Does Patreon Point the Way to a New Crowdfunding Economy?

This post was selected for inclusion in our Future of Art and Work series in December 2016. The series, sponsored by Microsoft Surface, selects some of our best posts exploring the topics of how art and work will look in the 21st century. This post was originally published in March, 2016. 

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During a recent stream-of-consciousness tweetstorm, Kanye West lamented just how much of his personal fortune he’d been forced to invest in his own creative endeavors. “Yes I am personally rich and I can buy furs and houses for my family,” he tweeted. “But I need access to more money in order to bring more beautiful ideas to the world.”

The age of the Medicis has long faded into history, but large-scale arts patronage still exists, with rich collectors, executives, and gallerists supporting the chosen few. And as Kanye is realizing, there are some doors that even being one of the biggest stars in the world won’t open. The Zuckerbergs and the Brins of the tech world might be silent, but the irony is that what Kanye West wants already exists. It’s called Patreon, a subscription-based crowdfunding platform that collects periodic pledges from patrons, who support the work of their favorite creators. And its founder, Jack Conte, wants to tell Kanye all about it.

What is Patreon?

Patreon was founded in May 2013 by Conte and his old roommate at Stanford, developer Sam Yam. Conte, who is in a band called Pomplamoose with his wife Nataly Dawn, has a track record of YouTube success — Pomplamoose has dozens of videos with more than a million views, and Conte himself had a viral hit with a Daft Punk/Skrillex remix. But YouTube is notoriously poor at monetizing popular videos and creators, and despite Pomplamoose’s digital popularity, Conte found it difficult to even break even on tour.

In a much-derided post on Medium describing the economics of a Pomplamoose tour, Conte stressed that “Being in an indie band is running a never-ending, rewarding, scary, low-margin small business.” Few would argue with that sentiment, though there is a case to be made that even with an eight-person band, it’s possible to do a month-long tour for considerably less than $147,802. But Conte buried the lede: even though the tour wasn’t profitable, he and his wife were each drawing a $2,500 monthly salary from their Patreon campaign. If, as he suggests, the space between starving artist and rich and famous was disappearing, then Patreon could fill the vacuum. “We are the mom and pop corner store version of ‘the dream,’ he wrote.

Conte’s dream is well-funded; after an initial angel investment of $2.1m in August of 2013, Patreon raised $15m in Series A in June 2014, and $30m in a Series B round at the beginning of 2016. After years of supporting himself with his music, he finally began to draw a salary as CEO.

Why is Patreon different?

Patreon works like most crowdfunding platforms: rather than have one large Patron pledging a large sum of money, creators collect micropayments from a group of supporters in order to fund their creative endeavors. To generate income, Patreon takes 5% off the top. Patreon pages include videos, messages from creators, updates on the work, and often, exclusive content for Patrons. The main difference between Patreon and crowdfunding platforms such as Kickstarter and IndieGoGo is the subscription model. Rather than pledge a one-time amount, Patrons pledge regular amount, whether it’s per creation, month, week, or self-defined term.

Amanda Palmer, she of the controversial $1m Kickstarter, likes to use the relationship analogy when comparing Patreon; if backing a Kickstarter campaign is like going on a date, then pledging to a Patreon campaign is a committed relationship. Both are built on trust, or confidence that the creator is really going to deliver on the promises that brought their backers to support them. With Patreon, that trust runs a little deeper, because the commitment is indefinite. For a Patreon campaign like Palmer‘s, her backers are charged every time she makes a “thing”; with around $35k pledged for each “thing,” each time she clicks “charge” moves a lot of money. That’s a lot of power — and a lot of responsibility.

Palmer’s latest “thing,” a song called “Machete,” features Ben Folds on drums, Jherek Bischoff on bass, and Ryan Lerman on guitar. Her EP of David Bowie string-covers was expensive (she had to pay publishing royalties), but the solo ukelele video “things” cost far less than $35,000 to produce. If she wants to spend $15,000 to make a “thing,” however, she’s got to front that cash, so the cheap ukelele “thing” can end up paying for the next “thing.” Regardless of what you think about Palmer’s music or accounting, it’s all out in the open — there’s no bait-and-switch. And her fans are so hardcore that all they’re concerned about is supporting her efforts to do whatever the fuck she wants.

“All of these people are trusting your ethical ability to not overcharge them and not swindle them,” Palmer says. “In effect, this is true patronage.”

Who uses Patreon?

The most obvious candidates for a Patreon campaign are vloggers and YouTube video creators. YouTube — like much of the Internet — is a fantastic platform for building an audience, but a terrible one for monetizing it. “The global mechanism for financing arts in 2013 [the year Patreon was founded], is totally dysfunctional,” Conte told us in a phone interview. “We’ve done a great job over the last decade of democratizing distribution. It’s free, and it’s easy to distribute your work. you don’t need to get the thumbs up from somebody in a suit to reach people anymore….But the other component of that is the financing of those works. I don’t want to say we’ve failed, but we have not figured that out yet.”

One of the best examples of this is John and Hank Green, a.k.a. “The Vlogbrothers.” (Yes, The Fault In Our Stars guy.) They make educational videos on YouTube through channels like How To Adult, SciShow, and CrashCourse.  They’ve got millions of subscribers across multiple channels, but it wasn’t until they made their own platform that the endeavor became truly sustainable. Around the same time Conte was launching Patreon, the brothers launched Subbable, their own subscription-based crowdfunding platform. While Patreon was originally designed to pay “per creation,” Subbable brought the idea of a monthly subscription, and both co-existed for a while, until a change in the Amazon Payments system that Subbable used necessitated they get their entire user base to sign up all over again. Rather than absorb the expected attrition of such an endeavor, they chose to team up with Conte, whose platform had evolved to be quite similar to Subbables by that point. You can read more about it here.

