Patreon’s New “Transparent” Fee Structure Has Artists Worried. Here’s Why
Editor’s Note: Patreon’s CEO announced Wednesday that the company will not move forward with the proposed fee structure.
For everyone who uses Patreon, funding for creative projects just got a little more complicated.
This week, the creative crowdfunding platform announced that its fee structure will soon change. Rather than taking payment processing fees out of an artist’s monthly payouts, Patreon will begin charging those fees to patrons (donors).
This change is set to take place on Dec. 18, and some long-time Patreon users are alarmed by what it could mean for them and their backers.
How Patreon Works
Patreon relies on many backers offering small donations over an extended period of time, rather than large, one-time donations.
In this way, artists and makers have a more constant stream of support that helps them continue creating and working on larger projects that they otherwise wouldn’t have the financial resources or time to commit to.
Patreon backers, or “patrons,” can choose a funding tier that dictates how much they pay each month, along with what exclusive content, products or experiences they receive.
This allows creatives of all types to receive predictable income so they can devote more time to their craft, whether it be painting, music, knitting or dancing — or anything in between.
What Patreon’s New Fee Structure Looks Like
With the old fee structure, monthly fees could take anywhere from 7-15% of an artist’s Patreon income.
With the new fee structure, which places the responsibility of processing fees partially on donors, artists will be charged a flat 5% of their income each month — meaning they’ll be able to predict exactly how much they’ll pocket. This, Patreon says, is in an effort to provide artists with even more financial security.
Under the new structure, patrons will pay an additional 2.9% + 35 cents on each individual pledge.
This added fee, Patreon says, will allow donors to understand exactly how much of their donation the artist keeps. In the past, patrons had no way of knowing how little of their pledge the artist was actually able to keep.
But unfortunately, many artists who rely on funding from the site, along with patrons who donate a little money across many campaigns, are worried about how this new fee structure will affect them.
Users say the problem is “serial backers,” or those who support a large pool of campaigns with constant but small donations, may pull out when they realize that it will now cost them an extra 38 cents to make a $1.00 donation.
So, if a backer is supporting 50 artists with a single dollar each, they’ll now be paying an extra $19 in fees for each round of donations. If patrons’ donations are confined by a budget, they may end up being forced to cut funding from certain artists.
“This fee hits low tiers the hardest,” a webcomic creator who uses Patreon told Motherboard, “and these dollar tip jar tiers really are the foundation of so many small creator patreon campaigns.”
Too many low-tier backers pulling funding completely due to fees on their end could ultimately end up hurting artists more than the fluctuating incomes did to begin with.
Questions, Answers and What You Should Know
Patreon claims that these changes have been a long time coming. According to a spokesperson from the company, the company has been considering and working out this new fee structure for almost a year.
However, it seems that even after taking quite some time to evaluate this decision, Patreon still anticipated some pushback. In a Q&A post shared on Patreon’s site, the company includes an answer to the hypothetical question, “What if I want to take the hit for my patrons? Can I pay those fees?”
Unfortunately, the answer is no — leaving artists worried about how the next couple of months will pan out after the new fees are included in the first billing cycle of the new year.
In the meantime, Patreon encourages artists to educate their backers and to explain the new fee structure to them in the hopes that this new level of transparency between Patreon, artists and patrons will encourage them to continue supporting their favorite artists financially.
If you’re a creator, artist or maker who relies on Patreon, talk to your backers about the new fee structure and encourage them to continue giving what they can.
If you’re a patron, consider reworking your donor budget to include these fees (even if that means lowering your donation amounts slightly) rather than pulling your funding all together. You will have until December 31 to edit your monthly pledges.
If you’d like to know more about the reasoning behind this decision or how it will affect you as either a backer or an artist, you can read more about the new fee structure here.
Grace Schweizer is a junior writer at The Penny Hoarder.