New Patreon Fee System

By Shamus
on Dec 10, 2017
Filed under:
Notices

If you support my Patreon, then you probably got a notification recently that Patreon is changing how they process fees and pay creators. This change is being universally panned. I follow a lot of other creators, and I have yet to see a single person endorse this change.

Reader James asked on Friday:

Hi Shamus,

With the recent changes to Patreon, what’s the best way to support you and your content? I know you have Paypal as well but maybe there’s some fees there that you pay that you now don’t on Patreon…

Maybe a blog post about this might be useful to clarify things.

Kind regards,
James.

The best way to support me is still on Patreon. I guess? It’s the most convenient, and I’m a big believer in the idea that convenience is king.

This entire controversy is completely fascinating. At first I thought it was an understandable move, poorly explained. Then as I looked into the details it looked like a foolish move, dishonestly explained. And now that I’ve been looking at the numbers for three days it looks like an insane move explained by an idiot. The longer I stare at this mess the more strange it seems, which would make for fun analysis if it wasn’t directly tied to how I provide for my family.

Before I can discuss the change, let me explain how Patreon has worked in the past.

Under The Hood

As an extra security precaution, banks have begun issuing extra-blurry cards.

As an extra security precaution, banks have begun issuing extra-blurry cards.

When you donate to someone on Patreon, there are three fees that come into play. You don’t need to understand this stuff to give, but you do need to understand it to follow this controversy.

  1. Patreon takes a 5% cut.
  2. The credit card company charges a percentage. This percent varies between card companies and the actual details can get to be fiendishly complex. I don’t actually know what the average is, but it’s somewhere in the neighborhood of 2% or 3%.
  3. The credit card charges a flat transaction fee. Most quotes I’ve read put this number between $0.25 and $0.35 per transaction.

The last two fees are charged by all banks and card companies and Patreon has no control over them. So if you pay for $100 worth of goods at Wal-Mart, then your bank will charge Wal-Mart $2.90 for their percentage cut, and on top of that they will charge Wal-Mart 35 cents for the transaction.

HOWEVER, let’s say you don’t buy $100 worth of goods in one big transaction. Let’s say you buy 100 items for $1 each, and for some reason you pay for each item individually. I don’t know why you’re doing this. Maybe you’ve got a crush on the cashier and you’re looking to spend a lot of time with them. In any case, the bank will still collect that $2.90 percentage cut. They will also charge Wal-Mart thirty-five cents for each transaction. When your cashier is finally done ringing things up, Wal-Mart has paid $2.90 for the percentage and $35.00 for those per-transaction fees. Over a third of your money went to the bank rather than Wal-Mart. Given that retail margins are usually less than 30% for small items, this means Wal-Mart actually lost money. (And that’s before we take into account the cost of the cashier’s time and all the receipt paper you wasted. You absolute monster. What were you thinking?!)

Wal-Mart pays these fees themselves. Because the overwhelming majority of transactions are large, they don’t often encounter the latter scenario where they lose money. And when they do, it’s just a few pennies.

That’s fine for your typical Best Buy, Wal-Mart, or grocery store. But this becomes a problem when you’re running a Patreon and you’ve got 100 people giving you $1 each. Like the second Wal-Mart scenario, those per-transaction fees can take a huge bite out of your income.

To mitigate this, Patreon would bill everyone on the 1st of the month. If you support 10 people for $1 each, then Patreon would just charge your card for $10 and split the money up themselves. That nasty 35 cent transaction fee would only be inflicted once, rather than 10 times. Basically, the more people you supported the more efficient your donation would be.

So Why Change Things?

Why do I have a picture of a trombone here? Keep reading. It will make sense in a couple of paragraphs. Sort of.

Why do I have a picture of a trombone here? Keep reading. It will make sense in a couple of paragraphs. Sort of.

Originally, all of these fees were hidden within your Patreon donation. If you gave me a dollar, then all three fees would be subtracted from that dollar. (Patreon’s 5% + Credit Card cut + transaction fee.) These fees varied from company to company. Maybe you’d give me a dollar and I’d get sixty cents. Maybe I’d get seventy five.

