The @Patreon changes are well meaning, but this is a case where I suspect some obfuscation is likely the better system.
This raises the patron cost of a $1 pledge to $1.38
This raises the patron cost of a $1 pledge to $1.38
This really only applies to the lowest tiers, but dollar tiers are what allow people to afford to pledge to lots of creators.
I guess the question is: how many people will withdraw some of their pledges if the price goes up to $1.38?
Is it actually better for creators to only get $0.62 on a $1 pledge if it means more patrons?
Is it actually better for creators to only get $0.62 on a $1 pledge if it means more patrons?
A very good point. If it's a single 2.9%+35¢ for all your pledges as a single transaction, it changes the impact dramatically.
If you support 10 people at $1 it's the difference between the price going up to $10.64 (pretty reasonable) vs. $13.79 (would probably drop 3 pledges)
The language
"A new service fee of 2.9% + $0.35 will be paid by patrons for each individual pledge" indicates the latter ($13.79)
"A new service fee of 2.9% + $0.35 will be paid by patrons for each individual pledge" indicates the latter ($13.79)
I really don't have a solid opinion here. Adding transparency and predictability is a good thing, but changes that disproportionately impact $1 subs could have rolling consequences.
Alright, did some math, forgive the kinda-hard-to-read graph, Excel 2011 is ugly AF by default
New system, assuming no one changes their subs, creators make more. It's the "no one changes their subs" in there that's the ? at the moment.
If the creator pays the fees instead of the patron, they make less than the old system for subs $3 and below, and more for subs $9 and above.
Because price wouldn't change on patron side any changes to subs would be for normal reasons.
Because price wouldn't change on patron side any changes to subs would be for normal reasons.
Oh, X is sub-value, Y is creator take-home.
God I hate formatting charts in Excel.
God I hate formatting charts in Excel.
As a broad statement, as long as 80% of subs below $5 are okay with the price change then both Patreon and Creators make more money on a much more stable rubric.
If more than 20% of patrons at tiers $5 and below decide to cancel, everyone makes less than if they left it alone or just took all the fees out of the sub value.
My suspicion is that Patreon's research indicated that even with people withdrawing subs, creators will still make same-or-more due to better margins.
If all of your income is in $1 subs, hopefully 80% of them are cool with paying another 40¢ per month.
Okay, well, here's where Patreon's data comes from: they did a limited rollout back during the summer. myce.com/news/patreon-c…
Also, given that, as many have pointed out, Patreon is charging a per-pledge surcharge, the FAQ is accurate, that these are largely for operating costs and are not simply passing forward the CC fees. patreon.zendesk.com/hc/en-us/artic…
Here's the weird question rolling around in my head. It means that Patreon makes more off the person who subs to lots of people for a little bit, but it also actively disincentivizes that exact behaviour.
Thread paused due to needy, demanding kitty
The more I think about it the more it feels like these numbers were chosen specifically because of their familiarity to disguise a price hike rather than raising the minimum pledge again.
I've reached out to Patreon for comment specifically on how they anticipate this will impact smaller creators who rely on $1 patrons b/c $30/mo. is the difference between real food and Cup O Noodles.
A tale of two charts.
A is the homepage, B is the email.
A is the homepage, B is the email.
No matter how you cut it, no matter what the reality is of how this plays out, "40% increase on $1 subs" is trash for Patreon's optics.
I ran some numbers on some large campaigns and with the change as-is they can afford to lose 100% of their $1 subs and still make more with the new system.
This is bad, because it creates a space where numerical gains are (potentially) taking priority over the "soft" value of having that $1 tier, and the cost of alienating those subs.
Sure, you can, in theory, afford to lose all your $1 subs and still make thousands more than before, but can you afford to lose 1200 fans who were willing to give you money directly?
I hypothesized about this on stream, but it's starting to really feel like Patreon is putting the burden of selling this system onto Creators (not a far reach at all considering they literally sent us sales coaching earlier today)
That... is really not a stress point Patreon wants to create right now.
I think they're assuming that any lost traffic will be overwhelmed by the introduction of the flat 35¢ fee (which stand to make them MAD BUX in the $1-to-a-dozen-people bracket)
I'm figuring you've got three classes of people
• people who stop entirely
• people who don't change anything
• people who condense their existing total into fewer creators
• people who stop entirely
• people who don't change anything
• people who condense their existing total into fewer creators
These are actually pretty bad. Like, sure, it's great for the Green bros. who are going to make bank when people bump up to $10, but that's going to come from 5 $1 pledges those people cancelled.
