
Patreon’s new service fee spurs concern that creators will lose patrons - slyall
https://techcrunch.com/2017/12/07/patreons-new-service-fee-spurs-concern-that-creators-will-lose-patrons/?hn=1
======
panic
It's worth remembering that less than three months ago, Patreon raised $60M in
a series C ([https://patreonhq.com/new-round-
funding-816d5a592477](https://patreonhq.com/new-round-funding-816d5a592477)):

 _I’ve got some exciting news! Patreon has just secured an additional round of
financing ($60M!), which means we will be scaling our team, building faster,
and building more — all in service of getting you paid what you deserve to be
paid, for the value you give the world. YESSS!_

So why is Patreon changing their fees now, when they just got a ton of money
and can basically do whatever they want in order to grow? Their Zendesk
article ([https://patreon.zendesk.com/hc/en-
us/articles/115005631963](https://patreon.zendesk.com/hc/en-
us/articles/115005631963)) isn't much help:

 _Q: Why is Patreon doing this now?

A: Patreon exists to allow creators to get paid what they deserve to be paid,
for the value they give the world. This is awesome and to continue this
vision, we need to constantly evaluate our processes. As we work to deliver
bigger and better features for creators and patrons in 2018, we felt like
sooner than later made sense to put this change into effect._

This doesn't actually answer the question: why do the fees need to be changed
at all, whether sooner _or_ later? Were creators asking for this change? What
was wrong with the way it worked before?

The obvious answer is that Patreon needs more money for some reason. But… they
just raised a bunch of money. So I really don't understand how this change
makes sense or helps anyone.

~~~
TazeTSchnitzel
Patreon is a startup which is a conduit for and yet a leech upon the incomes
of struggling people[0]. An service of its kind should not be a for-profit
operation, the incentives are perverse.

Kickstarter is a Public Benefit Corporation, so I'm slightly more enthusiastic
about the potential of their offering (Drip).

[0] [https://theoutline.com/post/2571/no-one-makes-a-living-on-
pa...](https://theoutline.com/post/2571/no-one-makes-a-living-on-patreon)

~~~
hbosch
Speaking of Kickstarter, do you think this change will push creators over to
Drip[0]? Is Drip a PBC as well?

0\. [https://d.rip/](https://d.rip/)

~~~
dangerlibrary
> Ⓒ2017 Drip U.S., LLC. By Kickstarter, PBC.

------
cdancette
I think the clearest explanation of the change is in this tweet:
[https://twitter.com/TPRJones/status/938646263800705024](https://twitter.com/TPRJones/status/938646263800705024)

"The extra cost isn't tiny if you pledge small amounts to many creators.
Pledging $100 to 1 creator will now cost $103.25 which is reasonable. Pledging
$1 each to 100 creators will now cost $138 which is not reasonable"

~~~
floatingatoll
$138 is unreasonable to me for one simple reason: When I pledge to 20
creators, Patreon batches my pledges based on arbitrary server-side criteria,
such that they cannot guarantee how _many_ charges will be made to cover my
pledges.

So typically I see two charges per month. They can't charge me $0.35 per
charge because the # of charges varies without any ability for the customer to
predict and cannot be defended reasonably to customers.

Instead of revamping their billing groupings to ensure that each patron is
charged once per month, they are charging $0.35 _per creator_ , which is the
absolute worst case scenario here.

So to me, the ripoff is that they charge me for two credit card transactions,
but instead of $0.35 per transaction, they charge $0.35 per _creator_ within a
single credit transaction - when that $0.35 is not charged to them by their
merchant processor for those individual creators.

I would have been fine if they'd simply tell me "X creators = Y transactions @
$0.35 each + 2.9% of amount", where Y is virtually always some tiny fraction
of X, but that they instead say "X creators = X transactions @ $0.35 each +
2.9% of amount" to avoid regrouping their billing is a misuse of the word
'transaction' as they implement it.

EDIT: If Patreon has been charging $0.35 per patreon to their creators, then
this is not _new_ profit for them, but is instead the _same_ profit now
collected from patreons instead of creators. It's still unacceptable to me,
because they're charging the worst-case scenario (one transaction, per
patreon, per creator) and then optimizing for less than that and not crediting
the excess (Y-X) x $0.35 back somehow. If their 5% take isn't enough to cover
transaction costs, hiding a profit in (Y-X) x $0.35 is not the correct way to
solve that.

EDIT: It's possible that Patreon was censured by Stripe somehow and is going
to stop batching charges period full stop come January, and so then Y=X for
all cases, at which point this all starts to make a lot more sense.

~~~
cdancette
Do you know why they batch the pledges into several payments and not just one
big payment?

~~~
huac
Money laundering rules

~~~
pavel_lishin
Can you go into some more depth?

~~~
PeterisP
Hadn't thought of this reason, but that _might_ make sense - in essence, the
standard AML rules have always required specifying the final beneficiary of a
payment if you pay money to someone who'll hand it over to them.

If Patreon is being treated as or claiming to be a payment service provider
(i.e. it passes money through to authors without owning it in between, the
only revenue on their balance sheet is the fee they take) then it'd be wrong
to state that Patreon is the beneficiary of a particular payment, since it's
not; and they'd be required to list all the _actual_ beneficiaries on every
payment, which can't really be done for reasons, so they need to charge many
small separate payments.

On the other hand, if Patreon is being treated as or claiming to be selling a
service (i.e. it takes all your money, and pays it out to authors as a
business expense) then that has major tax implications, namely, _all_ the
amount (as opposed to just their fees) is their revenue and thus subject to
various sales taxes and VAT worldwide. This seems to be the current option,
since they're charging VAT on the full amount for EU patrons.

It might be plausible that they're currently switching from option 2 to option
1 for financial reasons, and this precludes them from batching in the future.

~~~
pavel_lishin
> _they 'd be required to list all the actual beneficiaries on every payment,
> which can't really be done for reasons_

How so? If they can list the beneficiaries on the _individual_ payments, why
can't they lump them into my single-payment?

