Patreon changes how fees work starting Dec. 18 -- cost increase - Sensationalist Headlines

Thought I'd post this in case it affects anyone. Apparently donators spend more to cover third party fees which took away from creators, while Patreon gets the same profit. [t]https://blog.patreon.com/wp-content/uploads/2017/12/patronpayfees-graphic-v5-1-1024x785.jpg[/t] [url]https://blog.patreon.com/updating-patreons-fee-structure/[/url] [QUOTE]In order to continue our mission of funding the creative class, we’re always 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 large piece of that puzzle is predictability and consistency around your finances, which is why we’re introducing a change 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 month because of third-party processing fees. And, patrons may not have been aware that creators actually take home a lower percentage of their intended pledges because of those fees. Our goal is to make these paychecks as predictable as possible, so we’re restructuring how these fees are paid. Starting on December 18th, a new service fee of 2.9% + $0.35 will be paid by patrons for each individual pledge. (To get into the details, existing per-creation pledges for posts made on/after Dec. 18th will be charged the new service fee; existing per-month pledges will first be charged a service fee on January 1.) Streamlining these fees for creators and patrons ensures that creators take home as much of their earnings as possible.[/QUOTE] (more in source)

[quote]Starting on December 18th, a new service fee of 2.9% + $0.35 will be paid by patrons for each individual pledge. (To get into the details, existing per-creation pledges for posts made on/after Dec. 18th will be charged the new service fee; existing per-month pledges will first be charged a service fee on January 1.) Streamlining these fees for creators and patrons ensures that creators take home as much of their earnings as possible.[/quote] the flat charge sounds kind of, bad? At least depending on the creator and their patrons, some people overwhelmingly seem to have $1-2 donators. Although, if their logic is accurate, it might be that bad in the long run. And they might still change it if turns out be quite harmful.

this change has been basically causing tons of people to back out of their $1 donations (since they can't donate less than a dollar before the fees) and since most patreons are built on the foundation of $1 donations, lots of creators are losing their fans. the fans aren't happy about it, and the creator's aren't happy that the change is being forced on it's patrons. it totally sucks that patreon did this and didn't think of the consequences. they're obviously listening but aren't really responding to the criticism.

I'm in several Patreon Discord channels and I'm seeing tons of people drop out of their pledges due to this increase. All of the creators I follow are completely against this change since whatever slight increase they get due to the lesser fees on their end is completely negated by the total loss of patrons. I'm glad I haven't had to modify any of my subs since I only have a few, but seeing all of these creators get fucked over because Patreon decided to do something that was advertised as something that should benefit them sucks. I really hope they backpedal on this and decide to scrap the idea since plenty of people won't pledge again until it's gone.

Just a quick math: [QUOTE] The extra amount you're expected to pay starts as [B]38%[/B] of a 1$ pledge, and goes down to 3% as the pledge amount goes higher (You're expected to pay 10% extra if you're pledging 5$). [/QUOTE]

I feel like Patreon's hearts are in the right place, but their heads just aren't quite caught up. Keeping their profit margins the same (assuming they're using honest, moral mathematics) while increasing profits of creators is great; but the fact that the additional brunt is offloaded onto Patrons is less great. Especially since it's not a simple linear increase, but has a flat fee on it. That hurts the low-end Patrons [b]a lot[/b], especially since a lot of those Patrons pledge such a small amount because they don't have the disposable income to justify larger pledges. I hope Patreon figures out a more fair way to implement this change.

The 35 cents on 1 dollar donations is on par with Twitch's 100 bit packs. Except twitch gets almost 25-30% from total cost and Patreon mostly gets 40-60 cents guaranteed out of any amount. But that is enough so people will stop pledging 1 dollar to 5 people and instead pledge 5 to 1 And hey, also fixed your scummy graph Patreon :glare: [t]https://i.imgur.com/i0ppqSV.png[/t] [t]https://i.imgur.com/t21VJSe.png[/t] ignore the unnecessary "r"s

They also updated the blog to explain their reasoning behind this change, and... it's dumb. Basically they want to change to charging you separately for every pledge on its own schedule rather than bundling everything together once a month. This is why it requires so many more transaction fees, because it's ass-backwards and only serves to 'solve' one specific edge case (upfront payment on monthly donations that are initialized near the end of the month). Christ this is bad.