This original system was not perfect. It created several problems:

  1. Uncertainty for the donor. This explanation I’ve just given is long and dull and not something people want to learn about when they’re trying to give you a dollar. If someone asks, “Wait, how much of this dollar are you getting?” then what they’re looking for is a clear answer and not accounting homework.
  2. Uncertainty for the creator. Those fees vary from month to month, and they do so in unexpected ways. Let’s say Bob gives me a dollar a month. He also gives Rutskarn a dollar a month. Then Rutskarn makes a particularly egregious pun. Offended, Bob withdraws his $1 from Rutskarn. As a result, my monthly take will go down. Rutskarn and I were sharing the burden of that $0.35 transaction fee, and now I’m bearing it on my own. This is a simple example but when you’ve got hundreds of supporters who in turn are supporting dozens of people and all those donors are using different cards with different fees… Ugh. Stuff like this makes it so that my income fluctuates slightly, even if I don’t have a change in donors, and it’s never clear where the money is going or why.
  3. Patreon absorbed the blame for the behavior of credit card companies. When someone learns that I only get seventy cents of their dollar, their immediate reaction is, “Wow. These Patreon guys take a HUGE cut! Greedy jerks!” But obviously Patreon’s cut is tiny compared to the cut the banks are taking.
  4. Patron rewards are granted as soon as you become a donor, but you’re not actually billed until the first of the next month. So if I’m a musician and I set it up so that patrons of $2 or more get immediate access to my huge library of trombone music, then you can get around paying me that $2. You just sign up as a patron on (say) the 29th of the month, download all those sweet, sweet trombone tunes, and then cancel your pledge before the end of the month.

I don’t know that I would call these “problems” so much as “annoyances”. I certainly wasn’t looking for Patreon to attempt to “fix” any of them. I was just happy I was getting paid and hoping nothing rocked the boat. Anecdotally, I gather most other creators felt the same way.

So What’s The New Plan?

I tried using this keyboard to chat with my wife and ended up sending her $5,382 dollars.

I tried using this keyboard to chat with my wife and ended up sending her $5,382 dollars.

Last week Patreon announced that – starting December 18 – they will be totally changing how they handle transactions. Rather than billing everyone on the 1st of the month, they will bill you as soon as you become a Patron, and then on the anniversary of that day every month. So each donation will be billed individually.

Also, the bank fees will “protrude” from the transaction. If you give me a dollar, then your card will be charged $1.38. Those extra 38 cents are the bank’s cut. Once the bank is paid, then there’s exactly $1 left and that gets divided, with Patreon taking its 5% and me getting the rest. This change supposedly clears up the uncertainly for the creator and shows the donor who is taking the really big cut (the banks). I can look at my income and know exactly how much I’ll get this month, and Patreon can stop taking the blame for the big bite the banks are taking.

Patreon is talking about this change in terms of “more money for creators”, and this claim is a strange blend of impossible and dishonest.

Yes, under the new system if you pledge $1 then I’ll get 95 cents. Yes, I’m supposedly getting “more money”. But you’re being charged more money and I’m actually getting a smaller percent of it. Yes, I’m getting 95% of the money you pledge, but I’m only getting 68% of the money you’re paying. In the old system, that sort of inefficiency was the worst-case scenario, and under the new system it will be the universal norm.

Even ignoring that, this means less money for creators because patrons have begun deleting their pledges. When Patreon announced the change, lots of people did the math, realized that they would be paying more and that their creator would be getting a smaller percent of it, and so they canceled their donations. Everyone I follow has seen a significant reduction in support. So even if this change did give me a slight raise from my Patrons, that theoretical raise can’t possibly offset the loss of supporters.

Patreon’s claims have been so at odds with reality that people have begun looking for alternate explanations. One popular theory making the rounds is that Patreon has decided that their “core users” – the people they care about – are their small handful of superstar creators with big donations. According to the theory, small-time losers like me aren’t really that valuable, and this change was designed to get us to take our small army of $1 donors and sod off, while leaving more money for the big dogs. I guess the thinking is that if you support 10 people for $1 each, then maybe after this change you’ll just give the whole $10 to the one person you really like and drop support for the other 9.

I don’t actually believe this theory. I mean, it would go directly against the stated values of Jack Conte, Patreon’s founder. Then again, this theory isn’t any more ridiculous than Patreon’s claims that this change will “help creators”. This new system incentivizes single large donations and punishes making many small ones, so regardless of whether or not Patreon intended to weed out the little guys in favor of the superstars, that’s that the system has started to do.