But Patreon is for more than just YouTubers. The diversity among successful Patreon campaigns is impressive; in addition to the Vlogbrothers, there’s big names like Neil deGrasse Tyson’s StarTalk Radio, and the ongoing performance art project that is Amanda Palmer‘s life and career. There’s wildly successful webcomics like Zach Weinersmith’s Saturday Morning Breakfast Cereal and Jeph Jaques’ Questionable Content. An artist who goes by the name Sakimi Chan makes more than $25,000 each time she releases a new batch of sexy fan art. Patreon doesn’t only support art, however: There’s support for the grunt work of activism and advocacy, like Randi Harper and her campaign to fight online harassment, doing research and developing tools like the Good Game Auto Blocker, or Tara Burns campaign to fund research on sex work and sex trafficking. The subject of this WIRED feature, Cara Ellison supported years of globetrotting longform videogames journalism; Tim Urban and Andrew Finn have almost 4,000 people paying more than $12,000 a month to fund their blog Wait But Why.

What are Patreon’s problems?

It isn’t all Mai Tais and Yahtzee, however; in its short history, Patreon has experienced its share of growing pains. Like much of the Internet, it’s often become a battleground for GamerGate, and the transparent nature of patronage has provided fuel for misogynist conspiracy theorists. A quick search of “Patreon” on Reddit shows plenty of mouthbreathers railing against “Social Justice Warriors,” and trying to get their campaigns shut down. A recent data breach exposed creators’ personal information and private messages. The hacker’s motives were unclear; what GamerGaters did with the data was not. And then there’s the exploiters, or phantom patrons who pledge, collect their rewards, then pull out just before they’re charged at the end of the month.

For his part, Conte has taken direct action in arming creators against harassers, giving them carte blanche to block any Patron at any time for any reason. “It’s a really important sort of cultural signal,” Conte says, “to start the iterative and long process of building thoughtful community management tools.” The site’s community guidelines that govern how it responds to user behavior lean heavily towards promoting safety, though it’s anti-pornography stance leaves room for subjective ambiguity of what is or is not offensive. And since there’s no active policing, action is only taken when reported. But once private info leaves the site, there’s not much they can do to protect their users. Data breaches happen to everyone — even the biggest companies are not immune. But once it does, the only thing the site can do to protect doxxed Patrons and creators is to do their best to prevent it from happening again.

Should I start a Patreon?

Patreon is not for everyone. At least for now, it’s not designed to grow an audience from scratch; to sustain a prolonged Patreon campaign, you need to already have an audience. The fastest way to build a fervent fanbase? Give your work away for free. This can be a tough pill to swallow, not unlike it was for musicians facing the impending avalanche of free digital music. “It’s never a smart move for brand-new unknown artists to try to crowdfund from scratch with nothing to work from,” Palmer says. “You have to have a crowd from which to fund before you can crowdfund.” Again, trust is key; the trust that Patrons place in creators goes both ways. When Patreon creators give their work away for free, they’re putting trust in their fans to mobilize and support them financially, so they can continue to create more.

While Patreon still allows creators to create Patron-only perks, it often acts as a digital tip jar, with Patrons pledging money to support their favorite creators in creating whatever it is they already create. For webcomics like Weinersmith, who make money from display advertising and merchandise sales, Patreon serves as a nice supplement to a multi-faceted business. “It’s a great platform, and it’s especially good for introducing some stability into a hard business,” Weinersmith told us via email. “For [webcomics] in particular, it’s only one part of the business. I would say it is just another way to monetize, but it’s a particularly good way, because it’s reliable and doesn’t require you to maintain inventory or deliver goods.”

Weinersmith already had a fervent fanbase by the time he started his Patreon, so getting them to migrate to the Patreon platform didn’t require much convincing. But don’t confuse a few thousand Twitter followers for a fanbase; delusions of influence get quickly deflated on Patreon. In a first-person essay on The Kernel, freelance writer Noah Berlatsky found it difficult to muster sustainable support for his art criticism column. He was perplexed by the modest success of campaigns like Phil Sandifer’s Eruditorium Press, a highly esoteric blog whose writer has “less than a third of the Twitter followers” that Berlatsky has. But as he soon learned, of those thousands of twitter followers, very few found the idea of “essays about comics and feminism and rape/revenge films” to be “exciting” enough to pay him any money.

Patreon excels at supporting ongoing creative endeavors that wouldn’t otherwise be made, or expertly fill an underserved niche. It’s a market corrective for gatekeepers that marginalize the voice of the minority. You might need an audience of thousands to justify a salary at a mainstream media outlet — on Patreon, a mere hundred will do. But they really need to love what you do, and be willing to back it up with their wallets

Democratized crowdfunding platforms like Patreon, Kickstarter and the like are clearly here to stay. Not everyone is cut out for independence, but the social contract between creator and patron seems self-policing; if patrons don’t trust in their creators, they can easily halt their support, or voice their concerns. It might be about as close to a meritocracy as we have in our society; regardless of what the cognoscenti have to say, if a creator has the support of their fans, they can have a career. In reporting this story, we found that the most successful creators typically spend more time focusing on making great stuff, rather than hustling clicks, views, or dollars. And isn’t that the dream?