately, while Patreon's charging c

by x0x0 3y ago

I think the real answer may be that patreon is, actually, a bad business; and that nobody has cracked microtransactions. Separately, while Patreon's charging changes seem boneheaded, I'd guess at least a 50% chance that they weren't driven by stupidity but rather by a CFO having a come to jesus conversation with the e-team. Driven by the fact that microtransactions run on a credit card are tough. Their giant raises make more sense if they were eating a ton of fees in an attempt to hold out for scale where enough people (eg I spend $20-ish/mo on patreon) charge enough money that the 5% covers the processing fees.

deleted 3y ago
[deleted]
raincole 3y ago
The author starts the article with "take Patreon's lunch money". What lunch? The one VCs fed them? Is Patreon even profitable?
- Applejinx 3y ago
  See, this is what immediately turned me off the article. I don't WANT a payment system that is about beating up other payment systems in the schoolyard and making them cry. I want a payment system that takes money on my behalf and then pays me with it. I'll put up with a lot of inefficiency if it's boring and predictable. You're gonna have a heck of a time prying me away from Patreon in favor of your new lunch-money taking payment system with crypto and hookers. If you're leading with 'take their lunch money', I don't trust you. I don't trust Jack Conte THAT much, but it's sure a lot more than you.
  - chiefalchemist 3y ago
    To your point, it's foolish to pick a fight with a grizzly bear (i.e., Patroen). It's smarter to ask: where is there a market not being fulfilled? Then if that goes well enough eventually *maybe* you look to square off with the grizz. But to run into the sprawling plenty of room forest intentionally looking for a gizzly? That's foolish.
- dangus 3y ago
  Exactly. The author also dumped on Patreon’s incredibly low processing fee. Who is going to compete with 5% plus payment processing? And they dumped how this processing fee is unsustainable and that the community was mad about changing it. What business is going to disrupt margins like that? That’s like saying “I’m going to sell stuff cheaper than Costco.” Good luck with that!
  - baobabKoodaa 3y ago
    FYI Patreon does not offer the 5% deal to new creators anymore. Now it's 8%.
    - dangus 3y ago
      Right, and that is still low.
      - baobabKoodaa 3y ago
        Sure.
  - carlossouza 3y ago
    Exactly. Race to the bottom
- bakugo 3y ago
  Why wouldn't it be profitable? All they really do is take money from people, give them to other people, and take a cut of it. I was under the impression that Patreon is struggling because their profits aren't enough to balance out the 9 digits of VC money they greedily took in, not because there's no profits.
  - foobiekr 3y ago
    A lot of tech companies are unprofitable due to headcount.
hknmtt 3y ago
"cracking" microtransactions is trivially simple
braza 3y ago
> nobody has cracked microtransactions It's hard to agree on this one. Personal anecdote: In 2010's I worked in a micropayments broker linked with all telecom companies. The whole thing was: that NSFW creators used a shared SMS shared code (i.e. a SMS number that receives messages for several creators and the code (for instance HNCODE25) was used to move money to a balance account) and for each of the payments that people used to do with them the telecom company got 15% slice, and the rest the telecom moved the money to the broker. Another point: In Brazil due to the PIX [1] almost all of those payment platforms (Paypal included) are becoming irrelevant because you can generate random tokens that can be hard to trace, and all the payments occur instantaneously giving enough time for withdrawn before any attempt of censorship and or any policy change. [2] [1] - https://en.wikipedia.org/wiki/Pix_(payment_system) https://en.wikipedia.org/wiki/Pix_(payment_system) [2] - https://news.ycombinator.com/item?id=19867120 https://news.ycombinator.com/item?id=19867120 ... About the article itself, it's surprising to me (and I assume some sort of intentional ignorance here) that even in the current state of technology we do not have a "dumb pipe" payment system as before and we're still relying upon those middle man actors or not-so ergonomic alternatives as P2P crypto.
- viraptor 3y ago
  People like the service that the middle man provides. They may not like the middle man, the fees, etc. but tell someone that "your transactions are not reversible, if you lost your money that sucks I guess, even if we messed up" and they will be happy to pay that transaction fee with another provider instead. Even with the small amounts, you either have to approve each transaction (which leads to another category of scams), or trust someone with access to your account. If you care about spending just $2/mth and not more... that may not be a risk you wanna take.
  - KronisLV 3y ago