(If this theory is true, it means Patreon is profoundly insane / stupid / incompetent. Systems like Patreon benefit greatly from the network effect. The more people there are using the system, the more valuable the system is to everyone using it. It’s like a telephone. If you own the only one, it’s useless. If everyone has one, it’s indispensable. There are people I support on Patreon because I already had an account and it was easy to pitch a dollar their way by just clicking a button, but I wouldn’t have done so if it meant I had to set up an account first. If you shed all the small-timers and their supporters leave with them, then you’re greatly reducing the userbase. If fewer people are using the system then not only is the system useless to small creators, but up-and-coming creators will have a harder time getting donors. Getting people to create an account and enter those credit card details is hard.)

Moving on to the topic of people “stealing” content, superstar creator Hank Green said:

If this solution is being rolled out to solve THIS problem then this solution is madness. Look, I don’t have paid content. Everything I make appears for free, here on the site, without delay. The only reason to support me is because you want me to eat. I’m not selling “bonus content” or “early access to new content”. I’m not knocking people that do, it’s just that having my written content behind a paywall would harm me more than it helps.

But even if I did have paid content, and even if this change wasn’t pissing people off and costing me donors, I would still be strongly against this change. It’s not DRM, but it’s serving the same purpose. It’s inconveniencing your fans in an attempt to get money from people who want your content and don’t want to pay for it. If someone is willing to create a donation, grab all my paywall content, and then delete the donation before they’re changed, then they’re functionally the same as a pirate. (That’s functionally the same, not MORALLY the same. I don’t care to explore the moral dimension of this.) If we change the entire Patreon billing structure in an attempt to get those people to pay up, then we’re going to lose. Because those people have already demonstrated they’re unwilling (or maybe even unable!) to pay.

This Makes No Sense

Even by their own logic, this is a bad idea. Patreon put up a post defending this decision. In the last section of that post they say the #1 complaint for people using Patreon is that transaction fees are too high. Then they follow this up with some graphs clearly showing how their new plan will increase both the frequency and severity of fees! It’s surreal.

On top of everything else, this change apparently took everyone by surprise. I got en email about this on December 5th, and the change is set to go live on December 18. That’s not enough time for everyone to absorb, study, and respond to it. At the bare minimum, sweeping changes like this should be announced a full month before they go live. And really, given the complexity of the whole thing, this is not the kind of decision you make hastily. Ideas like this need to spend a long time in public discussion before you even consider giving it a roll-out date.

Instead they’re rolling out a massive change in how the service works, without doing any public discussion, right before Christmas.

Somewhere Patreon claimed they did this after getting feedback, but Graham Stark of Loading Ready Run casts some doubt on this:

For the record, I have yet to hear from a single creator that was consulted before this change was announced. Here’s a response from someone named Taylor Quinn, who is a smaller (~68 patrons) creator.

For the record, I got a similar result. Here’s Rutskarn, who probably counts as a “medium” creator with 173 patrons:

And here’s a similar response from Mikey Neuman, who easily rates as a large creator with over 1,600 patrons:

Everyone hates this: Large creators, small-timers, people with paywall content and people with free content. This plan is all downside.

In the defense of Patreon, I don’t blame this on evil corporate scheming. Patreon was founded by Jack Conte, who created the company because he wanted a way to fund his music projects. He is, at heart, a creator. You can find all sorts of interviews with him and see he’s not one of these silicon valley creeps that just sees the company as a means of generating wealth for himself. In fact, if you want to know who Jack Conte is then I can’t think of a better video than this one:


Link (YouTube)

It’s a video where Conte talks about what led him to create Patreon. The pertinent part is where he talks about spending a small forutne and stacking up credit card debt to make a music video when he didn’t really have a plan for how he was going to get paid for making it. He’s a starry-eyed artist and not really a keen financial planner. My guess is that this entire mess is less about calculating greed and more about having an idealistic hippie musician running a financial company.

On the other hand, Patreon apparently took a bunch of venture capital money, and VCs generally expect a return on their investment. Look, there is a time and a place for VC money. If you’re making a new gadget and you need a bunch of cash to get manufacturing started, then VC money can be a good option. But if you’re you’re trying to crowdsource some sort of hippy-dippy system of helping people to get paid to write fanfiction, draw pornographic furries, or write insane novel-sized rants about five year old videogames, then I don’t think your goals are going to align with the goals of your typical venture capitalist.

