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It is incredibly frustrating that the only thing more stupid than Patreon is all the alleged Patreon substitutes that clearly don't even understand what Patreon does.
Pro tip: Patreon has no meaningful competitors, and also it sucks, so there's a huge opportunity for somebody to kick sand in its face and take its lunch money. But to do that you would have to understand what actually Patreon does that is worth it to creators to allow Patreon to take 5% of their proceeds (and then pass on to them a second 5% in payment processing fees).
Because I want there to be Patreon competitors, I will explain what Patreon actually does, so if somebody would like to actually compete with Patreon they will know what they have to actually accomplish.
Brace yourself. Some of this is a little complicated to explain.
And before explaining it, allow me to observe: these are the sorts of features you get when somebody who actually really understands the usage case designs the platform. Patreon was founded by and designed by an actual goddamn artist, a musician and music video maker, who understood what artists and other creators actually need out of a platform.
1) Pseudonym support.
Attention dumbasses: stage names and pen names have been realities of the business of being an artist for over 2,000 years.
Creators are not shoe salesmen.
The most basic functionality of any platform that intends to support *creators* earning money online – the basic, rock-bottom, sine qua non affordance – is people doing business using pseudonyms.
What that ACTUALLY means is the platform has to allow creators (the people who charge money) to be PSEUDONYMOUS (to use their stage name or pen names) in all of their interactions with their patrons (the people paying the money), AND the platform, which is legally required to know the legal identity of the creator and have on file their relevant tax ID numbers (e.g. SSN in the US), needs to keep that legal identity CONFIDENTIAL.
Relatedly, it is not enough for your creator patronization platform to HAVE fully supported pseudonyms. You must make that abundantly specific and clear, and a commitment that you make to your creators, UP FRONT. Ideally, it's part of your elevator pitch.
Patreon falls short of the standard but comes closer than any other payment accepting platform – as far as I know *at all*, of *any* type.
If you want to pull business away from Patreon, you will not do it if your platform, like umpteen zillion other idiot platforms, assumes that the creator is going to use their wallet name, and does not treat that wallet name as confidential information.
Listen, if all we wanted was a subscription platform that exposed our wallet names, we could have been using PayPal subscriptions all this time. What would we need you for?
Speaking of subscriptions:
2) By-works funding model support.
Patreon had two foundational funding models it supported, and while Patreon has introduced a variety of complexities and alternatives, these remain its core offerings.
One of these is trivial: monthly subscriptions. Like I said, creators can get that from PayPal if they don't care about pseudonyms. Every supposed Patreon substitute is just a monthly subscription service.
But Patreon's much more interesting funding model is not by-month, it's by-work.
This is where things get very hard for outsiders to understand. For emotional reasons.
People have trouble believing that this is actually so, but it is. This is the funding model I use.
The by-work funding model is where patrons pledge their support not by the month, but by the instance of whatever it is that the creator makes. If the creator makes stories, it's per story; if the creator makes music videos, it's per music video. The patrons pledge a certain amount of money for each work the creator makes.
If you're thinking, "but how many works does a creator ship each month?": no, that's the whole point of by-works. It can be ANY number. The creator makes no particular commitment to their patrons as to how many creations they're going to ship. They may ship NO creations in a month, so in that month their patrons are charged nothing. Or they may ship one thing. Or 10 things. Or a 100 things.
(My best month was 10 things.)
You might reasonably be thinking, "migod, what protects patrons from getting socked with an enormous bill because a creator ships many more things then they expected?"
Yeah, Patreon has a solution for that too: patrons can set a monthly upper limit for how much they're willing to support a given creator. If the creator exceeds that limit, that's fine, that patron is not charged in excess of that amount.
(Personally, I warn all of my patrons to set that limit, because every once in a while I go off on a productivity tear.)
This is where things get challenging. If you imagine this system, if you try to walk through in your mind how this would work, it will probably occur to you to ask the question, "Okay, but... How does the system know that you shipped something?"
Yeah about that. I log into Patreon, and I basically make a little blog post that says "Look! I made the thing you pledged to pay me for!" with the associated ticky box for "Pay me for this" ticked, and click submit.
That's it.
Patreon and no way, shape, or form attempts to validate that I actually shipped the thing. That is between me and my patrons. And, personally, I'm smart enough not to use Patreon as my delivery mechanism, so delivery of what I am paid for happens through a completely other channel.