~~~
PeterisP
They can list _a_ beneficiary on the payment, not an arbitrary number of
beneficiaries. They can list _a_ beneficiary tax residence on the payment, and
that'll apply for the whole payment. Two beneficiaries means two amounts (you
have to specify how much goes to person A, anyway), and thus two payments.

------
AlexandrB
Patreon has just updated their blog with the rationale for the change:
[https://blog.patreon.com/updating-patreons-fee-
structure/](https://blog.patreon.com/updating-patreons-fee-structure/)

Unfortunately, changing the payment structure to what they're proposing -
while easier to understand - removes any payment-processing value that Patreon
was providing. Putting the friction back into these kinds of micro-donations.

Seems like a bad business move to me. The hard problem here was making micro-
donations cost-effective, not creating a website where creators could host
links to content.

Edit: The relevant paragraph.

> To do that, we need to move our payments system to treat your pledges like
> any other subscription service. In other words, we need a system that
> charges patrons at the time of their initial pledge, and on the anniversary
> of their pledge each month thereafter.

So every individual monthly pledge will result in a CC transaction now. I'm
guessing in cases where two pledges fall on the same day Patreon will still do
one CC transaction and pocket the $0.35 they saved?

~~~
tmorton
Ok, that link makes things clearer, and I can understand their position a bit
more.

But they missed the BIG OBVIOUS solution: charge a pro-rated "first month"
pledge, then combine all subsequent pledges like they do now.

For example, if I become a patron at the $10/month level, on the 15th of the
month, they can charge me $5 immediately. Then the $10 gets added to my
regular charge on the first of the month, and everyone saves in processing
fees.

As a patron, I would much rather get one charge per month on the first. The
current schedule works great.

~~~
rinon
There are often privileges and perks associated with being a patron of a
certain creator. These perks aren't pro-rated, thus subscribing late in the
month for a day or two might be a viable way to cheat this system. Personally,
I don't think this is a huge deal, and, if this is their reasoning, it's a
mistake.

~~~
ekimekim
You could even do it where you pay the full cost immediately, but the
difference between that and the prorated cost counts as a credit to the next
start-of-month payment. eg. If there's a $100 reward tier and I sign up 60% of
the way through the month, I immediately pay $100, then at the start of next
month my $100 pledge is discounted by the $60 I overpaid for the previous
month, so I only pay $40.

Effectively, it flips the first two months so you pay the full amount
immediately but if you stay on for at least two months it all balances out in
the end.

EDIT: Ninja'd by sibling comment

------
NelsonMinar
$0.35 fee on a $1 donation is a lot of friction.

The $0.35 / donation fee doesn't make sense to me. It sounds like a credit
card transaction fee. But Patreon charges my CC once a month. So why not
charge me the $0.35 once a month? Why once per donation?

The 2.9% part seems fine to me. So does shifting the costs to the donators.
But why charge me per donation instead of per credit card transaction?

 _Edit_ this article has a nice analysis: [https://www.pretty-
terrible.com/funny-money-patreon-style/](https://www.pretty-
terrible.com/funny-money-patreon-style/)

~~~
dtech
Exactly. If you support 10 creators they get to keep 90% of the 10x$0.35. The
argument that it's for payment processors is utter bollocks.

~~~
jasonlotito
Why do you think it's bollocks? It makes perfect sense. A transaction fee + %
is common with payment processors. Couple that with new rules coming down the
pipeline (as well as common sense when it comes to processing transactions for
other people), nothing about the pricing is unreasonable. Quite the opposite,
in fact.

~~~
extrapickles
The entire point of Patreon is to spread the transaction fee across the people
you are backing at $1/month or $1/post.

If they had this 2.9%+$0.35 fee get charged when they charge my card, I would
be fine with it. Its the per creator charging of it that is ridiculous. Most
of the people I back is at the $1 level, which would be not viable with the
new fee.

There is no good reason for this, as even paying to the creator should be lump
sum via ACH, rather than hundreds of $1 transactions. ACH (a electronic check
system in the us) charges a very minimal amount for a connection to the
network to cover admin costs. Current fees[0] are
$264/yr+$0.000185/transaction. Even with paying ACH fees for both ends
(creator and the patreon) and refusing to aggregate, ACH fees are still a
rounding error.

What they should be doing is offering you to pay via ACH to reduce fees so the
creators can actually get a bigger share of the $1 you spend.

[0]: [https://www.nacha.org/ach-network/administration-
fees](https://www.nacha.org/ach-network/administration-fees)

~~~
jasonlotito
> The entire point of Patreon is to spread the transaction fee across the
> people you are backing at $1/month or $1/post.

That's decidedly false. The entire point of Patreon is to support creators,
and to make it easy for creators to get that support.

> There is no good reason for this,

There are. Legal reasons. Banking reason. Simply put, lumping together
transactions is dangerous. Dangerous for creators, dangerous for patreons, and
dangerous for customers. I'm surprised they did it this long.

> as even paying to the creator should be lump sum via ACH,

What does this have to do with the majority of people paying via CC?

~~~
extrapickles
> There are. Legal reasons. Banking reason. Simply put, lumping together
> transactions is dangerous. Dangerous for creators, dangerous for patreons,
> and dangerous for customers.

You still keep records of who paid who (eg: This dollar in creator X's account
came from backer Y), they are "lumped" as far as the CC processor is concerned
so you don't have to pay that per-transaction fee for each creator backed.
Basically, as long as the transactions are internal to Patreon, the
transaction fees should be inline with the cost of a few rows in a database.

> What does this have to do with the majority of people paying via CC?

If they really were interested in reducing fees, they would let people pay via
ACH, which it currently does not look like they do.

------
pwinnski
So patrons will now be responsible for covering the Stripe fees, and Patreon
is still taking an _additional_ 5% for their services.

The Stripe fees were previously taken out of the creators' portion, so it made
a big difference to a creator whether they had one patron for $100/month or
100 patrons for $1/month. But that was hidden from patrons, who could easily
and happily pledge $1 to a dozen creators.

Can I now pledge 63 cents, so that the cost to me is $1?