VC: So it's been a year and we're wondering what sort of growth opportunities you see for the company. How do you plan to increase revenue?

Jack Conte: You're looking to make money? Gosh, I dunno. You any good at drawing hentai?

Maybe the company has been co-opted by VCs that don’t understand the ramification of what they’re about to do, and maybe Jack Conte is just a hippie musician who’s out of his depth trying to run a corporation. We can cook up all the fan thoeries we like, but nothing can excuse the fact that this policy change doesn’t make any sense. Yes, the old system had a few annoying flaws and maybe there’s a conversation to be had about how how those could be addressed without radically upsetting the status quo. But the new policy creates new problems far worse than the original problems they were trying to solve! And then it doesn’t even solve those original problems!

The fact that Patreon is run by idealistic artists with questionable grasp of running a business means that our usual approach won’t work. I always criticize EA in terms of “You are bad at using your assets to make money” and not “You’re being a big meanie!” because I know they will never care about being branded a “meanie”. But I have some hope that Conte et al will respond to a more personal appeal.

Or I did, until this backlash. After several days of very detailed criticism and the exodus of many donors, Conte said:

I was hoping for something more along the lines of “This is not the response we expected. We’re not going to enact this policy on December 18. Instead we will push this plan back until we’ve gathered more feedback and had a jolly good think about it.” I mean, I’m not even asking for an apology. Just stop doing this obviously destructive thing before you do any more damage.

So this is a terrible plan, enacted by surprise, and even after almost universal condemnation they’re not even willing to tap the brakes. That is… not encouraging. Even if things go back to normal, I’m really worried about what sort of dysfunction must be going on inside the company.

If you’ve stopped supporting me, I totally understand. I’m not mad at you, I’m mad at Patreon. I’ve currently lost ~24 donors and I suspect I’ll lose a lot more before this is over. Even if Patreon backpedals tomorrow and renounces the new policy forever, they’ve burned a lot of trust. And in the world of donations, trust is second only to convenience. Some donors won’t be back. Maybe they’ll stay away because the whole thing left them with a gross feeling, or maybe they just won’t get around to setting up their donations again. No matter what happens, it’s already too late for Patreon to completely undo the damage they’ve done.

Having said all this, I’m not doing anything hasty. I’m looking at alternate support platforms. I’m sure I won’t close my Patreon, but I might move to another platform for my “primary” source of support. I don’t know. We’ll see.


Comments (235)

From the Archives:

  1. MichaelGC says:

    Rutskarn makes a particularly egregious pun.

    I see we’re not limiting the discussion to hypotheticals.

  2. onodera says:

    This sounds terrible. I give out $1 pledges on Patreon exactly because I get charged only once per month, sharing that single transaction. I wouldn’t even mind if Patreon made sure the creators got the full pledge amount each: I have ten single-dollar pledges, so Patreon could charge me $10 plus their 5% cut (50c) plus whatever transaction fee Visa or Matercard wants.

    Hell, why not let creators or patrons choose who pays the fees? Even SWIFT lets you do that.

    Some creators I support avoid the cancellers by emailing the links to rewards when the pledges are charged. This is not a problem that should be solved by changing when patrons get charged.

  3. Jordan says:

    > Rather than billing everyone on the 1st of the month, they will bill you as soon as you become a Patron, and then on the anniversary of that day every month.

    That there is going to break a lot of Patreons that provide bonus stuff not hosted on the site itself unless it adds tools to allow auto-mailing of patreons as their pledges go through.

  4. Anitogame says:

    “but I might move to another platform for my “primary” source of support. I don’t know. We’ll see.”

    Kickstarter are rolling out Drip next year. Great timing, Patreon, doing something stupid just as a major competitor is about to roll out something that’ll eat your lunch if they play their cards right.

    • tzeneth says:

      This is why this decision with this backlash is even MORE baffling. You are hemorrhaging patrons, creators are angry at lost revenue, and you’re not doing anything about it as a rival company is about to enter into competition with you? Patreon would have the homefield advantage where they already are established and have the benefits of the network effect like Shamus mentioned. They are literally creating a reason for both backers and creators to abandon their platform and go to Drip without a second glance, assuming Drip isn’t using this exact same model.

