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On May 7, 2019, we debuted new creator plans. Acquire more now.
Of import Update 12/13/17 | Please run into our most recent update regarding service fees: We messed upward. We're sorry, and we're non rolling out the fees change. We will non exist rolling out the changes equally described below.
In order to continue our mission of funding the creative grade, we're e'er looking for ways we can help creators continue to grow their creative careers. We're committed to building tools that transform communities into thriving, long-term membership businesses. A big piece of that puzzle is predictability and consistency effectually your finances, which is why we're introducing a alter that allows Patreon creators to take home exactly 95% of every pledge, with no additional fees.
Aside from Patreon's existing 5% fee, a creator's income on Patreon often varied from month to calendar month considering of 3rd-party processing fees. And, patrons may not take been aware that creators really take home a lower pct of their intended pledges considering of those fees. Our goal is to make these paychecks as predictable equally possible, so we're restructuring how these fees are paid.
Starting on December 18th, a new service fee of ii.9% + $0.35 volition exist paid by patrons for each individual pledge. (To become into the details, existing per-creation pledges for posts made on/after December. 18th will exist charged the new service fee; existing per-month pledges volition first be charged a service fee on Jan 1.) Streamlining these fees for creators and patrons ensures that creators accept home as much of their earnings every bit possible.
We desire yous to know that we approach every change with a creator-offset mindset, aiming to help creators abound their businesses. In preparation for this change, nosotros ran experiments and months and months of research to understand patrons' potential reactions and we constitute that many patrons were happy knowing that this alter will send more coin to creators. While some patrons may exit in the short-term, we know this will help creators earn more money in the long term.
Every decision we make — including this one — is a function of our goal to help creators establish memberships, earn salaries, and build careers. Standardizing third-party fees in this way helps ensure that creators can continue to get paid making content their fans love. If any patrons have questions, we have a robust Q+A here where they can learn more.
We're building Patreon so that creators can take a stable, long-lasting career. And nosotros're making progress on that: this year lonely, we're on runway to pay $150 million to creators. We can't look to come across what we accomplish together adjacent year.
Sincerely,The Payments Team at Patreon
Update: three:57pm PST
We know creators and patrons desire more information about our fee decision today, then we're going to get 1 level deeper for those interested. Hither is more than about the decision, from our payments product manager.
Today, payments on Patreon are weird. In that location, I've said information technology. Payments are weird. Today, creators can utilize whatsoever one of three dissimilar ways of charging patrons.
Per creation – Y'all, as a creator, tin can charge your patrons for multiple creations per month. These are bundled together and billed on the first 24-hour interval of the post-obit month. (So, all creations made in November are added up together and charged in one parcel on December 1.)
Monthly – You, as a creator, charge your patrons for the previous calendar month's access on the first of each calendar month.
Monthly with accuse up front end – you lot, every bit a creator, charge your patrons as soon as they pledge for immediate access, and charge them on the first of each month thereafter for that calendar month's access. This is, by far, the nearly creator-requested characteristic over the concluding 2 years.
It's a lot to understand — for scale, we receive literally thousands of support tickets (complaints) about payments defoliation every single month. Creators and patrons are confused in our electric current system. Non only that, but if you lot're a creator on the monthly plan without the benefit of accuse up front end, yous are constantly worried that your patrons are going to delete their pledges before they've paid. That'due south why we're hustling to release charge upwards front to every creator, to really make sure yous go paid for your creations up front.
Some creators already have charge upwardly front enabled and, fifty-fifty at its current state, information technology's far from perfect. Example: let'southward say you get a patron of a creator who has charge up front enabled on November 29. You'll be charged the total amount immediately, and and so you lot're kind of double-charged that same amount again on December 1. That's bad. Patrons are surprised by it (and sometimes angry about information technology), and some creators feel the need to refund their patrons because of it. That's obviously non a great, long-term solution!
How on world does this chronicle to the new service fee? We'll get at that place. But first, permit me talk about our plan to accost all of these concerns and all of the confusion effectually payments. Our vision for our payments system is that creators have confidence that their content volition always be paid for, and patrons have accented clarity near how much they volition be charged, and when.
To exercise that, we need all creators to get the benefits of charge up front end.
To do that, we need to eliminate the "double charge" scenario that harms patrons today.
To exercise that, we need to move our payments organisation to care for your pledges like any other subscription service. In other words, we need a arrangement that charges patrons at the time of their initial pledge, and on the anniversary of their pledge each calendar month thereafter.
NOW. Fees.
Historically, Patreon prepare a flat v% fee for our service, with an additional tertiary party processing fee that ranged from 2% – 10%. Some creators were hit by these fees much more than than others, and it wasn't predictable month to month. Right now, we keep those fees as low equally we can by charging patrons once every calendar month across multiple pledges — that'south why all charges come on the first day of the month. But if we move to an anniversary-based subscription model without a revised arrangement, the fees would shoot upwardly for creators.
To drive dwelling how circuitous this system currently is, let's look at a sample patron who pledges to 1 monthly creator, one charge up front monthly creator, and one paid post creator. Today, this 2.5 month bridge results in 3 fees being assessed by third parties:
Looking at that same patron in the new world where all creators accept accuse up front and patrons pay on their pledge anniversary, the exact same pledges result in 8 fees beingness assessed.
That's a lot of fees for creators to pay. We had three options:
- Have creators deal with a huge increase in fees
- Have Patreon swallow the price of the new fees (which is financially incommunicable given our current rate of v%)
- Add a service fee so Patreon can cover the third party fees
To put this into perspective, each month when we send our NPS (customer satisfaction) survey to creators, one of the top negative comments is that fees are too high. In fact, if you look at the NPS score from people who accept mentioned fees in the past year, the score is -twenty. And the most recent 30-day score is even worse: -50.
Here's a sample of the type of pain nosotros hear from creators. These are from NPS reports from this week alone:
"I am in full general very happy with the revenue and number of patrons, but the high fees put a serious dent in the gains. Of $11k, almost $1k goes to fees!"
"Transaction fees besides loftier."
"It's slightly disruptive how much coin you are getting/what is patreon taking."
"Your fees. I become that you take a cutting from creators to keep running, but out of $176 that has been pledged to me, my take home is around £97. That's a ridiculous corporeality of coin lost. Another annotation – your fees modify month to month and have no reasoning as to why information technology differs, then for those who need to tax – information technology becomes incredibly confusing to say the least, and dodgy at most."
That is NOT good, and we didn't desire to make creators trounce out even more money.
So, we chose to pursue option three, and spent well-nigh a year reviewing the numbers and running experiments to make certain the end event was creators either brand more money, or keep their electric current earnings. We actually experimented with three unlike service fee structures, all of which were higher than the 2.9% + $0.35 we selected. As it turns out, patrons weren't nearly every bit sensitive to the amount of the fee as we predicted, but we ultimately chose the lowest service fee that would beginning the third party costs in all probable scenarios.
This was never (and still isn't) nigh making more than money for Patreon as a company. This is a strategic move to make our platform even better for creators and patrons in the time to come. We want a Patreon where all creators receive their coin as soon as a patron pledges. We want a Patreon where your patrons never take to wonder when they'll exist charged, or how much they'll be charged, and this is the first step toward the improvements nosotros're making and then that Patreon becomes a better system for everyone.
Source: https://blog.patreon.com/updating-patreons-fee-structure