And even that kind of trading is likely to be less common than people just cancelling the 5 and keeping their $5.
Basically it'll slide further towards concentrating support into already popular channels.
Basically it'll slide further towards concentrating support into already popular channels.
I don't think Patreon appreciates the value of that $1 tier to the overall health of the entire creative ecosystem, and the psychological sense of betrayal from stealthily bumping it to $1.40
God dammit, Dan.
Overnight about 99% of my goodwill wore off.
The change is a cash grab to appease VC investors with channels (the largest of whom stand to pocket an extra couple thousand per month) being expected to do the hard work of selling it to customers.
The change is a cash grab to appease VC investors with channels (the largest of whom stand to pocket an extra couple thousand per month) being expected to do the hard work of selling it to customers.
Email to patrons should be going out later today, as per their email to creators. We'll see if they walk it back at all.
I'm not going to be too surprised if they go "😅 lol, did we say per pledge? We meant per TOTAL pledge 😅" but I'm not counting on it, either.
I would be okay with that change if they did walk that back, because it's the 35¢ surcharge per-creator-you-support that's the cash grab.
To clarify about three tweets up: creators making more, and more predictably, isn't a bad thing, but Patreon is clearly using "creators will be so amped about making more!" to get creators to sell patrons on a huge, pointless price hike, none of which goes to creators.
They restructured their fees to fix a problem (👍) which means creators get a bigger, stable cut (👍) but did it in a way that multi-charges customers for fees Patreon only actually pays once, so they can pocket the difference (👎👎👎)
Highly simplistic model, but Patreon fee-restructuring means they'll be tripling cash flow, making ~$15 for every $100 pledged (up from $5) by just straight up charging an extra $15 for every $100 pledged.
The actual is even more skewed because my simple model has an even distribution, when in reality Greens, Blues, and Oranges are far more common than Reds and Purples.
I can see why Patreon would want to discourage people from pledging less than $4 total, but the per-pledge surcharge is asinine.
Nah, Patreon isn't dodging fees by aggregating any more than the grocery store is by running your entire bill as one instead of item-by-item. Patreon is a store: you buy a bunch of items (pledges) off the shelf, they run your order as one charge.
To pull this part back to the surface, this is the bit that makes me upset: Patreon is relying on the trust relationship between creators and their fans to sell this change.
The email to patrons leans heavy on this "Think of how much more your favs will make! You don't want Hank Green to starve and die, do you?" language.
This is the real mistake on Patreon's part: dollar subs are often the most passionate and vocal. They're the proselytizers. Their energy is worth more than their dollar.
I still have my giant wad of data from last year's Patreon stats analysis, and a recurring theme was that at $10+ people were very distinctly getting *something*. Custom content, special access, merch: not just supporting but buying.
The recurring theme for $1-2?
"Gratitude"
"My eternal thanks"
"A thank you in the credits"
"Gratitude"
"My eternal thanks"
"A thank you in the credits"
An A/B test was run back in June/July/August. B participants weren't exactly thrilled with the changes, based on their public reaction, but the test didn't get much attention at the time.
Only Patreon knows how many B group either didn't notice or didn't care. I doubt any were, you know, hyped.
This and a few forum posts were all I could really find about the test, which wasn't even publicly acknowledged as an A/B test. (repost from upthread) myce.com/news/patreon-c…
Update: they're doing this to de-aggregate payment. Which... is... ugh
I have a lot of thoughts, but The Disaster Artist starts in ten, so I'll try to be quick
1) this still runs havoc on subbing to lots of creators at low tiers
2) it means *exploding* transaction fees
3) the gains of de-aggregating subs is lost on me given that "aggregate and reduce fees" was an upside if the model in the first place
2) it means *exploding* transaction fees
3) the gains of de-aggregating subs is lost on me given that "aggregate and reduce fees" was an upside if the model in the first place
4) I cannot fathom what gains would be worth this damage to either the ecosystem or their PR
5) worse than greed this seems to be driven by madness. The explanations make sense, but they don't *make sense*
5) worse than greed this seems to be driven by madness. The explanations make sense, but they don't *make sense*
And lastly... ohaimark
(back after the movie)
(back after the movie)
Here's what the updated information sounds like to me
"A squirrel mocked us as we walked through the forest. We have lit the trees on fire to deal with it."
It's an out-of-proportion response to the problem it's addressing.
"A squirrel mocked us as we walked through the forest. We have lit the trees on fire to deal with it."
