
Facebook wants up to 30% of fan subscriptions vs Patreon’s 5% - doppp
https://techcrunch.com/2019/02/26/facebook-vs-patreon/
======
jelv
Liberapay takes 0% [https://liberapay.com/](https://liberapay.com/) It's
European non-profit and open source. It's funded by the donation on it's own
platform.

~~~
NicoJuicy
[https://news.ycombinator.com/item?id=19270786](https://news.ycombinator.com/item?id=19270786)
European non-profit is not the same as American non-profit.

So i made a new item for liberapay, since I thought it was worth it.

Also, I would much rather see Liberapay on the frontpage of HN than Facebook
"fan subscriptions"...

We have enough multinationals that try to claim 30% on top of someone else's
work.

~~~
NicoJuicy
Fyi. HN has flagged it ( lower ranking ) and removed European and 0 commission
from the title without moderation comment ? ... :(

~~~
mfoy_
Generally speaking submissions should just match the <title> of the page... so
if you want, write a blog post about it, then submit the blog post?

------
SatvikBeri
Patreon is selling a service, Facebook is selling access to an audience. Two
seemingly similar but vastly different offerings. That's why Facebook can have
a lot of crappier versions of other products that are still successful (e.g.
Facebook events vs. Meetup.)

I doubt they'll be able to get away with the terms as is, but it wouldn't
surprise me if they manage to successfully charge significantly more than
Patreon and still get a lot of customers.

~~~
jraby3
Absolutely correct and the best comment here imo. It’s very different to
provide an audience vs. providing a service.

~~~
mamborambo
But once past initial audience discovery, the recurrent billing of patronage
donations is just pure service.

So logically creators should only use FB for access to new audience, build a
relationship with the newly acquired audience, and pivot to direct billing or
Patreon for recurrent collection.

~~~
pavlov
By the same logic, YouTube creators should only use YT to build an audience,
then switch to hosting their own videos. Yet they want to remain on the
platform.

~~~
stale2002
Video hosting costs a lot of money.

Sending an API request, to the credit card company, to bill the monthly
payment, does not cost a lot of money.

Getting your audience to switch platforms for the monthly payments is a
compartively easy thing to do, compared to setting up your own video hosting
site.

~~~
pavlov
More to the point, neither is very easy to do in practice.

------
Deimorz
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-
patre...](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)

~~~
pravda
Yes, 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
Steam 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
> _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
> 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.

------
DanielBMarkham
I remember when reasonably smart cellphones first came out. You could hook
them up over USB and change things like ringtones or backgrounds. It was fun.

Then manufacturers and cell phone companies started realizing the money train
they were on. They made billions by selling this same crap to people who
didn't know how or have the time to customize their own phone.

As it turns out, billions of dollars tends to get people's attention. Now
those same companies are locking down PC boots, taking out headphone jacks,
and all sorts of other things to "help" us have better computers. Each of them
will involve trying to keep those cash cows lying around, maybe grow the herd
a bit.

My point is this: smart people caught on to this bullshit. Facebook, Patreon,
and the other fan/audience aggregation systems are doing the same thing, just
with a different platform. I'm not sure, but I think the folks are catching on
faster this time around. We're going to end up with an internet where the tech
elite use services that actually facilitate their lives while the rest of the
world use various subscription and "helper" services that try to extract as
much money as possible from them at every turn.

~~~
0xcde4c3db
> As it turns out, billions of dollars tends to get people's attention.

As Sir Tony Hoare lamented:

> At first I hoped that such a technically unsound project would collapse but
> I soon realized it was doomed to success. Almost anything in software can be
> implmented, sold, and even used given enough determination. There is nothing
> a mere scientist can say that will stand against the flood of a hundred
> million dollars.