      Although it could also be the exact reason they are doing this rollout of changes so fast. They are trying to change their policies to entice or keep people from going over to Drip. If this is true, I think their incompetence at seeing how negatively this is affecting them, both financially and in the media, and not reversing or delaying course is pretty clear to see. Well, Drip/kickstarter (parent company of Drip) are probably looking at this and smiling at either an opponent who fell on their own sword and gave them an opening or that Patreon has made a change to their charging to match their own, thus not giving Patreon the edge with regards to ease on the backer’s part.

    • Dreadjaws says:

      Reminds me of all the issue at the start of the current gen of consoles. The Xbox One did so many stupid things that Sony didn’t even had to promote their console. All they had to do was point out “See all those dumb things? We are doing none of them.”

      • Anitogame says:

        Yep. And then Sony went and did the same thing Microsoft did with the 360; sat on their laurels and got complacent. Sony’s going to have another major upset in the near future again.

        • Bloodsquirrel says:

          Microsoft didn’t sit on their laurels. They had a vision. And by “they” I mean Don Mattrick, who was more concerned with shit like turning Xbox Live into a TV channel than advancing the Xbox as a core gaming platform. He was also in love with the Kinect, but never found anyone who could make a game for it that would really sell the device to core gamers.

          Fortunately, he was fired not long after the E3 debacle.

          • Anitogame says:

            I meant that the 360 sold so well that Microsoft thought they could get away with anything. Sony’s in that position now thanks to the success of the PS4.

    • Adeon says:

      I hadn’t heard about that but it sounds like a great idea. Kickstarter itself can also potentially work as a funding source for creators.

      I know at least one creator (Rhado Run Through) who’s actually been doing a yearly Kickstarter for several years now instead of having a Patreon or other sources of funding. Obviously this only works for a relatively popular creator but it is an option.

  5. DangerNorm says:

    Good old fashioned PayPal seems to come out as a strong contender here. They also support subscriptions, and they support ACH transactions, which have no fee of their own, and so the current PayPal fees to receive money from a bank account or PayPal balance is just PayPal’s take of 2.9% plus $0.30 USD per transaction.

    If you insist on credit or debit cards, they support that to, at the same rate to send. This means that it doesn’t provide the charge-consolidation of Patreon for many small donations, but hey, it’s credit cards, a fundamentally convenience-oriented service. It should be surprising if there was a way to build an efficient infrastructure on top of them.

    Patreon is effectively a brand of game-ified PayPal with a social media aspect and an integrated web-hosting service that can serve any website, as long as it’s a Patreon creator page. No efficiency-minded high-value donor would use it, for the same reason I donate to the charities I support via check rather than credit card, but from the creator’s perspective, that branding does bring in extra patrons, so it’s not as tho it’s frivolous.

    But fundamentally, there just isn’t any existing financial infrastructure for sending large quantities of very small transactions, for which the previous solution seemed like a clever work-around. Yet, now they’ve gotten rid of that.

    • Richard says:

      Patreon’s single unique selling point was the way they used to consolidate the charge.

      There are any number of ways to charge “subscribers” a small fee every month, however every single way of moving money from one account to another carries fairly high per-transaction charges, which one or both ends have to pay for.

      In my case it’s an international transfer, so any transfer costs about $10 plus a percentage.

      That clearly is not going to happen.

      If only a trusted broker could somehow sit in the middle, collect all the $1 I want to send across the pond, do it in one go so there’s only one $10 fee and take a small cut of the total…

      Maybe that could work as a business.

      • Echo Tango says:

        If only a trusted broker could somehow sit in the middle, collect all the $1 I want to send across the pond, do it in one go so there’s only one $10 fee and take a small cut of the total.

        This was pretty much how I was going to suggest PayPal actually fix their transaction / fee problems. Charge donors once per month for all the people they donate to, so that there’s a single fee going to the bank / card company, and a single percentage going to Patreon. Then send all the money to the creators in one lump sum every month, so there’s also a single fee for that transfer.