Also, I'd be shocked if me pledging $1 to a dozen creators resulted in a dozen
Stripe charges. Clearly Patreon should run those charge once, so my $12 costs
only 70 cents from Stripe.

~~~
ceejayoz
Patreon _wants_ us to think they're Stripe fees, but they're not.

When I pay $17 for my monthly pledges, that comes out of my card as one single
transaction, with one single $0.30 Stripe per-transaction fee.

Stripe also offers high-volume clients a discount on the 2.9% rate, which
Patreon must be big enough to get.

~~~
caseyf
> Stripe also offers high-volume clients a discount on the 2.9% rate, which
> Patreon must be big enough to get.

Yep. They pay 1.9% (source: [https://patreon.zendesk.com/hc/en-
us/articles/204606125-How-...](https://patreon.zendesk.com/hc/en-
us/articles/204606125-How-do-you-calculate-fees-))

Also, Paypal offers a 5 cents + 5% micropayments rate that they take advantage
of.

The 35 cents plus 2.9% is clearly designed to make you think that they are
processing fees and I'd be very surprised if Patreon wasn't putting at least
half of that into their pocket.

~~~
jameskegel
5 cents and 5% is ridiculous if it is cost-plus, but if it is indeed a flat
rate, considering how small some of these microtransactions can be, and the
overhead involved for a transaction of any size, it starts to make sense.

------
ThrustVectoring
I cancelled all my pledges over this, it's a huge breach of trust IMO. I set
things up to authorize Patreon to charge me $X per month. They unilaterally
decided to use that authorization to charge me $X + service fees per month
going forward. They announced this by sending me an email that takes several
minutes and multiple paragraphs for me to understand that the cost to continue
my Patreon subscription would go up next month.

I don't give authorization for recurring charges to companies that
unilaterally decide to foist price increases on me.

~~~
ridgewell
Agreed, I've similarly cancelled all my pledges and I am very disappointed
that Patreon has done so without a clear email and explanation of why to boot.

------
rcthompson
Since the graphs is Patreon's own blog post are so grossly misleading, I made
my own: [https://mneme.dedyn.io/shiny_users/ryan/patreon-
fees/](https://mneme.dedyn.io/shiny_users/ryan/patreon-fees/)

Not surprisingly, the look nothing like Patreon's graphs. For any pledge of $4
or less (and probably a lot more than that), Patreon is now taking more of the
pledge for themselves. Since this likely represents the vast majority of
pledges, Patreon is effectively raising their prices without admitting that
that's what they're doing.

~~~
totallysafe
probably because your `Patreon_Old_Max_Fee` and `Patreon_Old_Min_Fee` are
wrong. The portion taken has _never_ been as low as 2% on a $1 pledge. From
their old FAQ: "Stripe charges 1.9% + $0.30 per transaction. PayPal charges 5%
+ $0.05 per transaction."

So, under the old fee system, for a $1 pledge, the service fee was either
$0.32 for Stripe or $0.10 for PayPal. On a $10 pledge, it was $0.50 for Stripe
and $0.55 for Paypal.

~~~
rcthompson
I just went based on the information given in their blog post, which said "an
additional third party processing fee that ranged from 2% – 10%".

Edit: I'm not exactly sure how to calculate the fees based on the info in
their FAQ. Taking Stripe as the example, they say the fees are 1.9% + $0.30
per transaction. So if I pledge $10, I guess that means that Patreon charges
me an amount $X such that X * 1.019 + 0.3 = 10? And if so, do they take their
own 5% cut out of $10 or out of $X?

Edit 2: I took my best stab at it and replaced the min/max with specific
entries for Stripe and Paypal.

~~~
totallysafe
> I just went based on the information given in their blog post, which said
> "an additional third party processing fee that ranged from 2% – 10%".

that's probably because the average pledge size is probably much closer to $10
than $1

> I'm not exactly sure how to calculate the fees based on the info in their
> FAQ...

What you're guessing seems spot on. If you pledge $10 under the old system,
then Patreon took a 5% cut of $10, and Stripe took 1.9%*$10 plus 30¢. So, the
patron paid $10, Patreon got 50¢, Stripe got 49¢, and the creator got the
remaining $9.01.

~~~
rcthompson
The average might be close to $10, but I'll bet the median pledge is much
closer to $1.

------
egypturnash
I'm a creator who uses Patreon. Most of my support is $1 pledges; I have a
couple small pledges I make to other creators, as well.

I heard about this entirely through people talking about it on Mastodon.
Didn't get any email from Patreon about this, not even lost in my spam folder;
the only email I have from Patreon going back for a while is "hey you got
paid", "someone made/changed a pledge", and "someone commented on one of your
posts".

I'm not anyone huge, I make about $800 a month on a really productive month,
and I don't make videos which is sometimes all Patreon seems to care about - I
quit subscribing to their creator newsletter because it was nothing but chirpy
articles on why and how you should be making video content!!11!! - but I kinda
feel like, I dunno, maybe I should have had, like, some email in my inbox
about this?

\----

I really hope that everyone (including me) is misreading the detailed
explanation of How This New Fee Structure Works, because it sure does sound
like they're going to be imposing a 2.9%+35¢ transaction fee to every single
pledge _before_ they add up all of the pledges you've made to the dozen
creators you might support on Patreon, instead of _after_. Which adds up
_really quickly_.

If this is the case, I guess I get to see if being a Featured Project twice on
Kickstarter is going to be of any help in getting into their new invite-only
Patreon-alike d.rip...

edit: They updated the FAQ page on the new fees to address the concerns of the
per-thing creators like me. [https://patreon.zendesk.com/hc/en-
us/articles/115005631963](https://patreon.zendesk.com/hc/en-
us/articles/115005631963)

>Q: How does this impact me as a per-post creator?

>A: As a per-post creator, your patrons will see the 2.9% + $0.35 service fee
added to _all paid posts_. For example, if you are a per post creator making
two paid posts per month, your patrons will be charged 2.9% + $0.35 for each
paid post.

