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Patreon: Subscription Crowdfunding for the Creative Community

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Patreon, a crowdfunding company launched in 2013, has taken a novel approach to the fan funding model popularized by sites like Kickstarter and GoFundMe.  Under the traditional crowdfunding model, a user posts an idea for a new project or product, solicits donations/funding and once a milestone is hit the creator uses the funds to bring their idea to life.  This might work well for a one-off product or creation, but users in more creative industries that release multiple works over the course of months or years struggle with having to create a new campaign with new funding each time.  

Patreon identified this pain point experienced but a number of content creators and offered up a simple solution: subscription crowdfunding.  With with site, creators solicit funding not for one particular product or piece of work, but rather seek “patrons” who commit to giving a set donation for each piece of work that they release.  

Consider an unknown musician who uploads videos of her original music to YouTube.  That artist will make a bit of advertising revenue each time someone watches that video, but the artist has no way to predict how much she’ll make ahead of time, and unless she produces a viral breakout hit, it likely won’t be an enormous sum in any case.  If she wants to up her production quality and solicit fan funding ahead of time for a video she could do so on Kickstarter, but if that works well and she wants to create a second video she’d have to start the project from scratch.  

Now thanks to Patreon, our musician can ask for contributions on the platform and know that each time she uploads a new video, 150 people will contribute $625, for example.  This “guaranteed” income takes much of the guesswork out of content creation and mitigates the risk of losing money on the production.   

Much like Kickstart, many creators offer rewards for different levels of patronizing.  A $15 contribution might get the patron a t-shift, while a more substantial $30 contribution could lead to a reward of a one-on-one video chat.  To prevent abuse, users can also set a maximum monthly contribution at the time of the original donation.  

Patreon has introduced subscription crowdfunding to an entire new generation of online content creators, and with this groundwork in place I predict a very bright future for the company.  Imagine the possibilities as users become accustomed to the idea of micro-subscriptions in support of their favorite artists and creators of all kinds.  The company has removed one of the largest pain-points related to crowdfunding and has established a reputable and secure way for fans to support their favorite creators on an ongoing basis.


1 thought on “Patreon: Subscription Crowdfunding for the Creative Community

  1. One of the main concepts that Professor Elberse espouses in her work is that profitable creative content (creative content being defined widely across music, art, movies, sports etc.) tends to be the content that is backed by the largest amount of upfront investment both to produce very high quality content and to guarantee wide distribution of that content. While online distribution platforms, and this funding platform you have identified, have created a market for the longtail of content, that longtail remains unprofitable and in fact, has pushed the industry as a whole to spend even more behind a few of its properties to make sure they stand out amidst the proliferation of content generally. Given this backdrop, I question whether a platform like this will ever really gain momentum outside of niche subcultures and funding among friends for very small, personal projects. One way in which I could this platform being used is if large production/publishing houses find the platform useful to identify subcultures and trends early, that they can then have more confidence to promote more widely; however I still think the marketplace will fail to attract a critical mass of investors given the poor return on investment they are likely to experience.

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