I get the feeling that a lot of modern products are boondoggles on the merits
but "doomed to success" because FAANG et. al. put them on a pedestal and the
media is all too happy to go along with corporate marketing narratives if it
grabs eyeballs (see e.g. the ridiculous amount of hype around foldable phones,
which are sort of neat but hardly a revolutionary advance).

~~~
HeadsUpHigh
>(see e.g. the ridiculous amount of hype around foldable phones, which are
sort of neat but hardly a revolutionary advance).

Yea what's going on with that nonsense? I can't wait until consumer
electronics turn into appliances and all this tech messianism finally dies
off. It's not like the newer stuff really is better anymore. People are just
looking for their next hit in tech products.

------
gnicholas
How is this a "Patreon killer" at all? In addition to the extra 25% cut, they
will also apparently demand IP rights that would continue even after you stop
using their service.

Are they thinking that people will sign up for this because it gives them
instant access to lots of people on FB, and that justifies the higher
percentage? I'm guessing that creators will end up having to pay to get
exposure, just like brands, which nullifies this potential benefit.

~~~
vntok
> 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.

"Perpetual and irrevocable" means that it continues even after you stop using
their service.

~~~
black_puppydog
With the difference that much of what "happens" on patreon is not actually
hosted there, and thus doesn't fall under that clause if I understand this
correctly.

~~~
rchaud
Yeah but I would imagine Patreon is working towards introducing their own
video hosting platform at some point and build out their moat. Otherwise
they're a glorified Paypal button.

------
agigao
I miss those times when enthusiasm used to drive the net. Seeking profit in
every corner of one’s life is demoralizing to say at least.

~~~
michaelmrose
Most regular people call this behavior... survival. Anything else is an
extreme luxury reserved for a minuscule fraction of the human race.

~~~
erikpukinskis
No, not really. And do the extent people do live that way, it’s a new
phenomenon.

A hundred years ago most people had vast swaths of their productive life that
operated outside of the economy. Housewives cooking meals, people fixing their
own cars. Dances in barns. Etc.

Many “regular” people still live that way, which is where your statement is
false.

Over the last 100 years there has been a concerted effort by business owners
to displace all of that activity and replace it with productized equivalents
in the economy:

You don’t cook, you buy frozen dinners. You pay to have your complicated car
fixed. You don’t walk your friends dog, you get paid to do dog walking gigs.
You gramma doesn’t cook you soup, you get it delivered. People don’t meet up
in a barn, you go to a club and pay a cover.

This is new. And I’m not even saying it’s fundamentally bad for us. But for
some of us it is disorienting.

~~~
michaelmrose
Because the non discretionary parts of your life like rent/mortgage and
medical is so expensive people don't have time after investing 50-60 hours to
walk the friends dog.

Note that someone who only works 40 hours but has to commute 1.5 hours to and
from work because they can't live in the city where the jobs are and spends 2
hours taking text emails while not actually at work has committed 65.5 hours
of their time.

half hour getting ready for work, 1.5 hours driving there, 4 hours on lunch
for an hour, 4 hours on, 1.5 hours getting home.

People working multiple part time jobs are worse off. They may be "working" 60
hours and committing 80.

~~~
agigao
Guys, perhaps, we should to give such examples a context.

I lived/studied in Boston, MA number of years, and I used to meet up with my
childhood friend who immigrated from Georgia roughly 8 years ago at his late
teen years. He graduated from a very prestigious business school, and has a
decent job but after the day was over he used to do some extra stuff, like
driving someone from place to place, some screw driving job (I don't exactly
know). It seemed crazy to me, I asked numerous times what are you doing dude?
His response was extra $ is not a bad thing.

It might sound a bit bold and too generalized, no offense, I'm up for
conversation - _in the US people forgot what it means to rest properly._

Roughly a year ago, I was visiting my good friend in Germany, who immigrated
15 years ago. He was encouraged by another friend who lived in California to
move to the US. We sat down and make a list of comparisons. Just to name a
few:

Germany: 1\. Workers Union protects employees. Pays a salary (70%+ of it) for
6 months if one looses a job. Also, a simple cold is good enough reason to
take a week long leave and you're encouraged to do so. \- US? no bro, you're
on your own. It's a god damn pressure that makes people work unworkable hours
and being in the endless state of anxiety.

2\. Car insurance - he drives a new BMW and pays ~ 350 USD per year. We quoted
the minimal package for insurance in MA for the same car, guess the number?
10fold: 3000 USD per year.

3\. Education? - Free. US: 70$K per year.

4\. Cost of food. Well, Germany is "notorious" even in EU for grocery
affordability.

5\. And Beer? German Hefeweizen 60 cents. Samuel Adams? no thank you. (half
joking)

I did eventually left the US, although data science/engineering is the dream
job generate money, but quality of life is no less important than the number
of 0s at the end of bank acc. balance.

