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posted by martyb on Saturday December 09 2017, @06:25PM   Printer-friendly
from the "cut"-it-out! dept.

Patreon, a platform that allows "patrons" to give money to directly to artists and other content creators, is adding a processing fee to what patrons pledge, which could drive users away:

Patreon is defending a new payment structure that critics say hurts smaller artists. The change, which goes into effect on December 18th, adds a processing fee to each individual patron pledge, instead of taking the cut out of creators' total earnings. Because this fee includes a flat 35-cent charge on top of a percentage, it disproportionately affects people making small pledges, or pledging to multiple artists. Artists have complained that they're losing patrons after the announcement — but Patreon says it's an inevitable consequence of some other changes to the platform.

Patreon initially said that this fee made artists' earnings more predictable, because they'd only have to worry about a single 5 percent cut taken by Patreon. In an update, however, the company said that's not all that's going on. It's apparently linked to a minor-seeming change in when Patreon processes pledges.

Previously, Patreon charged for most pledges at the start of the month, but also let artists charge first-time backers as soon as they pledged. People seemed to be "double-charged" if they signed up toward the end of a month, so Patreon switched to charging them at the monthly anniversary of their initial pledge. Patreon says that means that more individual transactions are being processed, which jacks up credit card fees. (To make things even more complicated, some people pledge per-video or per-post, adding more rounds of payments.) So rather than dramatically cutting how much money creators get, it's passing that fee to backers.

[...] Some critics have characterized this as a deliberately exploitative or bad-faith move from Patreon; a widely cited thread by author Chris Buecheler suggests that the platform is under pressure from investors. But Patreon has also simply spent a long time struggling with its payment system. It introduced upfront payments — the source of the "double-charging" issue — because artists complained that patrons would sign up for perks and cancel before their first payment. Now, it's apparently trying to solve a problem with that system, and creating another issue in the process.

One of the common solutions for someone getting demonetized on YouTube? Start a Patreon.

Also at Engadget and Polygon.


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  • (Score: 0) by Anonymous Coward on Saturday December 09 2017, @08:27PM (1 child)

    by Anonymous Coward on Saturday December 09 2017, @08:27PM (#607776)

    MakerSupport [makersupport.com]
    Hatreon [hatreon.net]

    • (Score: 0) by Anonymous Coward on Saturday December 09 2017, @08:41PM

      by Anonymous Coward on Saturday December 09 2017, @08:41PM (#607779)

      Also Liberapay [liberapay.com]

  • (Score: 5, Informative) by edIII on Saturday December 09 2017, @08:34PM (12 children)

    by edIII (791) on Saturday December 09 2017, @08:34PM (#607777)

    I got the email from them explaining what was going on. I'm not having such a problem with it since I'm familiar with the difficulties of payment processing. They've got a difficult system going on and they've got to streamline it. 35c isn't a huge amount, or unreasonable, and 2.9% is basically industry standard. With small payments though, I can see the inefficiency of such a model. For their sake I would suggest a bit bucket. I'll pay $20 to Patreon, they get their fees, and then the rest is converted to micro transactions. You can still pay for video per-video, or just pay for whole articles, or whatever.

    I don't have a problem with either supporting the artists or Patreon themselves. Willing to give them a chance at least. I only spend $10 a month with them.

    Here's their words about it:

    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

    The bold (emphasis mine) seems to be a good goal and a decent reason to change the payment structure. I'm willing to give them a chance to figure out their model in the meantime. 35c, which is now paid by me, is worth what Patreon is doing.

    --
    Technically, lunchtime is at any moment. It's just a wave function.
    • (Score: 2) by takyon on Saturday December 09 2017, @09:00PM (2 children)

      by takyon (881) <reversethis-{gro ... s} {ta} {noykat}> on Saturday December 09 2017, @09:00PM (#607787) Journal

      What if you could just have Patreon hold some sum of money for you, such as $100, out of which you can do the $1/etc. pledges. One processing fee for whatever you added.

      --
      [SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
      • (Score: 3, Interesting) by edIII on Saturday December 09 2017, @10:06PM

        by edIII (791) on Saturday December 09 2017, @10:06PM (#607815)

        That's what I meant by the bit bucket. I have several VOIP accounts and get charged in tiny portions of a penny. You pay $100 to them and you get $100.000000 in credits. All the services pull off your credits, and in the case of VMs, on a per second basis. I have a large amount of charges that never reach a penny.

        35c one time on $100 is much less of a hassle. If Patreon went credit based like this it would be so much easier and painless to transfer the credits around. Payments to creators can be in full, minus all of the processing fees since I absorbed those up front. Meaning a $100 payment only results in $96.75 in credits.

        --
        Technically, lunchtime is at any moment. It's just a wave function.
      • (Score: 2) by deimtee on Sunday December 10 2017, @12:31PM

        by deimtee (3272) on Sunday December 10 2017, @12:31PM (#607977) Journal

        They should be able to do this at effectively zero fees. After all they will be holding a large but predictably fluctuating amount of cash, sticking it in the short term money market should be enough to cover their costs and still provide a profit.