    > People like the service that the middle man provides. They may not like the middle man, the fees, etc. but tell someone that "your transactions are not reversible, if you lost your money that sucks I guess, even if we messed up" and they will be happy to pay that transaction fee with another provider instead. This might not be entirely realistic, but the idea of passing that choice on to the end user seems interesting: Payment of 12.99 EUR (VAT of X% included) to $vendor for $service, choose one: [ ] - regular payment, 0.50 EUR fixed fee [ ] - safe™ payment*, 2.00 EUR fixed fee * safe™ payments can later be disputed and reversed, if necessary Or something like that. I mean, regulation aside (this is a thought experiment), I can already choose whether I want to pay extra for tracking for international deliveries and when buying goods, sometimes extended warranty/insurance is offered as an option. Why wouldn't I get the choice whether I want my payments to carry less overhead OR have the protections you'd expect with the "middle man", as a choice within the same payment platform?
Marazan 3y ago
Patreon took venture money despite being bootstrapped. That is behind everyone of their dumb decisions. They had a great model harvesting nickels and then they sold a vision of Taylor Swift being on Patreon to VCs.
shakesbeard 3y ago
I loved Flattr ~10 years ago. You said "I have $40/month" and then these funds were allocated based on which things you flattr'd during the month (there were little buttons on the websites/blogs). Of course you could also say "include this content creator every month". It was so simple and elegant. As a consumer I had cost control, too. Plus there were no micro-transactions, only one charge to me.
- BlueTemplar 3y ago
  Did you miss Flattr 2.0 - a browser extension looking at your engagement ? https://news.ycombinator.com/item?id=15557954 https://news.ycombinator.com/item?id=15557954
  - kzrdude 3y ago
    I used the original flattr and apparently missed the reboot too. Flattr 1 was dead for too long to carry me over anyway.
    - BlueTemplar 3y ago
      There's a 3rd-ish version that stopped promoting the extension and is closer to Patreon but with a set overall rate.
  - karl42 3y ago
    I do not want to support anything that optimizes for "engagement". It penalized all the really useful offerings that I use for a minute to solve my problem and then don't touch again in a long time and instead encourages addictiveness.
    - BlueTemplar 3y ago
      There is no addictiveness here, because the person whose behavior is measured and the one being rewarded for it are two different people. EDIT : I think what you missed is how this is an issue mostly with advertising-funded websites, especially platforms. More views = more money for the website. (It even goes for Hacker News, somewhat !) But for Flattr 2.0, more/longer browsing doesn't (directly) equal more money (even for the creators, in aggregate) ! Even Patreon has an issue like this - GP is talking about the bundling issue, but Patreon still has an artificial moat that exacerbates this : not only it's annoying to reduce the funding for many other creators at once when you add a new one, you can't even reduce your funding for a specific artist to less than $1/month - regardless of how much you might be paying per month to Patreon in total ! Or are you against free markets ?? They tend to promote what people want and manufacturing wants too, you know ? Flattr 2.0 of course still has some issues : why a very short music video should be rewarded much less than a long form blog post ? (OtoH the music video is much more likely to be much more popular across a wider variety of people, so I guess that issue is self-fixing ? EDIT: not so much for a poem ?)
cbzbc 3y ago
The real answer is that the original core proposition of Patreon was a fairly [b]boring[/b] business. It's a payment processor alongside a smaller hosting business. For most consumers of their platform it's not something they need or intend to interact with that often. Unfortunately Patreon saw itself as primarily a tech-company able drive interactions via its own platform and capture more value from creators[]. The pandemic - and the ensuing explosion in the number of creators and consumers - fed this illusion further. Both factors led to an influx of VC money, and now they are stuck trying to make returns against a mostly fictitious valuation. [] This should have always been a warning sign, the average creator isn't rich, they aren't making bank on things like t-shirts.
- jlokier 3y ago
  Just a little HN editing tip: if you put a backslash before the star like this: '[\*]', it won't disappear and turn the following paragraphs to italics.[*] [*] Footnote.
  - cbzbc 3y ago
    Cheers for that.

by x0x0 3y ago

deleted 3y ago

[deleted]

raincole 3y ago

The author starts the article with "take Patreon's lunch money". What lunch? The one VCs fed them? Is Patreon even profitable?