------
oliwarner
Steam takes 30%. Apple, Google Play take 30%. Physical stores can eat 60%
unless you're selling something that's _demonstrably_ saleable. Those sorts of
markups aren't at all weird for access to a market...

And that's what it is, as SatvikBeri has already said. People typically don't
go to Patreon to find new content. They consume the content elsewhere
(YouTube, Facebook, etc) and then go to Patreon. Facebook et al are packaging
together a huge userbase as well as a very targeted marketing service amounts.

In the big scheme of things —because I'm sure some people do browse— Patreon
is just the money processor.

Edit: Should also point out that YouTube has a similar system. Users can pay
100K-sub channels a fixed £4.99/month and Google keeps 30%. It's all about the
point of contact. YouTube, Facebook, established app markets, etc all have
near-monopoly access to people. That's why they can demand the big bucks.

~~~
pluma
It's a bit more complicated, which is why many content producers still use
Patreon even if they want an alternative.

Patreon not only collects money, it also provides a way to assign rewards,
define goals and notify patrons (filtered by reward level) of new content.

It's not a publishing platform, but it's not just a payment processor, it's
also a kind of marketing platform.

That said, the most appalling part of Facebook's "competitor" is not the 30%
rate, it's that their ToS try to pull the same bullshit stunt they try to pull
on their social platform: tricking you into believing you owe them perpetual
transferable rights to everything you share via their platform. They know this
isn't actually enforceable (at least not in all jurisdictions internationally)
but they still try to trick people into believing they unknowingly agreed to
it and are comfortable exploiting those in jurisdictions where this nonsense
works and those who don't know any better.

------
RileyJames
> But whatever cut it takes will be after processing fees and the 15 to 30
> percent tax Apple and Google levy on iOS and Android in-app purchases. We’ll
> see if Facebook tries a workaround that pushes users to their mobile browser
> where it can take their subscription money tax-free.

That makes it kinda ridiculous.

$5 subscription.

30% to Apple: $1.5

30% to Facebook: $1.05 (of the remaining $3.50)

Leaving the creator with: $2.45

I assume it will be out of control of the content creator regarding how the
subscriber chooses to pay/subscribe, so the margins could be all over the
place.

~~~
thucydidesofusa
Heh, now assume the creator makes $80k/yr and lives in California.

Marginal tax rate - ~38%?

$5 subscription.

30% to Apple: $1.5

30% to Facebook: $1.05 (of the remaining $3.50)

38% to the Government: $.93 (of the remaining $2.45)

Leaving the creator with: $1.52

~~~
randunel
> 38% to the Government: $.93 (of the remaining $2.45)

If the invoice you give your customer says "$5.00", isn't the tax taken from
that? That's how things work in Europe, the gross income is taxed.

~~~
gamblor956
No, because the shares of the transaction that go to Apple and Facebook were
never your income to begin with.

Alternatively, those costs are simply deductible from taxable business income,
for the same result, even on individual returns. (In the US business income is
taxed on a net basis.)

------
headsoup
So Facebook are essentially like an email spam operator here. They have
billions of targets (customers), so only have to find a small number of
suckers (customer sub-set) to make it profitable.

No doubt you'll need to sign up to Facebook to even view the content, so I'm
out then.

------
hokus
Its nice to see the multinationals agree 30% is a decent taxation level.

~~~
ebalit
Even 30% of the revenue, while most taxation is based on the profits only.

~~~
Asooka
They've learned their lesson - taxing profits means everyone will pull off
bullshit accounting tricks to make their profits as close to 0 as possible.

~~~
ardy42
The US government just needs to rebrand itself as an app store & platform, and
we'd be done with all this controversy around tax rates.

------
liability
This seems like the sort of thing that could only move forward at a company
like Facebook. If this were proposed as an independent business, it would be
laughed out of the room.

Of course Facebook has enough loyal users that they might actually be able to
make this work..

~~~
vntok
Why would it be laughed out of the room?

FYI, here's the current top comment in this very thread:

> 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.

~~~
AlexandrB
Because a new company would have nothing to offer for that 30% that Patreon
doesn't have. Facebook has an audience.

------
hereiskkb
To actually see content creators sign up for this would be a sign of the
times.