(Italics mine.)

are they, like, completely unbundling all of their charges from each other
now? Why are we even _using_ Patreon any more if that's the case?

~~~
finkin1
Here's the email I got at 11:23AM this morning:

"Dear patron,

Your support is truly changing the lives of creators around the world. You
give creators a reliable paycheck that enables them to do their best work.
Thank you thank you thank you.

In order to continue our mission of funding the creative class, we’re always
looking for ways to do what’s best for our creators. With that, we’re writing
to tell you of a change we’re making so that all Patreon creators take home
exactly 95% of every pledge, with no additional fees.

Aside from Patreon’s existing 5% fee, a creator’s income on Patreon varies
because of processing fees every month. They can lose anywhere from 7-15% of
their earnings to these fees. This means creators actually take home a lower
percentage of your pledge than you may realize. Our goal is to make creators’
paychecks as predictable as possible, so we’re restructuring how these fees
are paid.

Starting December 18th, we will apply a new service fee of 2.9% + $0.35 that
patrons will pay for each individual pledge. This service fee helps keep
Patreon up and running.

We want you to know that we approach every change with thoughtfulness for
creators and patrons. By standardizing Patreon’s fees, we’re ensuring that
creators get paid to continue creating high quality content. If you have
questions or would like to learn more, please visit our FAQ here.

Sincerely, The Patreon team"

~~~
egypturnash
thank you <3

it's good to see how they're pitching this to the patrons, I've mostly just
seen fellow creators running around with their hair on fire about this.

~~~
kaybe
If you have pledges yourself, shouldn't you have gotten this email too?

~~~
egypturnash
Yeah, I do and I should. But I didn't. Which perturbs me.

------
Obi_Juan_Kenobi
I just cancelled all my pledges. This is absurd.

The whole point of Patreon was to bundle small charges to avoid these fees,
and to hopefully make support more reliable/consistent for creators. If
they're going to fail outright on the former pledge, then I want nothing to do
with them.

I strongly urge others to cancel pledges, as this is the strongest feedback we
can provide. There are many ways to support creators.

~~~
runj__
The really sad part is that they tricked people into potentially leaving their
job and then ripped the carpet out from under them.

I'm really thinking of dropping pledges and simply mail them some cash but I'm
afraid I'd skip the last step and hurt the creators I love in the end.

~~~
ZenoArrow
I dropped my pledges off the back of this news. I was only supporting one
creator, so it wasn't that dramatic. Also, I left a comment before I cancelled
indicating I was only leaving because of Patreon's business practices, and
suggested I'd like to support the creator again if they open up an account
with a competitor. Liberapay would be my preferred choice but as long as
Patreon get the message and the creators don't have to suffer, some good can
come out of it.

------
eropple
This is pretty crazy of Patreon. I mean - they can easily bundle pledges on
charge. I don't understand why they'd drop a separate charge for each one,
except for "fuck it, they won't care, right?".

~~~
Hemospectrum
They can bundle the charges to the patrons to reduce cost to themselves, while
still charging fees as if they were making individual transactions.

I’m inclined to believe they’re already doing this.

~~~
zkms
> I’m inclined to believe they’re already doing this.

AFAICT (from my charges) they have indeed been bundling charges. Charging the
%+constant fee for _each patron_ given that there is _no individual_ payment-
processor action for each patron on the debit side is absolutely nasty.

I'm not asking them to eat payment-processing fees, I'm not asking them not to
make a profit, I'm simply asking them to _not charge for fees for transactions
that never happened_.

I hope Hatreon (or any other patreon clone) steals half of their userbase
because they absolutely deserve to be punished and chastised for this
manipulative nonsense (along with their banning legal-but-NSFW content
producers); because nothing else but people exiting from Patreon will make
them feel _anything_.

~~~
eropple
Hatreon's a platform designed explicitly and specifically for white
supremacists, so _maybe not them_.

~~~
DuskStar
I think Hatreon was just designed to not censor things. At the moment that
happens to be appealing to white supremacists and right leaning content
creators, but I wouldn't be too shocked to see NSFW creators moving there
soon.

~~~
eropple
The name is literally Hate-reon, my dude. Its audience is well-defined.

I can definitely see a Patreon alternative that might do better by folks
getting some traction--Kickstarter as a PBC is interesting, I actually didn't
realize Patreon wasn't. But I know a decent few NSFW creators and I can't
imagine _any_ of them going to where the Daily Stormer and Richard Spencer
gets their funding.

Conflating self-declared Nazis with pornography is exactly what those Nazis
would like people to do.

~~~
DuskStar
Conflating Nazis with pornography wasn't really my intention - I just meant
that a site founded due to Patreon no-platforming people might also be a
destination of NSFW creators when Patreon starts cracking down on them.

As for the audience of Hatreon, I guess I was just taking their about page [0]
and community guidelines [1] at face value.

"Hate speech is protected speech. Hatreon exists in reaction to politically
motivated no-platforming at sites like Patreon. Always consider your local,
state, and national laws, but the site stands for free speech absolutism and
will protect creators’ interests against sovereign and corporate threats. Do
not abuse this protection."

In other words, "I disapprove of what you say, but I will defend to the death
your right to say it." \- which is a sentiment I can get behind.

[0] [https://hatreon.net/about/](https://hatreon.net/about/) [1]
[https://hatreon.net/guidelines/](https://hatreon.net/guidelines/)

~~~
eropple
That's one way to look at it, and that's the only remotely defensible way one
can wash their hands of aiding Nazis.

But it's dishonest. Taking money for Nazis is not the same as ensuring their
right to speak. It means you're doing business with them. You are providing
them aid and assistance, not even merely a place to speak (which no private
citizen is obligated to provide and no private citizen should be removed from
judgment for so doing). That's money that doesn't go merely to "speech" at
all.

In no place and at no time in history has enthusiastic, freely undertaken
business with Nazis made you freedom-loving or high-minded; it has only and
ever made you, in the best light of history possible, a sucker and a sap (if
not a collaborator). But it might make you money, so...

~~~
whatyoucantsay
> In no place and at no time in history has enthusiastic, freely undertaken
> business with Nazis made you freedom-loving or high-minded; it has only and
> ever made you, in the best light of history possible, a sucker and a sap (if
> not a collaborator). But it might make you money, so...

Read more history. The tangent you're rambling on about both muddies the
discussion and falls short of factual accuracy.