        • Echo Tango says:

          …and then I re-read the boring section of Patreon’s blog post, and realized that they’re explicitly moving away from this type of payment structure. :S

        • Olivier FAURE says:

          While this would absolutely be convenient, does Paypal have any incentive to do this? They probably take their own cut on individual transactions aside from banking fees, which probably make them more money than the added transactions would under a different system.

          I mean, they basically have a monopoly on online transactions, so their incentives probably lie on the side of charging a lot.

  6. Ryan says:

    Were I the CEO at Patreon, here’s what I would do to “fix” most of the problems inherent in both the old and new system:
    1. Move the 2.9% flat fee back over to the creator side. Yes, that means the creator’s cut goes from 95% down to 92.1%, but that was already the *best* case scenario prior, and this still allows for the simplicity in the math of how much the creator gets.
    2. Retain the once-a-month billing, on the 1st, and have the patron get charged the single transaction fee on top of their donation, rather than it coming out of the creator’s cut. Simple, transparent, and still less for the banks.
    3. Give a radio-button at donation time that allows the patron to choose between getting charged immediately to gain content right away, or waiting until the next month before gaining access. For donations larger than $1, prorate for partial months, but with a floor on the donation of $1. Critically, don’t pre-select an option for this, and clearly show how much the potentially-prorated charge will be if the patron chooses to do so.
    4. When a patron has multiple donations, perhaps put a little note on the account page that their giving to multiple projects is resulting in a diminished average for the transaction fee. Make them feel efficient and thrifty for backing *more*, and perhaps even show an “average” fee per donation.

    • CJK says:

      A slightly tidier version of your 3rd point, borrowing some ideas from Dan Olsen (@foldablehuman) – charge for a full month at signup time, and prorate the partial month on the first of the next month. Now nobody gets reward content unless they’ve paid for a full month, and nobody ever has to pay more than 1 month’s donation at once.
      (there are some weird edge cases there for people who change their pledge between those two dates, but I’m sure someone could find a solution if it were their job to do so…)

      • Rick says:

        I think this is the best way around it the paywall issues and lets them consolidate payments again and bring fees back down.

        • Blackbird71 says:

          My recommended fix for this issue would be to retain the current system of billing on the 1st of the month, but if you cancel your Patreon account, you are automatically and immediately billed for any outstanding pledges.

          • Decius says:

            Billing people when they cancel is the worst possible idea for a service. Charge before you provide anything that isn’t a gift.

            • Blackbird71 says:

              So far as billing when you cancel, that is standard operating procedure for a number of systems. For one example, I’ll name my power company. I’m in the process of moving; once I do, and cancel my service, they will charge me for anything I’ve used since the last bill. There is no way they are just letting me leave before the next bill without paying.

              If you pledge an amount to someone via Patreon, you have already committed to paying that amount. The only reason you haven’t paid it out immediately upon clicking the button is that it is easier (and cheaper) for the billing department to wait for a particular date. There is absolutely no reason that they can’t charge an already committed and promised amount upon cancellation of an account.

              If you use something, and cancel before you are billed, that could be construed as theft. A “billed immediately upon cancellation” policy protects against that.

              All Patreon would have to do to make this happen is that when someone goes to cancel their account, it would take them to a screen with language to the effect of “You understand that by cancelling your account, you will be immediately charged for all outstanding pledges”, followed by two options, “Yes, cancel my account and charge my remaining pledges” or “No, I’ve decided not to cancel my account at this time.” Frankly, it seems like the simplest solution to me; far better anyway than any sort of “wallet” feature that would have to be kept pre-loaded, and would require Patreon to develop a system to actually hold funds.

    • Lazlo says:

      Or how about this: Bill patrons once a month, at a rate they feel comfortable with, for “patreon-bucks” in a patreon account, and when you subscribe to a creator, or change your donation, or whatever it is, that change *immediately* comes out of your account of patreon-bucks, with no impact whatsoever on your credit card (Think of it more like your Steam Wallet)

      So there’s no way to “pirate” paywalled content by skipping out, so creators who rely on paywalled content are safe from that. And you’re still consolidating transaction fees, so that’s a win for everyone.

      Honestly, the only one who seems to really “win” in this new scheme is the credit card companies. According to wikipedia, patreon has (had?) 1 million patrons paying $150M per year. So that’s pretty easy math, $.35*12*1M = $4.2M, $150M *2.9% = $4.35M, so the cards were making an easy $8.55M from patreon.

