Mitchell Chapman: A crowdfunding option worth a look
Patreon was founded in 2013, with its focus being on repeat donations through a subscriber model, rather than Kickstarter and GoFundMe, which focus more on one-off donations. Through Patreon, users can become patrons of creators — ranging from artists to YouTubers to business owners — in which they pledge a monthly amount of money in exchange for perks.
Most creators have a tiered system for patrons, i.e. $1 patrons might get a shoutout on social media, or in the credits of the project they're working on; $5 patrons might get access to exclusive content — if you're an artist or a business owner, this might be concept art or product concepts; $10 patrons might get a branded t-shirt or mug; etc. Perks are entirely up to creators to provide and facilitate and because they tend to be products themselves (especially with patrons who donate large amounts), Patreon can be seen as not only a crowdfunding platform, but another way to sell products.
Patreon has become popular among writers, artists and YouTubers, giving popular content creators a way to make a living other than monetizing their content — a business model that was always unstable because of the unpredictable nature of online ad revenue. And it has been used to fund businesses, though the majority of its users remains to be individuals, though that does not change its powerful business potential. It's also an option that many might not be aware of, which is understandable; the platform is four years old.
Much can change quickly
With a platform as new as Patreon, it might be wise to use it with the goal of it creating supplemental income, rather than the majority of what you earn, knowing that online services like this can change at the drop of a hat, and can go away just as quickly as they have emerged (the video-sharing platform Vine is a good example). In fact, Patreon has already changed significantly since it's launch, as it has recently implemented a five percent processing fee for all donations. This has raised some controversy, as Patreon ends up taking more money from small pledges than large ones ($1 pledges have the same rate as, say, $100 pledges). Still, in all cases, the creator takes home 95 percent of every pledge donated to them, and as this policy continues to negatively impact small donations, it is reasonable to expect Patreon will tweak it.
That being said, Patreon has a lot of strengths, the first being that Patreon can help you foster a closer relationship with your supporters than other crowdfunding websites. From a business standpoint, it can also be a way to sell extra inventory for a much higher profit (i.e. a t-shirt someone gets as a $15 perk could probably be bought from the creator directly for less, but rather as a fair exchange, it is seen as an incentive to keep supporting the creator). It can also be used to give inherent value to Patreon-exclusive content, i.e. a t-shirt or mug from a creator you like that you can only get through Patreon has more value than one you can just pick up at the store or order online.
The income potential from the platform is also sizeable, with many creatives using it as their main source of revenue. And unlike investors, creators have 100 percent creative control over the funds they get from Patreon. They can use it to pay their bills, invest in their enterprise or go out to dinner.
The dangers of Patreon are many, and must be considered before opening an account. For one, there is the stigma surrounding crowdfunding. Some see it as online begging, and you might come under fire for using it when traditional means of finding investors are readily available to you. If you plan to use investors, with Patreon supplying supplemental funds, your use of Patreon might even turn some investors away. If you become dependent on Patreon, you put yourself at the mercy of your patrons, who can choose to withdraw their support from you at any time. They pay by the month, and there are no contracts to protect you. Patreon users also risk fund mismanagement, as how to spend the money is all up to them (this is common with crowdfunding platforms in general).
On the patron side, while you are supporting your creators, it is very easy for them to overcharge for perks, and most of the time the best creators can offer you is raw content. Know that you will probably not get a lot of immediate return from your dollar, but you do get the reassurance that you are supporting a creator you love, though you get very little say in what they ultimately do.
Your first and best option to speak out against something a creator is doing is by withdrawing your Patreon subscription. Of course, it's ideal that it would never get to that point, but when you are one of a sea of patrons, your voice can get lost fast.
Mitchell Chapman is an Eagle staffer.
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