Changes to Patreon Fee Structure (Patreon)

So by now, I believe all of you should have received an email from Patreon, explaining the Patreon fee structure is changing. This isn't going to be an easy post to write, but I'm going to try to unpick some of this to make everything as clear as I can, as you guys are awesome, and my first priority is to you.

Up to now, what happens is that you guys pledge what you choose, and then Patreon took a small cut out of that to cover its costs - 5% as a minimum, and then a small amount extra to cover credit card fees, currency conversion, whatever else. This meant the exact % of what you guys gave that actually reached me each month varied slightly. But I didn't mind this. It was fine. Every platform as a cost you pay to use it.

Now, all those extra fees beyond the 5% have shuffled over from being taken out of what's paid to me, to being charged directly to you - in the form of a charge of 2.9% of your pledge, plus $0.35 as a flat fee, and then Patreon takes its 5%, leaving exactly 95% of the stated campaign pledges to go to me.

I do not like this change. Because loads of you guys kindly donate $1 to keep us going, and you guys are going to be hit hardest by this as a % increase. This graphic by Ben Wolfe lays out the problem.

From now on, if you donate $1, you're actually charged $1 + $0.35, plus 2.9% of that $1 - a total of $1.38. So we started on a system where you paid $1 and I got somewhere in 85-93% of it (according to Patreon's own figures below), but now a $1 person is paying $1.38, and I'm getting $0.95 - so I'm only getting ~69% of what you're being charged. As I say, the table below lays out what it means for various donation tiers.

And the worst part? That fee is per individual pledge. So if you back 5 people with $1 each, you have to pay $1.38 per each person - in this case turning a monthly donation of $5 into $6.90. You could drop one of the campaigns you were backing, and still be paying out more per month than before.

Again, I don't like this. The whole point of Patreon all along was that people could toss in a little each month, and together, that would add up to an amount that lets creators be supported by their fans. A system that causes a bigger proportional increase to those donating the smallest amounts - and most heavily hitting those who support multiple Patreons - feels utterly backwards.

So why is this happening? After a bit of backlash yesterday, Patreon gave us a more detailed look at their thinking.

In short, their position is that this system was brought in due to the fact they're switching everybody over to an anniversary-payment model, where everybody pays immediately on signing up for the first time, and then again on the anniversary of that date each month. This means payments are no longer batched at the end of the month, generating more fees, and the new fee structure is just to cover those new fees.

As for why they want to switch over to anniversary-payments at all, that was to deal with the issue that Patreons that previously opted to charge the first payment upfront (which we never did), had the issue where a person might join up on the 29th of the month, get charged, and then get charged again at the end of the month.

Patreon apparently considered that a big enough issue that they've made this sweeping change that effects everybody. Again, we never turned on the first-payment-immediately option.

So, in short, our Patreon has this forced on it because Patreon is trying to solve an issue around a rare use-case that never impacted us. We're being hit by a solution to a problem we never had.

There's a load of other confusing things too. Like why would you ever go to a system that causes a massive increase in fees to get pledges in immediately and then dotted through the month thereafter, when those pledges don't even go directly to the creator?

Yep, in case you don't know, pledges go to Patreon, and then get paid to me only when I push the pay-out button in Patreon (each individual thing being paid directly to me immediately would be a logistical and tax nightmare) - so we're now all paying extra so that Patreon can receive the pledges slightly faster. So the only creator that benefits is the one who wants to receive multiple smaller payouts each month. I don't know how many people that is - and neither does Patreon, because up to now, the vast majority of payments have been batched at the end of the month...

And let's not forget that if you start backing multiple Patreons from now on, your payments will be randomly spread through the month too, which doesn't feel like a good experience for backers. Especially as if they were all grouped at the end of the month, then there'd be no need for the extra fees per pledge - you could just pay one fee per month, incentivising people to back more creators. I literally just came up with that idea off the top of my head, and it's better than the current proposed Patreon structure.

Ok, so what's the solution?

It's actually pretty simple. Patreon has publicly stated that the new fee structure is purely to fund additonal payment-fees. 

And the payment fees are only rising due to the anniversary-payments system.

And the anniversary-payments system only solves a problem if you were already wanting to charge people upfront when they sign up.

So our Patreon should be fine if we just keep it exactly as it is. After all, if we're happy to only ever charge people at the end of the month (and we are), then there's no need for anniversary-payments, and no new fees to cover. I have written to Patreon repeatedly pointing this out, and am hoping to make some progress on that in time.

And in the meantime...

I'm speaking to Patreon on a daily basis at the moment. I don't like these changes, and if you don't like them either, then help me to stop them. Email Patreon. Tweet at them. The more pressure we put on them, the more chance we might get them to back down.

But the most important thing

This isn't about me, and it's not about Patreon. This is all about you - a community awesome enough to be willing to help support me so I can make stuff that you love. You're the most important people in the room, and unfortunately, Patreon seems to have forgotten that.

My first priority is - and always will be - to do right by you. That's why I wanted to spell exactly what this means in practical terms.

And if you want to keep supporting me despite these changes - thank you. As always, you're the folks that let me have the security to quit my old job to do this, and have kept me going through the various 2017 adpocalyses and recent demonetisation nonsense - and hopefully you like the Patroncast too.

And if you look at the new higher fees, or back multiple Patreons and can't afford it, or for any reason decide now is the time to stop backing us, I understand, and I hope one day we can welcome you back with open arms.

I am incredibly thankful to those who stick around and help keep us going, and I feel nothing but gratitude to those who have helped us this far, even if you can't do so anymore.

Jon