It's an out-of-proportion response to the problem it's addressing.
The *weirdest* moment is when they put this image up and say "look at how simple this will be in the future!"
I'm sorry, but tracking anywhere from 3 to 15 billing cycles isn't a simplification.
I'm sorry, but tracking anywhere from 3 to 15 billing cycles isn't a simplification.
So there's two problems they're talking about here:
1) Billing confusion
2) Pledge dodging
1) Billing confusion
2) Pledge dodging
Let's talk about Pledge dodging first.
It sucks. But it's basically shoplifting, and if you've ever worked in retail before you'll be familiar with the term "shrinkage"
Welcome to running a business.
It sucks. But it's basically shoplifting, and if you've ever worked in retail before you'll be familiar with the term "shrinkage"
Welcome to running a business.
Obviously minimizing shrinkage is a valid concern, but this can be approached from two directions: limiting the viability and limiting the damage.
Charge up front addresses the first, it's a good addition. It's on the creator to deal with the second.
Charge up front addresses the first, it's a good addition. It's on the creator to deal with the second.
Basically the more effort that goes into distributing a reward, the higher the damage. This is why it's a best practice to find rewards that fit into your existing workflow and rewards that are cheap to distribute (i.e. digital goods that cost the same to send to 2000 as to 20)
If you make a desktop background for $15 patrons and someone shoplifts it, well, that sucks, but the material value of the theft is $0 because you already made it for the patrons that did pay.
But this point is basically re-litigating Napster.
But this point is basically re-litigating Napster.
Now Billing confusion.
Woof.
That's the best thing that comes to mind. Woof.
Woof.
That's the best thing that comes to mind. Woof.
If you've ever worked customer service for a company with a billing cycle you already know: this cannot be solved.
Or, rather, it can be, but that solution is you, sitting there, in that seat, talking them through it, getting paid to deal with it.
Or, rather, it can be, but that solution is you, sitting there, in that seat, talking them through it, getting paid to deal with it.
It's my belief that they have traded sideways. They were swamped with one kind of "I don't get why..." call, and now they will be swamped with a different kind of "I don't get why..." call.
Fooooor example
"I don't get why my $1 pledges cost $1.40?!"
"Why do I have so many charges on my card? Can't you just do them all at once so I don't have to pay all these fees?"
"A $1 charge seems like a waste."
"I don't get why my $1 pledges cost $1.40?!"
"Why do I have so many charges on my card? Can't you just do them all at once so I don't have to pay all these fees?"
"A $1 charge seems like a waste."
Their explanation compares the new system to "any other subscription service" but it's not like any other subscription service, because it's segmented into tiny bits (which is the whole point in the first place, it's microfunding).
The comparison would be if you called your cable company and added HBO, and now your normal bill is on the 4th, but you pay for HBO on the 17th.
Or if your phone carrier charged call ID, voicemail, and extra data all on different days of the month based on when you added them.
Or if your phone carrier charged call ID, voicemail, and extra data all on different days of the month based on when you added them.
(The obvious middle ground here is that your billing cycle starts when you first start, i.e. the 7th or 12th or whenever instead of everyone on the 1st, and "added features" are pro-rated to your next bill cycle. It's not simple, but it's fair. Hire humans to explain it.)
^Patreon billing cycle
Just as a note, I want to apologize to any staff at Patreon who may have been offended that I assumed it was a cash grab. That is what the data looked like at the time b/c we didn't yet know you had lost your minds and were going to fracture billing into millions of pieces.
Like, let's spell it out.
They have decided to discourage the selling point of their site, shovel millions into the pockets of credit services, and make their payment system geometrically more complex
so people who start on the 28th don't get charged again on the 1st.
They have decided to discourage the selling point of their site, shovel millions into the pockets of credit services, and make their payment system geometrically more complex
so people who start on the 28th don't get charged again on the 1st.
How to salvage this:
Unified monthly bill that's set when you first start paying; additional products after the first pro-rate and lock to your cycle. Eliminates double billing, blunts the impact of shrinkage, minimizes fees.
Unified monthly bill that's set when you first start paying; additional products after the first pro-rate and lock to your cycle. Eliminates double billing, blunts the impact of shrinkage, minimizes fees.
Yep.
All this to solve a problem with double-billing.
All this to solve a problem with double-billing.
When I learned about it earlier today I said "oh god, it's worse than greed: they're true believers and think they're fixing a problem"
To be clear, they are trying to address real problems, but the solution is not good and the rollout has been, well, this is tweet #80 in this thread.
