Patreon's updated service fee could do more harm than good
It'll be significantly more expensive to support multiple artists with small pledgesBy Shawn Knight 7 comments
Patreon, a platform that makes it easy for people to financially support the artists and creators they love, is making a controversial change to its service fee structure.
Up to this point, a creator's income from Patreon has varied due to monthly processing fees that could account for between seven and 15 percent of their earnings.
Starting later this month, however, Patreon will implement a new service fee of 2.9 percent plus $0.35 per pledge that'll be paid for by patrons. According to Patreon, this means that creators will take home exactly 95 percent of every pledge with no additional fees.
Putting more money in the hands of creators sounds like a great idea but dig a bit deeper and you'll see where this starts to become a problem.
Specifically, creators that rely on multiple small pledges from patrons could be in trouble. Consider this example: pledging $100 to one creator will soon cost $103.25 but if you pledge $1 to 100 creators, it's going to cost you $137.90. Ouch.
Sure, creators are technically netting more money under the new fee structure but if the changes discourage patrons from donating (especially those that like to support multiple artists with small donations), it's going to be a net loss overall for creators.
Patreon said it is notifying patrons about the change so artists won't have to do so via additional communication.
If the hit is as bad as some are predicting and lots of supporters abandon the platform, it's possible that Patreon could tweak the policy or abandon it entirely. For now, however, it appears set to go into effect on December 18.
Lead image via Medium