Creators Are Concerned About Patreon’s Service Fee Change
Several backers and creators we spoke to are wondering what will happen next.
Image: Shutterstock/Patreon Composition: Samantha Cole
Update, 12/13: Patreon announced on Dec. 13 that it would not be enacting the new service fee, following an outcry of opposition to the change from creators and patrons using the platform.
Patreon announced Wednesday that starting on December 18, the crowdfunding site’s processing fee scheme would change. Creators are worried that the new rules, which shift the fees from creators to patrons, will result in fewer people supporting their work.
It will now cost patrons around $1.38 to give a creator $1 per month, instead of $1, which some creators believe could lead serial backers—those who support a lot of projects but at a very low monthly fee—to pull support.
“This fee hits low tiers the hardest and these dollar tip jar tiers really are the foundation of so many small creator patreon campaigns," Lacey Brannen, a webcomic creator on Patreon, told me in a Twitter message.
Instead of a transaction fee of 2-10 percent typically charged to creators monthly, the fee will soon be charged to patrons, in the form of a 2.9 percent fee plus a 35 cents processing fee for each individual payment.
This sounds incremental and inconsequential, but creators and backers have mixed feelings about what it means for low-tier backers on the site.
“We standardized our fees because it helps creators by giving them more clarity and security regarding their earnings,” Patreon wrote in a blog post to creators about the change. “Currently, creators can lose anywhere from 7-15% of their earnings to fees.”
A spokesperson for Patreon told me in an email that this change is something the company has been thinking about and working on for almost a year.
"We think endlessly about the creator and patron impact for every decision we make," Patreon said. "After running tests with both creators and patrons, we settled on a fee that would impact creators and patrons in the smallest way possible, considering both the amount that patrons pledge and the likelihood that they’ll keep supporting their creators on Patreon."
Under the current fee system, when a patron pledges $1, they pay $1. The creator gets a portion of that, and Patreon also takes a five percent cut. Once the change takes place, when a patron pledges $1, they’ll pay $1.38, and the creator gets 95 cents on the dollar no matter what. Patreon gets the remaining five percent.
At first glance, this seems good for creators, who won’t have to pay transaction fees anymore and take home 95 percent of what’s pledged to them. For backers, an extra 38 cents on the dollar for backing your favorite artist is probably not a dealbreaker for most. But in an effort to equalize fees across the board, Patreon’s passing the service fee on to backers—which ultimately could hurt creators if people start bail because of the extra charge.
“As both a creator and someone who has several pledges in other Patreon campaigns, the change is going to hit me hard in the wallet despite Patreon's claims that they want to give more back to the creator,” Brannen said. In addition to being a creator on Patreon, she supports a dozen other creators on the platform at the $1 tier. She says about one-third of her own patrons support her at the $1 tier, and that this change will force her to scale back.
“The reality is, people don't like being told they're being charged more money for the same thing with no extra benefit, so there's a good chance that some content creators may get the email from Patreon saying they're being charged an extra 2.9% + $0.35, decide ‘well, that's enough from me’ and pull their pledge entirely,” Scullion told me.
Parker Higgins, a self-described serial backer and activist at the Freedom of the Press Foundation, told me in an email that supporting a variety of creators (he’s currently a patron for “a half-dozen or so” campaigns) was more simple when what you see on Patreon is what you paid. Now, he’ll have to budget a bit more carefully when throwing support behind new campaigns. “[It was] incredibly easy to tack on new dollar pledges to friends who needed a little support, and that in turn put me on their patron list, where they could reach out for more or share their work.”
Some creators and backers are concerned about how this will shake out, but that doesn’t mean patrons are preparing for a mass exodus from the site. Scullion said that after he posted a letter to patrons about the change, one supporter changed their contribution from $5 to $10. “This is nice because if someone does drop out due to the new change his new pledge will help cover that loss.”