Applejinx 3y ago
See, this is what immediately turned me off the article. I don't WANT a payment system that is about beating up other payment systems in the schoolyard and making them cry. I want a payment system that takes money on my behalf and then pays me with it. I'll put up with a lot of inefficiency if it's boring and predictable. You're gonna have a heck of a time prying me away from Patreon in favor of your new lunch-money taking payment system with crypto and hookers. If you're leading with 'take their lunch money', I don't trust you. I don't trust Jack Conte THAT much, but it's sure a lot more than you.
- chiefalchemist 3y ago
  To your point, it's foolish to pick a fight with a grizzly bear (i.e., Patroen). It's smarter to ask: where is there a market not being fulfilled? Then if that goes well enough eventually *maybe* you look to square off with the grizz. But to run into the sprawling plenty of room forest intentionally looking for a gizzly? That's foolish.
dangus 3y ago
Exactly. The author also dumped on Patreon’s incredibly low processing fee. Who is going to compete with 5% plus payment processing? And they dumped how this processing fee is unsustainable and that the community was mad about changing it. What business is going to disrupt margins like that? That’s like saying “I’m going to sell stuff cheaper than Costco.” Good luck with that!
- baobabKoodaa 3y ago
  FYI Patreon does not offer the 5% deal to new creators anymore. Now it's 8%.
  - dangus 3y ago
    Right, and that is still low.
    - baobabKoodaa 3y ago
      Sure.
- carlossouza 3y ago
  Exactly. Race to the bottom
bakugo 3y ago
Why wouldn't it be profitable? All they really do is take money from people, give them to other people, and take a cut of it. I was under the impression that Patreon is struggling because their profits aren't enough to balance out the 9 digits of VC money they greedily took in, not because there's no profits.
- foobiekr 3y ago
  A lot of tech companies are unprofitable due to headcount.

hknmtt 3y ago

"cracking" microtransactions is trivially simple

braza 3y ago

> nobody has cracked microtransactions It's hard to agree on this one. Personal anecdote: In 2010's I worked in a micropayments broker linked with all telecom companies. The whole thing was: that NSFW creators used a shared SMS shared code (i.e. a SMS number that receives messages for several creators and the code (for instance HNCODE25) was used to move money to a balance account) and for each of the payments that people used to do with them the telecom company got 15% slice, and the rest the telecom moved the money to the broker. Another point: In Brazil due to the PIX [1] almost all of those payment platforms (Paypal included) are becoming irrelevant because you can generate random tokens that can be hard to trace, and all the payments occur instantaneously giving enough time for withdrawn before any attempt of censorship and or any policy change. [2] [1] - https://en.wikipedia.org/wiki/Pix_(payment_system) https://en.wikipedia.org/wiki/Pix_(payment_system) [2] - https://news.ycombinator.com/item?id=19867120 https://news.ycombinator.com/item?id=19867120 ... About the article itself, it's surprising to me (and I assume some sort of intentional ignorance here) that even in the current state of technology we do not have a "dumb pipe" payment system as before and we're still relying upon those middle man actors or not-so ergonomic alternatives as P2P crypto.

