Links Roundup 12/08/17

Written by Natalie Luhrs

I'm a lifelong geek with a passion for books and social justice. And I give absolutely no fucks.
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December 8, 2017

Well. Hi. I spent entirely too much time yesterday on Twitter yelling about Patreon but at the same time: it has been ages since I’ve had that much fun on Twitter, so I’m calling it a wash. I have a lot more thoughts based on additional information I’ve found since my previous post about Patreon’s changes, so you’re going to have to bear with me.

Jack Conte, CEO of Patreon, tweeted that they have to de-aggregate pledges and charge all those extra fees because of one reason and one reason only: for the creators who require their patrons to make payment upon subscription instead of as part of the regular billing cycle, which they added fairly late in the game to prevent people from subscribing, sucking up all the patron-only content, and then unsubscribing before the billing date.

There are a few solutions to this. You can track access to the patron-only content and if someone does this repeatedly, you ban their ass from your platform. You can restrict access to the last 30 days of patron-only content and once their payment goes through at the beginning of the month, the rest is unlocked. There are solutions to this which do not require de-aggregating pledges and the chart where they’ve got the current system payment process laid out is a bald-faced lie, as they currently aggregate monthly and per item pledges together and bill them all together as opposed to billing the per item pledges as they occur. The fact that Patreon didn’t design their internal system to be flexible enough to manage three different types of pledge is not the problem of the creators or of the patrons and the solution should not be on the backs of the $1 patrons.

But apart from that, what I find most interesting about this is the fact that they will now be collecting a steady stream of money throughout the month instead of once a month. This gives them much steadier cashflow, for one. For another, I’d like to know how they propose to make these pledges–collected throughout the month–available to creators. Will they be disbursing them as they come in? Will they be collecting and batching them out once a week? Once a month? How long will creators have to wait to withdraw the funds?

I did some back of the envelope calculations on Twitter based on their estimated $150 million total payout to creators in 2017 (citation) and they’re grossing roughly $12.5 million a month. If they’re pulling that in over 30 days, that’s around $400,000 per day. Give or take a few thousand. And that money just isn’t sitting there, doing nothing. It’s earning interest. Interest which is being compounded, probably on a daily basis. That could add up to a substantial amount of money, especially if Patreon has lengthened the time between collection from patrons and withdrawal availability to creators. As long as that money is sitting in a Patreon account, it is earning money for Patreon, not the creators. They are also, per this screencap, planning to eliminate creator-to-creator payments within their system, which means more fees for everyone! Do this enough and eventually Patreon will have all the money!

This article makes it clear that Patreon primarily values their most successful creators. These would be creators that they can use to attract other successful creators into what they call a “virality loop”–oh my god it’s the techbro version of the Law of Attraction.  At the same time, the unnecessary de-aggregation of pledges manages to make their service much less attractive to people who pledge below $5 and those creators who haven’t become what Patreon calls a FSC–a Financially Successful Creator (which they won’t divulge the financial criteria for, but apparently one of the other criteria is the professionalism of said creator’s public-facing materials which is, right there, some gatekeeping bullshit). And this comes on the heels of their crackdown on adult content which happened right after they received $60 million in Series C venture capital.

I find all of this very, very interesting. To say the least.

On to the links!

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