        --
        If you cough while drinking cheap red wine it really cleans out your sinuses.
    • (Score: 0) by Anonymous Coward on Saturday December 09 2017, @09:29PM (1 child)

      by Anonymous Coward on Saturday December 09 2017, @09:29PM (#607802)

      They are essentially making two major changes, fees are exclusive, rather than inclusive and are now done on each rather than collectively.

      Using you as an example, how many people do you support? If it is only one, instead of a $10 ding to your account, you are now paying $0.64 on top, for a total of $10.64; however, if you do 5, you are now paying $2.04 on top and being charged $12.04; or 10, it is $3.79 or $13.79 total. If you switch the processing fee to inclusive to keep your total expenditure at $10, it is a $9.38 for split 1 way, $8.02 split 5 ways ($1.60), and $6.32 for a 10-way split ($0.63).

      • (Score: 3, Interesting) by frojack on Saturday December 09 2017, @10:34PM

        by frojack (1554) on Saturday December 09 2017, @10:34PM (#607820) Journal

        They need a better/cheaper way to transfer money to the artists.
        Google wallet was great for this, then it died. There are perhaps some other methods that don't charge such high percentages.

        Fees are simply too high. Mostly because they rely on credit card companies to clear these transactions.

        Micro payments seem to be the best way to go here. The problem is none have emerged as an industry leader, and their transaction costs are still too high.
        http://mediashift.org/2016/08/micropayments-finally-ready-save-journalism/ [mediashift.org]
        https://www.cminds.com/wordpress-plugins-library/micropayments/ [cminds.com]

        Whoever does is probably going to have to issue (digital) W2s or equivalent in many different countries, but at least the transfer inbound to the platform is the only part likely to incur an external transaction cost. The outbound to the artists/writers could be by a membership fee or sliding scale so that little guys could get started for very little, and the fee could be per withdrawal, with the platform earning investment revenue in the meantime.

        Its all computer work. It costs essentially nothing for the next transaction.

        --
        No, you are mistaken. I've always had this sig.
    • (Score: 5, Insightful) by epitaxial on Saturday December 09 2017, @10:52PM (4 children)

      by epitaxial (3165) on Saturday December 09 2017, @10:52PM (#607824)

      Right now Patreon bills you once a month for all your pledges. Say you pledged $1 for someone who made 10 videos that month. Now Patreon tacks on a processing fee to EACH $1 pledge. So now you're paying that fee ten times. In my example its 37 cents for every $1. So besides your $10 pledges you're now going to back an additional $3.70 for a total of $13.70. Pure cash grab from Patreon.

      • (Score: 0) by Anonymous Coward on Sunday December 10 2017, @12:27AM

        by Anonymous Coward on Sunday December 10 2017, @12:27AM (#607846)

        Yes, I thought this was bizarre. I had thought Patreon had ended the per-work contributions for per-period, at least all of mine are monthly. I will be somewhat annoyed if they tack on fees to each transaction rather than doing it as a lump sum, though I suppose we are also covering the payout end too. Does anybody know how you actually get money out of Patreon? Do they just deposit it in a linked bank account or something?

      • (Score: 0) by Anonymous Coward on Sunday December 10 2017, @01:06AM (2 children)

        by Anonymous Coward on Sunday December 10 2017, @01:06AM (#607854)

        Beggars can't be choosers.

    • (Score: 2) by TheRaven on Sunday December 10 2017, @02:21PM

      by TheRaven (270) on Sunday December 10 2017, @02:21PM (#607994) Journal

      The entire point of Patreon is that you make a single transaction to pay them, and then the fee processing is split between all of the people that you support. If you decide to spend $10/month supporting independent creators then the credit card processing is going to be on the order of 50¢/month, leaving you with $9.50 that can be split between a dozen individuals. If a thousand people do that, then that gives each one a few hundred dollars each that they can withdraw in a single transaction.

      With these changes, Patreon's fees are similar to those of something like PayPal or other credit card processors and there's little reason to bother with them as an intermediary. You may as well just set up recurring PayPal donations.

      --
      sudo mod me up
    • (Score: 2) by urza9814 on Monday December 11 2017, @06:02PM

      by urza9814 (3954) on Monday December 11 2017, @06:02PM (#608354) Journal

      I got the email from them explaining what was going on. I'm not having such a problem with it since I'm familiar with the difficulties of payment processing. They've got a difficult system going on and they've got to streamline it. 35c isn't a huge amount, or unreasonable, and 2.9% is basically industry standard.

      Yup, fully agreed. IMO this is what Patreon *should have done from the start*. This isn't Amazon.com, you aren't comparison shopping for the best price on some product...it's about contributing to support some artist or project you love. It's a money transfer system, not a storefront. If I went to Western Union and asked to send a $200 transfer, and when it got there it was $189.60 because they pulled their fees from the transfer, I'd be pretty pissed off. The fees are supposed to be charged separately so you can know how much the person on the other end is actually getting.