A man named Oskar Schindler enthusiastically and freely undertook business
with actual Nazis and even became a member of the Nazi Party. His actions
saved the lives of well over a thousand Jews and cost him all the money he had
amassed prior to the war. Hatreon has _nothing_ to do with this history and
Patreon's poor terms even less so.

~~~
eropple
Psst. Schindler was not merely a collaborator, _he was a Nazi_. You know the
whole story there, yeah? That he campaigned for Jewish labor _because it was
free slave labor_? That he had an attack of conscience and reached minimally-
decent-human-being status is certainly a thing--but all that enthusiastically-
and-freely-undertaken business was _Nazi-ass Naz business_ until his
conscience, a notable omission in heildudes like Richard Spencer, made him
confront that Jews are, y'know, people.

It is, perhaps, not exactly the hill you want to die on to go "b-b-b-but Oskar
Schindler!". Stormfront wants heads on sticks and burning crosses on black
folks' lawns. They don't care about Oskar Schindler and they don't care about
the plausible deniability that Hatreon really wants suckers and saps to buy
into. They know. They know it's there for them and only for them.

Don't use Patreon _if_ you don't like their terms. Don't use Hatreon _because_
they're for Nazis.

~~~
whatyoucantsay
> Psst. Schindler was not merely a collaborator, _he was a Nazi_.

Psst. Had you grown up in that time and circumstance, you undoubtedly would
have been, too. And it's unfathomably unlikely you'd have joined him as the
second of only two ever to be honored with a burial on Mount Zion and visited
by survivors for decades.

I see Hatereon and particularly Stormfront as grave threats and it pains me to
see people such as yourself strengthening both through relentless snarking and
bigoteering. You need only look in the mirror to understand why your society
is where it is and why the politics has grown so rancid. And it's not just
your society affected by your culture wars. American-style intolerance is
threatening to boil over into the rest of the world, too. You are a wealthy
and influential person, almost certainly in the 1% of the developed world, and
the second order consequences of your actions matter.

Setting all of that to one side, speaking of "dying on hills" and trying to
put a stutter in someone else's mouth is damned childish and more than a bit
irritating.

------
lindner
No one has mentioned [https://liberapay.com/](https://liberapay.com/) ?

They seem to deal with this problem by letting you fund a donation account and
then disburse funds on a periodic basis. This is also similar to donor advised
funds so I'm not sure why Patreon is doing this when other alternatives are
available.

~~~
kemenaran
I just cancelled my two pledges on Patreon, and migrated them to Liberapay.

The process was surprisingly smooth and easy. We'll see how it works on the
long run, but for now Liberapay looks like an excellent alternative. (Also
they don't take automatic fees for their own finances; tip is on a voluntary
basis).

------
adjkant
This should be at the top of HN. A tech company just cut the livelihoods of
artists and many other important groups of people all over an artificial fee.
This is disgusting and I hope a competitor beats them out ASAP.

~~~
Gracana
It is both outrageous and unsurprising. This is how these companies ("tech"
startups) are incentivized to operate. It is awful to watch this cycle happen
over and over and over.

~~~
jopsen
It also smells like another example of how taking VC money is going to ruin a
startup that could otherwise have grown organically.

------
chx
Let's run the numbers: [https://blog.patreon.com/updating-patreons-fee-
structure/](https://blog.patreon.com/updating-patreons-fee-structure/)

For a $1 pledge: previously creators took home 85c at least, so Patreon was
maxed out at 15c. Now they will charge the patron 37.9 cents and the creator
an additional 5c. So now they are maxed out at 42.9c. If 15c was enough to
break even this means 27.9c of pure profit. That's a _very_ nice profit rate!
(The rent seeking is too damn high.)

Let's presume patrons decrease their patronage so they pay the same as before,
so if they paid x before now they pay 1.029y+0.35=x ==> .97x-0.34. The patron
takes home 95% of this, .92x-0.32 Previously they took home at least .85x. So
we are looking at 0.07x=0.32 ===> 4.57

So if you were pledging below 4.5USD (let's be realistic: 5 USD, noone pledges
cents, not sure the platform lets you) and drop your pledge such that Patreon
charges you the same, then this hurts your creator. And many won't react
rationally and do the .97x-0.34 calculation, just cancel because hot damn, did
a company I authorized to charge me X amounts just unilaterally decided to
charge me more without proper clear notice (I just checked my home page and I
do not see a big read warning this month I will be paying more either on the
home page or the pledges page.)

Oh and many creators have various perks at 5USD which now they need to drop to
4.52 USD (again, does the platform allow for cents?) and encourage their
patrons to drop to that level. Patrons in this case pay 5 USD still and the
creator takes home 4.29. Previously, the creator took home 4.25-4.65.

------
simias
I can't really make sense of that article:

>That changes on December 18, when patrons will start paying 2.9% plus 35
cents for each individual pledge

Then:

>With this update, creators will now take home exactly 95% of each pledge with
no additional fees

Suppose you're donating $1, the .35 fixed "service fee" alone is 35% of the
pledge, not even counting the 2.9% variable amount. I don't understand how
they end up with the 95% figure.

~~~
InclinedPlane
Previously: patron pledges $1, patron pays $1, creator ends up with some
amount significantly less than $1, depending on all the fees.

Soon: patron pledges $1, patron pays $1.38, creator ends up with $0.95.

~~~
simias
Is it a common scheme? It seems super misleading to do it that way, why have a
percentage fee on both sides? "I pledge $x, I end up paying more and the
creator ends up receiving less".

~~~
y4mi
i'm not defending patreon here, but it is pretty normal.

Even the state takes both income tax and sales tax.

~~~
jopsen
Not including taxes in the prices is a US thing only.

Most other countries have sane regulation that foster competition and
transparency.

~~~
y4mi
I know, I'm German after all and pay mehrwertsteuer on everything.

But wherever it is listed directly up front or not doesn't change the fact
that the state takes money on both sides. When you're earning it and when
you're using it.

The actual tax in Germany is about 50 %, it's just hidden in several smaller
percentages

------
Sir_Cmpwn
For those considering an alternative to Patreon, I have a self-hosted, open
source payment platform that takes one-time and recurring donations via
Stripe:

[https://github.com/sircmpwn/fosspay](https://github.com/sircmpwn/fosspay)

I offer this to my supporters in addition to my Patreon page.

