The subscription platform Patreon, which allows supporters to make small monthly pledges to independent artists and other content creators, announced this week that it will restructure how it charges for payment processing. The change will shift much of the fee burden from creators to their supporters, but some creators argue the new structure could nonetheless actually hurt them.
Processing fees had previously been taken out of pledge amounts. According to Patreon, that could cost creators as much as 15% of their pledge income, and varied from month to month. The restructuring, which is scheduled to go live on December 18th, will instead require those making monthly pledges to pay an additional 2.9% of their pledge, plus a flat fee of $0.35. Patreon says the change should make creators’ incomes more predictable.
But some creators have objected, arguing that the transition will scare off supporters making smaller pledges. Many patrons on the site pledge as little as $1 a month to multiple creators, and there’s concern that the flat per-pledge fee will lead to some supporters pledging larger amounts to fewer creators, or simply canceling their pledges.
The Verge has spotted several prominent creators complaining about the changes, and even posting lists of small-dollar donors who had canceled their pledges in advance of the fee changes.
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Writer Natalie Luhrs was among those who raised concerns about the changes. In her in-depth analysis of the changes, Luhrs argues that the new structure “is designed to put significantly more cash into Patreon’s pockets as well as the creators’,” and is “intended to destroy the viability of the sub-$5 per month tiers.”
In response to the backlash, Patreon has argued that the new fee structure is crucial to streamlining their overall payment system. Among the needed reforms, Patreon says the fee change will let it charge patrons on a rolling basis, instead of at the same time for every subscriber each month. Patreon also says it experimented with even higher fees, and that “patrons weren’t nearly as sensitive to the amount of the fee as we predicted.”
Backlash to the change comes, it should be noted, after Patreon has earned a lot of goodwill from content creators including illustrators, podcasters, musicians, and writers. The site, in some ways comparable to Kickstarter, makes it easier for niche producers to monetize digital content, with just a few thousand subscribers adding up to revenues of $20,000 per month or more for top creators.
The site is on track to distribute $150 million to creators in 2017, and recently raised a $60 million funding round at a valuation of roughly $450 million.