There will be more on that subsequently (probably item three on this list of Patreon competition sine qua nons).
So you might be wondering, "but that's basically just a 'pay me' button, more or less directly connected to the patrons' credit cards!"
Yes. Precisely. I mean, it doesn't charge them until the end of the month, but yes.
"But what's to keep a creator from just hammering the 'pay me' button?"
Nothing. Nothing at all.
Like I said previously, individual patrons can set their own monthly maximums. But really the only thing that prohibits the creator from doing that is that it will piss off their patrons, and if the patrons don't feel that they're getting their money's worth, they can cancel their patronage. Which they will do.
And that's totally sufficient.
It helps to get over the emotional hump if you realize that it's not actually any different than invoicing somebody through PayPal. If somebody hires you to landscape their yard, and you send them an itemized invoice through PayPal's invoice system, PayPal isn't going to check to make sure that you actually edged the lawn and planted the begonias like agreed.
To my knowledge – and, BOY, would I like to be wrong about this – there is not a single other platform in the world that supports the by-works model that Patreon offers.
To be crystal clear, it entails:
• Patrons pledge to pay $n per work, on an ongoing basis, in advance of the work being done.
• The creator then generates works on an ad hoc basis, not to any set schedule, and each time they do, they check in with the UI to bill their patrons.
• The platform aggregates these bills, and submits them to the patrons' credit cards monthly.
Part of the reason this is hard to understand is that people who are not creators (and even some who are) think of what Patreon affords as "selling stuff". Which is incorrect.
There are two problems with the selling stuff paradigm: the selling and the stuff.
First and foremost, Patreon does not require you to sell anything. I mean, you can use it for that. Lots of creators do.
I don't.
I use Patreon for patronage instead. Kind of like it says on the tin.
So this is the next item on the list.
3) Non quid pro quo patronage
Patreon is not a platform for selling things, even though you can use it that way, and Patreon seems to prefer it be used that way.
But Patreon can also be used to collect support that is not tied to directly providing the person who pays the money with something just for themselves.
There is an entire little universe of people using Patreon to be funded to do good works in the world. These may be open source contributors. They may be activists. They may be journalists or bloggers. They do not make things that they exchange for money with the people who pledge them on Patreon.
Their patrons do not pay these creators to give things *to them*. Their patrons pay these creators to give things *to the world*: to release code for anyone to use, to engage in activism that changes the world for the better, or to write things that anyone can read.
I'm one of them. The number one reason I signed up for Patreon as my funding platform 9 years ago, was because it was literally the only way of funding my writing that did not entail my SELLING it: my withholding it only for those people who paid me for it.
People get confused here. I'm not talking about my intellectual property rights. I'm not worried somebody is going to steal my copyright in my writing. (I mean it's a legitimate concern but that's not what I'm talking about here.)
I'm talking about the very basic nature of what it means to sell a work of writing, as a book or a magazine or a stand-alone article in a PDF.
If I put my writing into documents that then I sell on Amazon or Kajabi, then the only people who get to see it are the people who pay me for them.
That is the antithesis of what I want to do. What I want to do is write openly on the internet where anyone can read what I write. Where what I write can be cited by anyone who wants to refer to it in any internet discussion.
The audience of my writing is not my patrons, and it is not just the people who pay me for it. It's the whole world.
And that, quite explicitly, is what my patrons pay me to do.
Most would-be competitors to Patreon think it's some sort of DRM system. There are definitely people who try to use Patreon that way, and it works about as well as any DRM system does.
We have lots of other "pay us to access this document" platforms, starting with the 800 lb gorilla, Amazon. If you think there is some benefit to wedding a membership system to a document storefront, I think you're probably wrong. I could be convinced otherwise – since I'm not actually in that business, I assume there's a lot I don't know about it – but my guess is having to join a club just for the privilege of buying a PDF introduces friction that reduces revenue. Heaven knows I resent it as a customer.
(All that said, I also absolutely someday intend to write books that I will sell for money. But that is a very different project.)
And this brings us to number four:
4) An audience relationship management system, ideally one with an API one can build against
Here's where you can really kick Patreon's ass in the market for alternatives, because Patreon's game has been slipping very badly in this area.