[https://drewdevault.com/donate](https://drewdevault.com/donate)

[https://patreon.com/sircmpwn](https://patreon.com/sircmpwn)

~~~
JoshTriplett
That doesn't provide the benefit of batching, though. (Of course, now neither
does Patreon.)

Have you considered putting up a hosted version that batches Stripe charges?

~~~
Sir_Cmpwn
I hadn't, no. That sounds like a good idea.

~~~
CodesInChaos
If you accept money on behalf of creators, you probably need some kind of
financial service provider license.

Handling chargebacks+fees might be a bit annoying as well.

------
lathiat
Lots of people unsubscribing apparently, screencap:
[https://twitter.com/lazygamereviews/status/93884540533643673...](https://twitter.com/lazygamereviews/status/938845405336436736)

~~~
Obi_Juan_Kenobi
I just did. I hope others do as well.

~~~
gordaco
This sucks because I'm tempted to do it as well, but this means that I can't
support the content creators that I like.

I really hope that a better alternative comes soon. I've seen a lot of people
using [https://ko-fi.com/](https://ko-fi.com/) (and I've used it to donate to
them a few times), but it's not exactly the same.

~~~
tortasaur
Creators won't bother to find alternative platforms until the users leave the
harmful dominant one.

------
ocdtrekkie
Wow. I only have a pile of $1 pledges right now, and this will significantly
increase my bill for almost no gain for the people I'm supporting.

~~~
adjkant
Exactly no gain if I'm understanding it.

~~~
trowawee
Well, the analyses that I'm seeing suggest they'll see about $0.05 more per
pledge. So, not "no gain", but very little gain, and almost certainly some
cost as patrons leave the service over the price increase.

~~~
adjkant
Can you detail that math? I've seen math thrown around all over this thread,
much of it contradicting. To me, this seems completely negative:

Before: 7-15% net fees - $100 = $93 or $85 dollars

Now: 8%+ net fees with near 30% fees for $1 and 10% fees for $10

That math is using net fees when considering the amount the patron pays vs the
person gets. Patreon is pulling some shady math by pretending that the patron
isn't paying the original fees as part of the total amount.

To me, it looks like for nearly all cases, fees are going to increase. I would
revise my statement to "loss, not gain", even if all patrons stay on the
service.

~~~
trowawee
Sorry, I should have worded that more precisely. I was basing it on this:
[https://twitter.com/wombatoverlord/status/938849760198447104](https://twitter.com/wombatoverlord/status/938849760198447104)
and various pieces I've read by creators. It looks like creators were
averaging around 89% in net fees previously, where they will now be averaging
95%. So, ~$0.05 more on a $1 pledge.

~~~
adjkant
The problem is that that $1 pledge is no longer just $1. It's bait and switch
math.

------
ProfessorLayton
It is definitely a money grab. They're even making it so that you can't use
your patreon balance to pay other creators, ensuring you'll need to pay their
"service fee"

[https://twitter.com/zandravandra/status/938897708286390272](https://twitter.com/zandravandra/status/938897708286390272)

------
joelthelion
Another perfectly good startup killed by the dreams of grandeur of silicon
valley investors.

Not everybody company is supposed to be the next Google, guys.

------
gkya
I was considering Patreon for some stuff I planned to publish in somewhat
distant future, but now this makes me suspicious. On such a platform I'd
rather want to have numerous people that give me $1 monthly rather that a
bunch that pays some three-figure sum, should I want to live off those
pledges. If a $1 pledger decided to not support me anymore, I wouldn't have
lost a big part of my income, but if instead someone who paid $100 or $200
decided to stop paying, that'd be a big change. I'd actually prefer to not
allow people pay me more than $10 or 20 to not allow that kind of thing
happen, and to not allow myself to have the illusion thereof.

As far as I understand, this new scheme will punish the kind of pledger that I
said above I'd prefer: who pledges a couple $ or so. If I want to pledge $10
monthly, I'd better give it to a single creator than to 5-10 creators. In this
case as a potential creator I'd be happier with a bigger cut from what I
receive in expense of free payments on the patron's side.

------
nemothekid
Don’t Visa/MC frown on pushing CC fees on to consumers? And why now? Is it
simply a cash grab or did their payment processor ask Patreon to change their
tune?

~~~
kelnos
I believe the general rule is that merchants can't charge customers more for
CC payments than they do for cash payments. I assume Patreon doesn't take cash
payments, so there's no issue there.

~~~
cortesoft
That used to be the case, but it certainly isn't anymore. 95% of gas stations
in Los Angeles have a separate, lower, price per gallon for cash.

~~~
floatingatoll
Providing discounts for cash, as gas stations do, was legal prior to 2013 (and
remains legal to this day). In 2013, charging customers a clearly-notified fee
for accepting credit cards was authorized for all merchants; most simply
choose not to.

~~~
chimeracoder
> In 2013, charging customers a clearly-notified fee for accepting credit
> cards was authorized for all merchants; most simply choose not to.

The federal ban on charging fees was lifted, but many states (including New
York and California) also still outlaw this at the state level.

In addition, merchant agreements often prohibit it - for example, merchants
that take American Express cannot charge fees for any transactions, even the
ones that run on Visa or Mastercard.

------
buovjaga
Flattr is making the most out of the situation :)
[https://blog.flattr.net/2017/12/patreon-
fees/](https://blog.flattr.net/2017/12/patreon-fees/)

~~~
phjesusthatguy3
"We still think Patreon is a great solution for creators, but they now seem to
be less about supporting creators plural, and more about supporting a creator
singular (or perhaps one or two creators)"