viraptor 3y ago
People like the service that the middle man provides. They may not like the middle man, the fees, etc. but tell someone that "your transactions are not reversible, if you lost your money that sucks I guess, even if we messed up" and they will be happy to pay that transaction fee with another provider instead. Even with the small amounts, you either have to approve each transaction (which leads to another category of scams), or trust someone with access to your account. If you care about spending just $2/mth and not more... that may not be a risk you wanna take.
- KronisLV 3y ago
  > People like the service that the middle man provides. They may not like the middle man, the fees, etc. but tell someone that "your transactions are not reversible, if you lost your money that sucks I guess, even if we messed up" and they will be happy to pay that transaction fee with another provider instead. This might not be entirely realistic, but the idea of passing that choice on to the end user seems interesting: Payment of 12.99 EUR (VAT of X% included) to $vendor for $service, choose one: [ ] - regular payment, 0.50 EUR fixed fee [ ] - safe™ payment*, 2.00 EUR fixed fee * safe™ payments can later be disputed and reversed, if necessary Or something like that. I mean, regulation aside (this is a thought experiment), I can already choose whether I want to pay extra for tracking for international deliveries and when buying goods, sometimes extended warranty/insurance is offered as an option. Why wouldn't I get the choice whether I want my payments to carry less overhead OR have the protections you'd expect with the "middle man", as a choice within the same payment platform?

Marazan 3y ago

Patreon took venture money despite being bootstrapped. That is behind everyone of their dumb decisions. They had a great model harvesting nickels and then they sold a vision of Taylor Swift being on Patreon to VCs.

shakesbeard 3y ago

I loved Flattr ~10 years ago. You said "I have $40/month" and then these funds were allocated based on which things you flattr'd during the month (there were little buttons on the websites/blogs). Of course you could also say "include this content creator every month". It was so simple and elegant. As a consumer I had cost control, too. Plus there were no micro-transactions, only one charge to me.

BlueTemplar 3y ago
Did you miss Flattr 2.0 - a browser extension looking at your engagement ? https://news.ycombinator.com/item?id=15557954 https://news.ycombinator.com/item?id=15557954
- kzrdude 3y ago
  I used the original flattr and apparently missed the reboot too. Flattr 1 was dead for too long to carry me over anyway.
  - BlueTemplar 3y ago
    There's a 3rd-ish version that stopped promoting the extension and is closer to Patreon but with a set overall rate.
- karl42 3y ago
  I do not want to support anything that optimizes for "engagement". It penalized all the really useful offerings that I use for a minute to solve my problem and then don't touch again in a long time and instead encourages addictiveness.
  - BlueTemplar 3y ago
    There is no addictiveness here, because the person whose behavior is measured and the one being rewarded for it are two different people. EDIT : I think what you missed is how this is an issue mostly with advertising-funded websites, especially platforms. More views = more money for the website. (It even goes for Hacker News, somewhat !) But for Flattr 2.0, more/longer browsing doesn't (directly) equal more money (even for the creators, in aggregate) ! Even Patreon has an issue like this - GP is talking about the bundling issue, but Patreon still has an artificial moat that exacerbates this : not only it's annoying to reduce the funding for many other creators at once when you add a new one, you can't even reduce your funding for a specific artist to less than $1/month - regardless of how much you might be paying per month to Patreon in total ! Or are you against free markets ?? They tend to promote what people want and manufacturing wants too, you know ? Flattr 2.0 of course still has some issues : why a very short music video should be rewarded much less than a long form blog post ? (OtoH the music video is much more likely to be much more popular across a wider variety of people, so I guess that issue is self-fixing ? EDIT: not so much for a poem ?)

cbzbc 3y ago

The real answer is that the original core proposition of Patreon was a fairly [b]boring[/b] business. It's a payment processor alongside a smaller hosting business. For most consumers of their platform it's not something they need or intend to interact with that often. Unfortunately Patreon saw itself as primarily a tech-company able drive interactions via its own platform and capture more value from creators[]. The pandemic - and the ensuing explosion in the number of creators and consumers - fed this illusion further. Both factors led to an influx of VC money, and now they are stuck trying to make returns against a mostly fictitious valuation. [] This should have always been a warning sign, the average creator isn't rich, they aren't making bank on things like t-shirts.

jlokier 3y ago
Just a little HN editing tip: if you put a backslash before the star like this: '[\*]', it won't disappear and turn the following paragraphs to italics.[*] [*] Footnote.
- cbzbc 3y ago
  Cheers for that.