I just invented the term "audience relationship management" system, by analogy to "customer relationship management" system. Like I said patrons are not the same thing as customers. But if you're a creator you do need to keep track of them, and you do need to keep track of their payments, and you do need to be able to communicate with them.
Also you would probably like to be able to tell what's going on with your money: with the amounts pledged, the amounts received, the fees deducted, the credit cards declined, stuff like that. You might also appreciate some analytics.
Patreon's infrastructure for doing all of this is kind of falling apart. In some places they've just taken things down rather than fix bugs.
The really big example of this, I'm not wholly familiar with, because I don't really use it, and I was hearing about it and its problems from other people on the creator forums that then patreon took down.
I'm talking about Patreon's API.
So here's what I think I know, and my information is kind of old, and the pandemic happened, and I wasn't directly involved myself, so I might be misremembering.
But as I understand it it goes something like this:
Patreon has the affordance of allowing creators to establish "tiers", where the creator associates certain dollar amounts of pledges with certain package deals they put together. Patreon has – had – has – an API that creators can have their own software query, so that the creator's other systems can tell in real time whether one of their users is a paid up patron over on Patreon, and if so at what tier level.
So for instance, if you (a creator) wanted to run a private discussion forum on the web somewhere just for your patrons, and you're willing to do some programming, you could implement a system whereby your discussion forum software checked in with Patreon.com when someone logged in, comparing their email address with the one on file for patrons, to see whether or not they should be let in in the first place, and if so which forum features they should have access to, based on their tier.
Well, you could.
They were creators whose entire business models were based on this. I gather there were also a third party integrations, companies that actually developed against the Patreon API so that their own services could be integrated with creators' campaigns on Patreon – that is to say there were companies that made products that they sold to creators, that relied on the API.
Well Patreon decided that they're not supporting the API anymore. Apparently, from the screaming on the (now long defunct) creator forums, for a while there it looked like Patreon was going to turn it off. The Patreon walked that back and said that they wouldn't turn the API off, but they wouldn't be supporting it anymore, and they wouldn't be doing any further development on it.
So in a really important sense, these creators (and these companies that had third party integrations) were (are) using Patreon.com as an identity server. But not just an identity server. It doesn't just serve the identity of patrons, but their status as patrons. That's part of what makes it "audience relationship management".
If your supposed Patreon competitor does not support doing that, well, you're certainly not going to seduce all of the creators clinging to the sinking wreck of Patreon's API into abandoning ship on your account, are you?
Patreon also has removed key functionality from within the web interface that creators used to tell what's going on – particularly if their campaign is by-works, as discussed previously.
More generally, Patreon's UI for creators is really kind of terrible. I could itemize why but we'd be here for a while. A company could go far that offered the same services as Patreon, but let creators actually see what was happening to their money.
For instance, the creator UI used to have a page that listed all of the works a by-works creator had submitted, that listed, *for each work*, how much money was pledged in the first place, how much revenue was actually collected (declined credit card charges are a thing), how much Patreon's cut was, how much Patreon took out to pass on to the payment processor, and how much you, the creator, would actually net.
They took that away.
So there you go: four crucial aspects of what Patreon is ACTUALLY up to – what its value proposition is to the creators that choose to use it – that you're not going to be able to compete with Patreon unless you implement, and ideally improve upon.
Edit: turns out I wasn't done, there's a number 5: https://universeodon.com/@siderea/111124515211951131
P.S. I would be remiss if I didn't also mention a fifth thing that Patreon did which was part of its secret sauce, the feature nobody realized Patreon was giving us until they tried to take it away and broke everything: charge bundling.
In December 2017, Patreon announced that they were changing the rules of the game, in a way they tried to pass off as advantageous to creators, but was something very else under the hood. What that was, well, nobody's quite sure because of how much lying Patreon did and because of how they swore parties they told things to to secrecy.
What Patreon had been doing up to that point was if a patron pledged more than one creator, then Patreon would submit a single charge to the payment processor for the total amount that patron owed all of the creators they had pledged for that month.
What they proposed to do instead was run a charge for each creator a patron supported. A patron who pledged three creators would be charged three times in a month.
That doesn't sound like a big deal, but it is. Because the fee structure of the payment processors includes, in addition to a percentage rate, a per transaction flat fee of $0.30.
And because the average patron pledge across Patreon is less than $2.