Does anyone know what they're talking about with the "or perhaps one or two
creators" part?

~~~
trowawee
With the fee change, if you have a budget of, say, $15 to spend on creators on
Patreon, it makes sense to split that into as few pledges as possible to
minimize the number of times you pay the fees.

------
zapt02
This is doubly weird because Patreon only charges users once per month, so
they are really only paying one transaction fee per user. They also charge VAT
for european pledgers, already bringing up the pledge amount by 25%.

------
shabble
Wasn't there something recently about Patreon having problems
(legal/regulatory) with the way they were bundling all the contributions for a
user and only submitting a single card/processor transaction for the total?

If so, that might explain why they want to effectively unbundle everything
again, even if it makes everything worse for everyone.

The marketing-weasel language of their "robust question and answer page"[1] is
a little hard to take regardless of actual reason though.

[1] [https://patreon.zendesk.com/hc/en-
us/articles/115005631963-W...](https://patreon.zendesk.com/hc/en-
us/articles/115005631963-What-does-Patreon-s-service-fee-mean-for-me-)

~~~
walterbell
Do you recall which rule/law required unbundling of charges?

~~~
cjg_
This is most likely due to EU's new PSD2 regulations (see
[https://stripe.com/connect/eu-guide](https://stripe.com/connect/eu-guide))

~~~
gamblor956
If you ride the guide in its entirety (or the text of the PSD2 at [http://eur-
lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX...](http://eur-
lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32015L2366&from=EN)), you
would see that one-to-many transactions are fine under the PSD2 regulations.

The most likely reason for the change in fee structures is that Patreon simply
needs to charge more money.

------
ceejayoz
I'm fine with them taking 2.9% (although I'm sure their volume lets them get a
discount below that), but $0.35 per PLEDGE is lunacy. They don't make
individual charges for each pledge.

------
petercooper
I think this is more psychologically jarring than financially jarring. It's
like if Amazon turned around and said, we're making Prime free, but it's a
flat 25 cents for your previously free delivery. Doesn't _sound_ a lot, but
that's a psychological barrier that'll pop up every time when you're about to
order something.

Consumers _really_ love knowing up front what they're committing to pay.
Adding extra charges on is not going to help at all with adoption.

------
Fomite
"Concern" nothing. I've already lost enough patrons on the campaign that
supports a side project to eat up a sizable portion of the supposed benefit to
me.

~~~
Fomite
It's now up to _twice_ what the benefit would have been in lost Patrons.

------
cdancette
I think patreon should be way more precise to how much is going to the creator
and how much they take when you make a pledge.

When I pledge 1$ to some creator, I was unsure whether the creator would get
the whole money and I would pay fees in addition, or if patreon would take the
fee on those 1$.

~~~
astura
Well, that's not at all unusual, 99.9% of credit card transactions you don't
know the fee the merchant is paying.

~~~
cdancette
I mean they should at least say how much the creator will receive, and how
much he won't (patreon fees + credit card fees, I don't care about the
details).

~~~
astura
Once again, when you donate to an charity or buy a product from the shelf you
don't know how much the charity or retailer would receive when you pay with a
credit card.

Not unusual.

When you check out in Walmart how much is the fee Walmart pays? You have
(basically) no idea.

~~~
cdancette
Of course not, but it depends if you consider that you're paying the creator,
and that the platform is just an intermediate, or if you're paying the
platform for a service and they pay the creator with their revenue. If they're
just an intermediate and I want to pledge 1$ to the creator, I expect that he
will receive 1$, and if not, I want to know how much I need to give in order
that he does.

And you're wrong about NGOs, usually they do provide how your money will be
used, what is the amount of money that will go for their internal costs, and
what will be used really for charity. I wouldn't absolutely not give to a
charity that would not provide me those details.

------
zAy0LfpBZLC8mAC
Oh, closed systems will use their semi-monopoly position to raise prices? Who
would have thought ...

------
walterbell
Is there a viable alternative to Patreon?

~~~
egypturnash
Kickstarter's got one, but it's invite-only right now.
[https://d.rip](https://d.rip) \- I could find no sign of their fee structure
anywhere on the site. There's also
[https://liberapay.com](https://liberapay.com) \- a non-profit Patreon clone,
whose code is public. You _may_ have to be creating open source content, I'm
not sure. Seems to pay weekly, does not take any cut themselves (?!?!?).

~~~
kemenaran
I just migrated my two Patreon pledges to Liberapay, and it worked
surprisingly well. You decide how often you want them to charge you—and then
they re-distribute the money on a per-week or per-month basis to creators.

So you can choose to be charged every month (and have ~2% of banking fees), or
to provide money for the next 3 months (and the banking fee will be less).
Money will be redistributed to creators once a week (or once a month) anyway.

Plus they only charge banking fees, nothing for themselves (tip is voluntary).

------
whiskeySix
I was sending a favorite podcast of mine (It's Just Banter) $1 a month. But
with a 35 cent fee to send 1 dollar, it seemed crazy, so i cancelled it. I'll
find another way to support TC and Jake.

------
hysan
Ok, as someone who pledges a few dollars to many creators, this sucks. I also
haven't seen any big improvements to their platform featurewise; I've been
repeatedly asking for email digests since they took over Subabble and they
keep replying with, "Great idea. We'll pass it along." So no idea what they
need more money for. I'll probably be stopping my pledges after trying to
discuss this with the creators I support (and Patreon but they probably won't
say much).

------
xchip
Greedy Patreon.com, I already deleted my account.

You need to send an email to: disable@patreon.com

~~~
dawnerd
Or just click disable in the dashboard. Pretty easy, actually.

~~~
xchip
Thanks! It seems that this option only shows up in the desktop version and not
in the mobile version!

------
protomyth
Hold up, they take one charge on my PayPal and if I understand this correctly,
they are going to charge me for each of my pledges?

So, 4 x $1 pledges that are taken as one charge will now cost me $5.52 ($1 +
$0.35 + $0.03) * 4))?

~~~
kevin_b_er
Yes. They only charge you once, though. So the extra fees aren't payment
processor fees anymore and they pocket the rest. Calculate the differential on
the paypal transaction fee and you'll arrive at patreon making some sweet
percentages.

Patreon used to have PayPal charges 5% + $0.05. So let's presume they're
paying the same.

They charge you once for $5.52. Paypal gets $0.326 + $0.05 out of it. $3.80
goes to creators. Instead of Patreon making $0.20, they now make $1.344.