[QUOTE=DarkMonkey;52958152]They also updated the blog to explain their reasoning behind this change, and... it's dumb. Basically they want to change to charging you separately for every pledge on its own schedule rather than bundling everything together once a month. This is why it requires so many more transaction fees, because it's ass-backwards and only serves to 'solve' one specific edge case (upfront payment on monthly donations that are initialized near the end of the month). Christ this is bad.[/QUOTE] If [b]that's[/b] their rationale, then I think Patreon should step up their game and be the good guy - and eat those transaction fees themselves, rather than taking it out on Patrons or Creators. Wishful thinking, I know. :v:

[QUOTE=Gmod4ever;52958162]If [b]that's[/b] their rationale, then I think Patreon should step up their game and be the good guy - and eat those transaction fees themselves, rather than taking it out on Patrons or Creators. Wishful thinking, I know. :v:[/QUOTE] [QUOTE] That’s a lot of fees for creators to pay. We had three options: Have creators deal with a huge increase in fees [B] Have Patreon eat the cost of the new fees (which is financially impossible given our current rate of 5%)[/B] Add a service fee so Patreon can cover the third party fees [/QUOTE]

The impact of this is stunning. I've seen a bunch of creators already lament that they're losing, surprise, a bunch of 1 dollar pledges. [media]https://twitter.com/jephjacques/status/938900825270898688[/media]

This won't be allowed to pull on EU customers when the "Payment Services Directive 2" goes into effect anyway. [QUOTE]1. Surcharging B2C transactions will be banned Charging customers extra fees on their bills to cover the costs of accepting consumer payment cards, will not be allowed.[/QUOTE] Source: [URL]https://www.clearhaus.com/blog/psd2/[/URL]

[QUOTE=ms333;52958305]This won't be allowed to pull on EU customers when the "Payment Services Directive 2" goes into effect anyway. Source: [URL]https://www.clearhaus.com/blog/psd2/[/URL][/QUOTE] You're right, they'll just [I]flat out block transactions lower than the limit[/I] for EU customers. [editline]s[/editline] Why don't they just change shit around internally so that the transactions are done in one lump sum? Like, if you have 10 1 dollar pledges, transact the 10$ instead of multiple 1 dollar transactions. Alternatively, for small pledge amounts have an option to batch your pledge so that you donate for multiple months at once, causing the same effect.

[video]https://twitter.com/Burrito_Tim/status/938847309223383045[/video]

Why are there so many people who pledge $1? That's so incredibly inefficient, I never would have thought of paying less than $5-$10 a month, would they still save money on those?

[QUOTE=Ericson666;52958518]Why are there so many people who pledge $1? That's so incredibly inefficient, I never would have thought of paying less than $5-$10 a month, would they still save money on those?[/QUOTE] You have 1000 people and each can either donate 1$ to 100 creators or 100$ to one creator. Would you prefer those people to help everyone or just one person?

[QUOTE=Ericson666;52958518]Why are there so many people who pledge $1? That's so incredibly inefficient, I never would have thought of paying less than $5-$10 a month, would they still save money on those?[/QUOTE] Because some people wanna help more than one creator but don't have limitless spending options??

[QUOTE=Ericson666;52958518]Why are there so many people who pledge $1? That's so incredibly inefficient, I never would have thought of paying less than $5-$10 a month, would they still save money on those?[/QUOTE] I can pledge $10 a month to one person I like or 1$ a month to 10 people I like, supporting them all. And then a thousand people do the same thing. I'm not made of money and I'm not stupid enough to donate half my paycheck to streamers or other projects but I still like to support free content that I enjoy even if it's only a little bit.