So where previously a patron who pledged three creators each a dollar a month would have had a total of 39 cents deducted in payment processor fees, leaving the creators to split $2.61 three ways, under the new system there would be a total of 99 cents deducted, leaving the creators to split $2.01 three ways.
Put another way, for a patron who supports three creators each for a dollar, the payment processing fee is 13%. Patreon was proposing making it 33%.
Only, no, what they actually proposed to do was even worse than that.
Patreon tried to play a shell game with how fees were charged. The system they had deducted fees out of whatever patrons pledged, as I described in the above example: if a patron pledges a dollar, the payment processor fee would be deducted from that dollar, along with Patreon own fee, with the creator receiving the difference.
In addition to unbundling the charges, such that there would be dramatically higher payment processor fees, Patreon explains that their plan was not to deduct it from what was pledged, but to add it. No longer would the amount that a patron pledged be the amount that their credit card would be charged. The amount a patron will be charged would be the amount they pledged plus the payment processor fee. If you pledged a dollar, you would be charged a $1.33 – the dollar you pledged plus 2.9% (3¢) plus the 30¢ flat fee.
The internet, understandably, lost its goddamn mind.
Now, Patreon did back down – temporarily. They ultimately grandfathered all of the extant creators as continuing to enjoy payment bundling, but I understand that after a certain flag day, new creator accounts work in the new unbundled way they wanted to roll out all along.
But the important thing to realize here, as a whole lot of us suddenly realized back in 2017, was that the numbers didn't work without bundling.
@siderea This is an epic post, well written with excellent points - it's quite informative to get an inside view of how Patreon has been treating its content creators, and where you feel it's failed. The shortform Mastodon format doesn't do your work justice. Have you posted it other spots in its entirety yet? I'd like to see it posted it as a thread on the @13thFloor - I think it brings up great discussion points for content creators everywhere.
@Arotrios I figured I'd probably be throwing it up as a post on my journal. Don't know I'll get that done tonight, but probably soon. I'll come back and link you when I have.
@Arotrios Aaand we're live. I've made it a blog post, and expanded it further. Enjoy!
"How to Compete with Patreon"
https://siderea.dreamwidth.org/1824441.html
@malin Here ya go, and I've expanded it further:
"How to Compete with Patreon"
https://siderea.dreamwidth.org/1824441.html
@siderea great rundown.
I don't know if I should be more impressed or horrified at someone tyoing that on a phone.
@malin Oh, I didn't type it. This is what speech to text is for.
Though, given how poorly speech to text works, yeah, there was a lot of typing involved.
So I'm in the process of developing a repetitive strain injury in my *larynx*.
@siderea great thread, thanks for taking the time to do it!
@siderea
This is blistering.
I'll just add -- as someone who does not use Patreon as by-work but as "monthly recurring charge", which you characterize as the easy part, that anyone else could do -- well, they are remarkably bad at that as well. Finding out which of my patrons are currently paid up? Rocket science. Actually charging my signed-up patrons, every month, even if there was a network error? Rocket science.
They had ONE JOB, and then they got VC money, and now they and we are fucked.
@siderea
I can already see Visa et al screaming at them for this one. They'll take away a business's privilege to accept credit cards for adding a surcharge for processing fees.
Wow, that's a really clear and concise explanation of #Patreon especially the "by work" part of it which I know some people are unaware of.
I know they sacked a large number of their security staff last year. But then it went quiet. Anything popped up with that?
@siderea The SecondLife Marketplace does this for people who offer stuff/services within the SecondLife world. Good analytics are provided on views/sales/search terms etc. of every *work* you offer. The catch is, your offerings are only deliverable in-world #SecondLife AFIK. Now, you have me wondering about RL delivery.
@siderea
This is a really salient point. A lot of creators have outside Discords and such and I'd expect Patreon to just build out first class integrations for those use cases...
@siderea
Patreon does tie access to certain members-only podcast feeds to payment
@siderea
That's not necessarily true. We have libraries...
@siderea This is basically what I use patreon for but until this thread it never dawned on me that you could do that as the entire business model. The whole thread was fascinating to read and has given me a lot to think about.
If I can actually manage to stay focused long enough to get something off the ground, would you mind helping alpha test it?
@baishen I'm honored to be asked, but I'm afraid I can make no commitments to helping with anybody's projects right now.