~~~
luckylion
Well, Facebook has somewhat transparent guidelines for banning, and will be
held accountable in public if they overstep. Patreon doesn't, your business
with them as a creator is as safe as it is with PayPal if you're putting out
controversial content.

~~~
ttsda
Transparent? Never heard of zucc?

------
davesque
Sometimes, I feel like the Facebook hate train is just too much and then stuff
like this comes along.

------
sofaofthedamned
Am I being paranoid that, by collecting CC numbers, Facebook will then use
that to share data with retailers to collect the precise purchase history of a
user?

~~~
tdeck
You mean like this product Facebook already has?
[https://www.facebook.com/business/help/1278167592274041](https://www.facebook.com/business/help/1278167592274041)

I'd say not that paranoid.

------
AlexandrB
This is great news! Hopefully it will keep Facebook's Fan Subscriptions from
becoming popular.

------
quadrangle
Geez, none of the comments here mention surveillance! That's the ONLY focus
Facebook really has.

The point of this is OBVIOUSLY not just profit, it's about figuring out how to
get more and more stuff to live in Facebook, be run by Facebook, and _tracked_
by Facebook.

Zuck and Sandberg can't tolerate the idea that people are donating to things
and they don't _know_ about it. They want to know who donates to what and all
the other details. And they'd like to eliminate the existence of any content
that's _outside_ of the Facebook ecosystem.

------
aaronbrethorst
I wonder if Facebook will be able to pay content creators on time. Might be
worth a significant drop in revenue to some folks who depend on services like
Patreon in order to pay rent if they're able to at least get their money when
they're supposed to get it.

[https://twitter.com/ericacbarnett/status/1100809443422302208](https://twitter.com/ericacbarnett/status/1100809443422302208)

------
buboard
You need to take into account that fan subscriptions are a miniscule
percentage of the overall user base. It's not like an app store where a
whopping 1/3 of users buy apps. Just because facebook has a larger userbase it
doesn't mean people are going to use it "out of convenience". If creators
don't see a financial advantage , they 'll redirect their sponsors to patreon
or another cheaper medium.

------
networkimprov
This could be a huge boost for Patreon.

A significant fraction of creators will seek alternatives when they hear about
the FB product, or after being burned by it.

~~~
luckylion
The problem isn't in on the creator side, it's getting users to go, sign up
and pledge. FB already has the users, it just needs to give them an option to
sign up.

Twitch streamers also use Patreon, but subscriptions and cheers on Twitch are
more successful from what I can tell - it's closer to the content. If somebody
is using FB as the primary way to release content, it's only natural to also
do the donations/subscriptions on FB.

~~~
networkimprov
I'd expect high-end buyers (who typically account for a large majority of the
total market) would follow the creators to Patreon if it's creator community
expands rapidly.

------
andrestc
"The policy document attained by TechCrunch shows Facebook plans to take up to
a 30 percent cut of subscription revenue minus fees, compared to 5 percent by
Patreon, 30 percent by YouTube, which covers fees and 50 percent by Twitch."

Looks on par with other providers.

------
kkarakk
Everyone arguing against this is forgetting that this is FACEBOOK, premier
social network on the planet. sure it's unhip to actually use it for
networking now but everyone and their mum is still maintaining a presence on
it(no the vaunted snapchat only teens don't count, they have secret facebook
accounts linked to none of their peers to participate with their selfsame
anonymized peers in meme pages on facebook)

all they'd have to do for this to be successful is to make reach for partnered
pages the same as it used to be before they limited it. there are pages with
1million followers who have a reach of 10-100k right now coz of the new
rules.imagine if facebook said "partner and you get 1 million back".

------
skilled
Damn, if Facebook actually had a face, it would be quite punchable I must
say...

~~~
avinium
Best description I've ever heard of the company.

------
mnort9
FB is charging a premium for accessing an economy of scale (audience).

As a content creator that charges $25/mth, would you rather: 1\. Patreon - 500
subs 25x500x.95=$12,500 rev 2\. FB - 5K subs 25x5000x.70=$87,500 rev

10x growth doesn't seem unrealistic given FB's scale and $$ motivation to grow
your audience