[QUOTE=phygon;52958455]You're right, they'll just [I]flat out block transactions lower than the limit[/I] for EU customers. [editline]s[/editline] Why don't they just change shit around internally so that the transactions are done in one lump sum? Like, if you have 10 1 dollar pledges, transact the 10$ instead of multiple 1 dollar transactions. Alternatively, for small pledge amounts have an option to batch your pledge so that you donate for multiple months at once, causing the same effect.[/QUOTE] That's literally how it works right now. Right now, they do the smart thing and lump all of your pledges together at the end of the month to minimize transaction fees. But apparently customer service is hard, so the only solution is to abandon the major benefit their service had in that regard.

[QUOTE=DarkMonkey;52959176]But apparently customer service is hard, so the only solution is to abandon the major benefit their service had in that regard.[/QUOTE] I can't see how customer service is involved in that considering they openly say that if you want a refund you should go directly to the creator, not patreon.

[QUOTE=Ericson666;52958518]Why are there so many people who pledge $1? That's so incredibly inefficient, I never would have thought of paying less than $5-$10 a month, would they still save money on those?[/QUOTE] I can pledge up to 2000 dollars a month if I want to. But I don't want to, because I got expenses I need to take care of and sending patreon money is not on the top of the list.

[QUOTE=Ericson666;52958518]Why are there so many people who pledge $1? That's so incredibly inefficient, I never would have thought of paying less than $5-$10 a month, would they still save money on those?[/QUOTE] It's significantly more beneficial for both creators and patrons to have/make lots of small pledges rather than a few big pledges. Let's say one creator makes $1000 from 1000 patrons at $1 each, whilst another makes $1000 from 100 patrons at $10 each. If both creators lose 10 patrons, the first creator will see their income reduced by only 1%, whereas the second creator will see a reduction of 10%. It is therefore much more sustainable to have many small contributions. As for patrons, pledging $1 per creator means that you can support more people you like whilst also not having to worry if you need to cancel your pledge, since the impact you make as an individual is smaller.

I don't understand why they don't just sum it all up every month and then put the extra percentage onto that. That would reduce the amount of transactions to one and keep the fees small compared to the total sum. At any rate I think their intentions are good, but their execution is poor, and I hope they can fix the situation. So far patreon has been a very good platform, and I would hate to see them get hurt from this.

[QUOTE=DrDevil;52960251]I don't understand why they don't just sum it all up every month and then put the extra percentage onto that. That would reduce the amount of transactions to one and keep the fees small compared to the total sum. At any rate I think their intentions are good, but their execution is poor, and I hope they can fix the situation. So far patreon has been a very good platform, and I would hate to see them get hurt from this.[/QUOTE] As I said before, that's how it works now. They are literally going backwards in terms of the solution process. Like, imagine if the new system was a starting point. Dozens of individual charges, each on their own schedule and each with their own transaction fees. The [i]first bloody thing[/i] people would think when they saw such a system in a vacuum would be to consolidate the charges onto a more consistent schedule, both for simplicity's sake and to minimize transaction fees. It's just baffling. Also, the ceo just tweeted that he's been talking with creators all day on the phone and will 'share more next week' after gathering his thoughts, which I'm sure is very helpful for the hundreds of patrons people have been losing.

Hope this gets fixed soon. My porn addiction depends on it!

Feels like they're going down the anti-consumer route since first they added more strict porn rules a while back, and now this. Do they not realize they're effectively [i]losing[/i] money by doing stuff like this?

[QUOTE=Killajax;52961591]Feels like they're going down the anti-consumer route since first they added more strict porn rules a while back, and now this. Do they not realize they're effectively [i]losing[/i] money by doing stuff like this?[/QUOTE] They've gotten too big and important for common sense, since a big mistake they make isn't make-or-break for the company. Their logo change was what told me they're definitely going down the retard route, so I'm not surprised, but still disappointing.

Don't worry guys, they finally responded [media]https://twitter.com/Patreon/status/939612512986849280[/media] /s

[QUOTE=NoOneKnowsMe;52962490]Don't worry guys, they finally responded [media]https://twitter.com/Patreon/status/939612512986849280[/media] /s[/QUOTE] Did they take damage control lessons from EA?

tweet is gone?