Yes, you read that right, Patreon is making $1.344. ~35% profit margin vs 5%
off your donation. They've multiplied their cut several times over.

------
em3rgent0rdr
YouTube, now is a great opportunity to integrate your own patronage system (or
even a simple per-video or per-channel donate button)!

------
anigbrowl
This is why I have been skeptical of Patreon as a revenue source for working
artists. I don't like the whole copyright regime and would drastically alter
it, but the basic idea of a fungible copyright is a lot more bankable than
renting a tin cup from a monopoly provider. Not hating on Patreon which I
admire in general, but a single provider is undesirable compared to federated
micropayments.

------
1_2__4
So assuming this is yet another VC-funded firm being pushed to only go after
"whales" and cull undesirables... Who are the whales, and who are the
undesirables? My tinfoil hat says adult art is made up of more/smaller pledges
and they're hoping this will run them off the service. That's typically why
companies do this.

------
rinon
Great summary of the math from reddit:
[https://www.reddit.com/r/patreon/comments/7i2kqd/patreon_wil...](https://www.reddit.com/r/patreon/comments/7i2kqd/patreon_will_start_charging_patrons_a_credit_card/dqvrb9d/)

------
huac
I'm fairly sure this is tied to anti-money laundering rules (but would be
happy to be corrected). Basically, if Patreon bundled patron payments and then
paid them out to creators, it could be construed as transaction laundering.

The basic problem is that it would be cheaper for everybody involved if
Patreon would charge each patron a bundled amount for all their supported
campaigns, and then pay out to each creator everyone's support to them. This
means that there are N + M transactions, where N is number of patrons and M is
number of creators. However, due to a myriad of rules, they actually need to
pay out N * M transaction fees, because each patron's contributions will be
going more or less directly to each creator (minus Patreon's cut of course).
The extra fees more accurately represent the cost of doing business with
credit cards.

This article explains the AML rules in this area:
[https://www.trulioo.com/blog/transaction-laundering-a-
growin...](https://www.trulioo.com/blog/transaction-laundering-a-growing-
threat-to-the-payments-ecosystem/)

~~~
rsynnott
> I'm fairly sure this is tied to anti-money laundering rules (but would be
> happy to be corrected). Basically, if Patreon bundled patron payments and
> then paid them out to creators, it could be construed as transaction
> laundering.

I doubt this. If I buy 10 1 euro iPhone apps in a day, Apple will charge me
$10, in one transaction, then eventually pay out a euro less their fees to
each developer. I don't really see why this would be different.

~~~
huac
These are recurring payments which might be treated differently.

------
coffee9
Setting themselves up for a fall with all the recent rules and fees they're
adding.

------
Paul-ish
I wonder if this change has anything to do with the median number of creators
the typical Patreon users supports. A lot of angry people here sound like
power users, but that might not representative of the overall userbase.

------
robryan
Why is someone as big as Patreon paying 2.9% + 35 cents? Even stripe should be
able to do better than that?

~~~
dawnerd
They're not, thats the point. They say in their FAQ their stripe rate is 1.9%

------
rainbowmverse
Duplicate:
[https://news.ycombinator.com/item?id=15869233](https://news.ycombinator.com/item?id=15869233)

Though this one seems to have gotten more attention.

------
quadrangle
It's actually not about new fees. They are adjusting fees in a funny way, but
it's all about trying to make their freemium assumptions work. Most creators
are using Patreon to enable a partly-gratis partly-paywalled business model.
None of this would have come about if it were just about donating to creators
you like.

[https://wiki.snowdrift.coop/market-research/other-
crowdfundi...](https://wiki.snowdrift.coop/market-research/other-
crowdfunding#fn5)

------
rb808
I really thought this is a space where crypto currencies should shine. Is
there an established base of people that take a crypto currency. BTC is no
longer useful for this, but something must be.

~~~
s73ver_
Except don't most crypto currencies have transaction fees as well? Ones which
can be far, far more than credit card ones (See: Valve dropping BTC from
Steam).

------
revelation
Five percent is already ridiculous, this is just getting greedy.

You would think YouTube would finally eat their lunch here but then the CEO
over there can't even update her own recently launched channel so fat chance.

~~~
InclinedPlane
The problem is that google (or alphabet) is just catastrophically bad at most
customer relationships (except for ad buyers, though even then it's iffy).
They treat all the content creators on youtube like users instead of
customers. And they don't care about building a platform, ecosystem,
community, etc. that supports the creators, they're willing to just let things
flap in the wind and hope for the best.

------
kirillzubovsky
We used to run a marketplace for designers and one of the things we learned
(too late) was to charge more. Pick a number, double it, and you are still
probably not charging enough. You can't run a service on dog food forever.

Sure Patreon raised funds, but those funds can't subsidize them for a
lifetime, they gotta get sustainable and do it fast. There is not a chance
they will be wasting time to build their own credit-card processing, so Stripe
fees are here to stay.

Although contributors are important, Patreon would have nothing without their
creators. Creators make the content which people pay for, and creators need to
put food on the table to keep doing what they are doing.

If you are a creator making $2,000 a month, for example, then an extra $100 is
an extra trip to the grocery store, and that's important. If someone wants to
fund a creator, they will, and the extra couple of bucks isn't going to
discourage that.

Furthermore, I suspect Patreon has data on how much is being contributed by
each user. I doubt, like the top comment suggest, that 1 person on the
platform would fund 100 creatives. Probably 1:3 ratio, with a couple of
outliers, is most likely.

This is a good change.

p.s. If they don't have it yet, expect Patreon to start partnering with places
like Teespring to offer merch by their creators. It just makes sense.

~~~
trowawee
> If someone wants to fund a creator, they will, and the extra couple of bucks
> isn't going to discourage that.

I'm explicitly hearing the opposite from creators on Twitter. People are
already seeing patrons defecting from projects over this.

~~~
kirillzubovsky
Like Jason Lemkin said, the customer who churned is the customer you've never
had.

~~~
freeone3000
Well, small problem with that - words have meanings. They were a customer, in
that they were giving Patreon money. Now they are not a customer. It's not
that they were never a customer, because they were giving Patreon money. And
now they're not.