      Previously, Patreon charged for most pledges at the start of the month, but also let artists charge first-time backers as soon as they pledged. People seemed to be "double-charged" if they signed up toward the end of a month, so Patreon switched to charging them at the monthly anniversary of their initial pledge.

      Interestingly, that part I didn't know about, it doesn't seem like Patreon actually communicated that anywhere. And that kinda defeats the entire purpose of the site, doesn't it? The point I thought was that I could line up a bunch of small pledges, and Patreon would bill me once and distribute it accordingly. If they're now going to billing me some random amount on random days every month that's a pretty big problem IMO. And if they're going to go that route they *definitely* need to come up with an alternative to continue to allow fixed monthly billing.

  • (Score: 2) by drussell on Sunday December 10 2017, @03:38AM (1 child)

    by drussell (2678) on Sunday December 10 2017, @03:38AM (#607886) Journal
    • (Score: 0) by Anonymous Coward on Sunday December 10 2017, @05:10PM

      by Anonymous Coward on Sunday December 10 2017, @05:10PM (#608014)

      I agree with him that there is some buyout/merger coming. After discussing it with a friend, I've been convinced that it is Vidme. The natural extension of the Patreon model, and one they have partly experimented with, is to bring the actual content creators even deeper into their ecosystem. Since most creators are doing video, that means doing better at video. They've bought one company that does real-time streams, so why not one of the bigger "YouTube alternative" in a acquihire?

  • (Score: 3, Interesting) by deimios on Sunday December 10 2017, @05:05AM

    by deimios (201) Subscriber Badge on Sunday December 10 2017, @05:05AM (#607903) Journal

    FFS the game industry has this down to an art. What we're talking about is microtransactions. Know why games use made up currency that you buy in bulk? Because of transaction fees (and to mask the real value of items but that's another story).

    So you want predictable payouts? How about buying 100 patreon bucks for $10 that you can pledge however and whenever you want. Once you run out of patreon bucks just charge the card for another $10 if you have permission.

    Bundling of expensive micro operations isn't new in any field.

    Yes I had several $1 pledges on Patreon and yes I cancelled all of them. I now support only 1 patron with $10 until Patreon gets their shit together. This isn't rocket surgery, even twitch.tv is doing it.

  • (Score: 0, Troll) by lx on Sunday December 10 2017, @07:15AM (6 children)

    by lx (1915) on Sunday December 10 2017, @07:15AM (#607921)

    "One of the common solutions for someone getting demonetized on YouTube? Start a Patreon."

    Even better solution: Get a real job.

    • (Score: 1, Insightful) by Anonymous Coward on Sunday December 10 2017, @04:29PM (3 children)

      by Anonymous Coward on Sunday December 10 2017, @04:29PM (#608006)

      What is a "real job"? If they can make money by creating Youtube videos, what is wrong with that? Why is being a fry cook at Mcdonald's more "real"? Oh, I see: If your job doesn't involve you being abused by a corporations to the point where you want to commit suicide, then it isn't "real".

      • (Score: 0) by Anonymous Coward on Sunday December 10 2017, @05:53PM (1 child)

        by Anonymous Coward on Sunday December 10 2017, @05:53PM (#608022)

        Stop being such a princess. Learn a trade. The world will always need plumbers.

        • (Score: 0) by Anonymous Coward on Sunday December 10 2017, @08:42PM

          by Anonymous Coward on Sunday December 10 2017, @08:42PM (#608049)

          Well, if someone can get away from having to do monotonous jobs in order to make money, then shouldn't that be a good thing? What is with this attitude? If you like being a plumber, then be a plumber, but you don't need to ostracize people who make money in other ways.

          Also, the "real jobs" thing is just a blatant No True Scotsman fallacy anyway, so I'm not even sure why people make the argument.

      • (Score: 0) by Anonymous Coward on Monday December 11 2017, @06:19PM

        by Anonymous Coward on Monday December 11 2017, @06:19PM (#608362)

        your definition seems contradictory: these people are being abused by youtube, patreon, or other corporations...

    • (Score: 0) by Anonymous Coward on Monday December 11 2017, @05:41AM

      by Anonymous Coward on Monday December 11 2017, @05:41AM (#608205)

      Do you not consider what Tarn Adams does a "real job"?

    • (Score: 2) by Freeman on Monday December 11 2017, @06:11PM

      by Freeman (732) on Monday December 11 2017, @06:11PM (#608358) Journal

      Like these guys: (Kiddo loves this channel.)
      https://www.youtube.com/user/BreakingTrail [youtube.com]

      Or these guys: (Wife loves this channel.)
      https://www.youtube.com/user/thepianoguys [youtube.com]

      **Doesn't subscribe to any TV pacakge.
      * Unless you count Netflix.
      ******** Which is So Much Cheaper than any TV package I've ever seen.

      --
      Joshua 1:9 "Be strong and of a good courage; be not afraid, neither be thou dismayed: for the Lord thy God is with thee"
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