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Patreon Fees - A Detailed Look (Patreon)

Published:
2017-12-08 19:43:08
Imported:
2026-06
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Hey there,

If you want an in-depth look at the changes to Patreon's fees, look no further. Elaine Ryan and I talk for 25 minutes about why the changes are happening, who has feelings about it and why Patreon is taking heat over it.

Wow!

#likecommentandsubscribe

-Pete Mohrbacher

Comments

Tale Foundry

Brilliant podcast, really useful input. It's a shame this isn't the way they started the service, but I'm sure people will acclimate over time. For new patrons, this will just be the norm. Hopefully this additional fee will be represented on the interface when patrons make their pledge.

Peter Mohrbacher

I'm also hoping that subscribers see the fees upfront as they make new pledges. If that's the case, this is really going to blend into the background as the new payment schedule rolls out. All subscribers need to be able to easily understand when and how much they are paying.

Nate Bear

In other news, I just listened to this right after a CBC podcast about how company founders are usually not the best at managing their companies.

Aaron Nakahara

The opacity behind the flat rate across all levels is concerning, my personal guess is that it has to do with the recent fundraising they did and what they were telling investors Patreon's market cap was. My understanding is that generally a company's market cap is about 10x-20x it's revenue, Patreon's revenue is around $7.5M yearly but they were touting a $450M market cap, or in other words, they'd have to perform and pull revenue at more than double their current capacity in order to convince investors to join them in their series C fundraising, which they raised over $60M total. So while on the surface them saying that they're looking out for the creators is nice copy, it doesn't *look* like that's the actual reasoning behind the flat fees across all levels.

Kim Myatt

Thank you for the podcast, guys. It really cleared up a lot of things :)

John Idlor

Peter - The main advantage of Patreon was the payment aggregation. The new plan removes the only thing that was better than directly sending money via paypal. The costs are now the same. I dropped my pledge to and several other creators is because of the removal of payment aggregation.

Peter Mohrbacher

I see this theory floating around, and while it looks really smart, it ignores the fact that the new fee structure does line up with the cost of processing the payments. There isn't any room for Patreon to make money off this change, other than by growing the subscriber base for creators by cleaning up their wonky payment system.

Peter Mohrbacher

The payment aggregation seemed like a nice benefit, but the operational costs of it are obnoxiously high for both creators and the platform. Both Patreon and creators have to field constant complaints from subscribers regarding the nuances of the aggregated payment system. Patreon had the choice of confusing people or charging them a little extra. In the end, having a system that clearly explains the way it charges people is probably better than having a confusing system which is slightly cheaper.

Pekka Gaiser

You are assuming a player like Patreon actually pays $.35 per transaction like you and I are. Everyone I've talked to who knows a bit about these things says that's complete nonsense.

Aaron Nakahara

When my family business was being courted to handle credit card transactions directly from Chase I asked them what their charge rate was and they quoted me something like 2.9% + $0.25 per transaction flat rate for both in person and online, but if we hit volume then then % and per charge went down. Volume was something like 100k transactions a month or something. Patreon reported that they have over a million patron transactions per month, so even if they're getting the exact same deal as a small business like mine but with no volume discount they're still pocketing 5%-10% off of this new deal on small value pledges and a majority of pledge support comes in at the small value end, or basically double what their existing revenue model would allow. It just doesn't seem to add up to me and I wish there was more exact disclosure on where the money filters to. Maybe you're right and the fee rate is exactly what you and I would pay a credit card company if we were handling transactions ourselves... but in my experience it shouldn't be that high.

Jonathan Small

super-thank-you for this audio! It's great to have things explained! Also keep making great art.

James Pinkett

it should have stayed with paying the processing fees, or gave us the choice, which might be a nice metric to have. I say choose to support the creators more and stand by them through changes and experiments. That's how we great new stuff to experience.