Internet strangers and supporters pay $1,080 a month to Stuart Schuffman, better known as his online persona Broke-Ass Stuart, to write things like “8 Ways to Get High for Hannukah.”
Yet, somehow, he’s not thrilled with it.
“The system we’ve set up is broken,” Schuffman said.
Schuffman is one of thousands of other creative people that use Patreon, a donation platform that has surged in popularity in recent years. Think Kickstarter but with a focus on the people behind the projects and tailored to providing a sustained monthly income rather than a one-off influx of cash.
The once-niche artist-focused platform was thrust into the spotlight recently when it and changed its fee structure. Then all hell broke loose.
I have lost about 30 patrons today, @Patreon. That’s not insignificant. I need you to fix this.
— jon “bitch ass hipster” rosenberg 🎄😘 (@jonrosenberg) December 8, 2017
On Wednesday morning, less than a week before the fee structure was set to roll out, Patreon CEO Jack Conte posted a blog entry that bluntly took everything back.
“We messed up. We’re sorry, and we’re not rolling out the fees change,” he wrote.
The sudden reversal highlights the challenge that Patreon faces as it figures out how to juggle success, investors, and the community that made it a destination for creative people. The question remains whether it can figure it out without destroying itself.
The internet is great at a lot of things, but providing people who create things with value for their work has never been one of them. Plenty of websites have come and gone over the years in an attempt to get people to pony up the dough for creators. Sites like Medium, Etsy, Soundcloud, even Reddit, promote creativity and original work, but have struggled to find a model to get creators paid. Patreon, at one time, looked like the one that might have figured things out.
Then, Patreon did what a lot of burgeoning platforms do — it raised a ton of money from venture capitalists. Along with the funding came an announcement on how the company planned to take out fees on donations. The change shifted fees to patrons, leading to a near-immediate outpouring of anger from creators who began to see contributors flee — and speculation that the new investors were changing things to begin taking their pound of flesh.
Any indication you see from Patreon that this was done with the best interests of the creators or the users in mind is a lie. This is a purely revenue-based decision driven by the venture capitalists who now own a huge chunk (probably the majority) of the company. 5/10
— Chris Buecheler (@cwbuecheler) December 7, 2017
That ire, however, started to abate and in its place emerged something even rarer than a healthy artist platform: reasoned internet discussion.
Patreon began, as many of other creator-focused platforms have, with the best intentions.
Back in May, Mashable interviewed Patreon cofounder and CEO Conte who made clear that, “the web is really terrible at turning value into dollars.”
He sees the Patreon concept and community as a tool to unlock money from art. “What you add to people’s lives and the joy that you bring to people. None of that manifests in dollars. The web is not there yet. All these new technologies… there’s a lot of untapped value,” he said.
The details of the fee structure are crucial.
This isn’t a terribly new idea. The main question has been how to unlock that value and whether there’s any money to be made in doing so.
As such, the details of the fee structure are crucial.
The change that riled up the crowdfunding platform seemed straightforward: Patreon would start charging patrons an additional 2.9 percent and $0.35 for each individual pledge starting Dec. 18. Creators would take home 95 percent of pledges after a 5 percent chunk went back to the platform.
Before this, fees had come entirely out of the amount patrons had donated. Donate $1 and the creator gets about $0.94 with Patreon taking a cut and some money going to processing and fees.
Under the new structure, a $1 pledge would really be $1.38 and each and every pledge would be charged the additional fee. Someone who gave $1 to 10 different projects would be paying $13.79 instead of $10. Someone who just gave a single $10 donation would be charged $10.64.
That small change led to an uproar from Patreon’s creator community.
This math is crucial to the success of Patreon. The new system was supposed to allow creators to have a consistent expectation of how much money they’d receive each month. Previously, processing fees varied every month based on donations and some creators were losing 7 to 15 percent of pledges. In a FAQ about the new fee, Patreon said the new math “is core to our mission of getting creators paid.”
Patreon appeared adamant about sticking with the changes despite initial outrage. They said the proposed change had come from a year of research and user feedback.
“While some patrons may leave in the short-term, we know this will help creators earn more money in the long term,” the company wrote in a blog post.
Ctrl + Z
The sudden reversal on Wednesday changed all that. Some of Patreon’s most ardent creators applauded the last-minute reversal. It felt like the company was actually listening.
dear patreon, thank you, thank you, thank you for listening to us. i’m really happy and i know many creators and patrons – at all levels – will be, too. it’s a fine week for democracy. onwards together. xxx https://t.co/ookYz9ygKc
— Amanda Palmer (@amandapalmer) December 13, 2017
The problem, however, is that without those changes, Patreon still faces certain problems that the company had hoped could be fixed under the new policy.
There’s a sense that Patreon’s fee shift may have been to ensure its future as a platform for creatives. Writer and programmer pointed out that the fee structure is a move to keep Patreon from becoming a money services business and, more importantly, being regulated as one.
“You could argue that Patreon’s true mistake was in subsidizing the true cost of micro-payments with a business model they couldn’t (or were unwilling) to sustain in the long-term. People flocked to Patreon because no one else was offering this model and it turns out there’s a reason for that,” part of the post reads.
Patreon’s new fee model isn’t all that unusual for payment/donation processing platforms (though most do not make it compulsory for supporter to pay the payment processing fees). I am very curious as to how the numbers work out for Patreon and what went into this decision.
— Christie Koehler (@christi3k) December 7, 2017
Patreon’s decision to listen to users’ complaints doesn’t mean everything will carry on like it did before. It’s now out in the open that the platform is looking at how to reconfigure its fee and payment systems. In an email Wednesday morning a Patreon spokesperson said: “There are still a lot of things that need to be fixed because the current payments system is basically the same one that we’ve used since Patreon launched 4.5 years ago. But we’re going to make those fixes by working very closely with creators.”
In Conte’s post he vaguely mentioned a change coming down the pike, “We still have to fix the problems that those changes addressed, but we’re going to fix them in a different way, and we’re going to work with you to come up with the specifics, as we should have done the first time around.”
New payment system or old, Schuffman aka Broke-Ass Stuart thinks the situation shines a light on a bigger issue, one that remains on the internet to this day.
“We need to put more value in the creations people make.”