      Now assume that none of that changes, and the average pledge is $2, the percentage fee will stay about the same, but the transaction fees will go to $.35 * ($150M / $2) = $26.25M. Even if *half* of the patrons decide to shut down, the card companies still almost double their payday.

      The insanity of this to me is that the pooling of transaction fees was, to me at least, one of the largest core benefits of patreon, but apparently they decided it was something they could do without.

      • BlueHorus says:

        Honestly, the only one who seems to really “win” in this new scheme is the credit card companies…the pooling of transaction fees was, to me at least, one of the largest core benefits of patreon[‘s old system], but apparently they decided it was something they could do without.

        Exactly. The system, as it was, was kind of galling with card companies getting a cut of money not intended for them, but that was inevitable – if you can find someone offering to move your money around for you for free, I can almost certainly show you a scam…
        Patreon had done the best they could by using block payments. Creators get more money; backers have an incentive to give more money to more creators in the name of efficiency; the card companies get the smallest version of their cut that Patreon can manage.
        Why change that, especially to a system in which people pay more money to give less of it to the people they actually want to fund?

        Patreon itself (especially after a load of backers stop using them) is the main loser of their own policy.
        ???

      • Anitogame says:

        Yeah, you’re not the only one to suggest a bucket system, where people can pay x amount into a bucket and then use that to pay creators however they like. But apparently that’s far too sensible for the dumbasses who run Patreon.

        • Nick-B says:

          Oh dear lord, I hate bucket systems. Do we really want to go back to the good ol’ days of buying microsoft points ahead of time, then being magnanimously allowed to spend that on the goods itself? It’s the same thing. If I want to become a patron, I will have to pour money into an account right now, and THEN find ways to spend that all up?

          It’s hard for me to describe, but I see no value at all in putting money into a wallet ahead of time then spending it in small chunks here and there. That’s way less convenient for me than if I make individual purchases every time (buying a new steam game), or adjust my monthly subscription as I find more things I want to do (Patreon). Putting money into a wallet ahead of time forces me to either spend MORE money than i wanted to at that point in time, or calculate how much money to put into the account so it comes out even (which is the same as a regular order checkout, but I get to go through checkout twice! yaaaaaaay?)

          • Anitogame says:

            No one mentioned fake currencies. It’s literally just a wallet you pay into once to avoid massive charges, then use to pay creators you want to support. That simple.

          • James says:

            While I agree that “bucket systems” are terrible, the real problem with Microsoft Points is the complete disparity between how much things cost in points versus the number of points you had to buy. It seemed like everything I wanted cost $4.00 worth of points but you had to buy them in chunks of $5.00. Or maybe it was the other way around.

            Regardless, there was always an annoying leftover amount, like using a gift card except worse because the only way to use your entire balance was by purchasing items that added up to exactly however many points you bought. Totally effing annoying. Then, when they converted the points to cash, I forgot to spend mine before they expired and I lost a few dollars. Not a big deal personally, but still a total ripoff overall.

          • Lazlo says:

            The more I think about it, the more I realize you don’t really need a bucket system. Just have it so that when you subscribe as a patron, you commit to a certain amount. The creator is then committed to getting that amount. At the end of the month, patreon sums up your commitments for the month, and charges your card.

            If you unsubscribe halfway through the month, that doesn’t change the commitment you made, you still get charged for it, and the creator still gets paid.

            The only way to “cheat out” of paying is to disable your card before getting charged, and really that’s just a variant of the well established practice of chargeback fraud. So long as the rate isn’t extreme, the costs of this sort of fraud can usually be reasonably easily absorbed, and it can’t be done at scale, because once it’s done, the card used becomes flagged as problematic. And even if it could be done at scale, it wouldn’t be, because these are digital goods, and it’s far easier to just pirate them than to go through complex credit card fraud mechanics.

        • Zak McKracken says:

          Isn’t that what Flattr does? I’d say that’s a different type of thing from what Patreon focusses on.

          …although having both in one platform (i.e. only having one transaction per month) would be my preferred thing, I think.

    • droid says:

      On point 3:
      The creator of the patreon should have the option to only charge new accounts at the beginning of the month. This would mean that for some creators it would work as you described, but for others there would not be a choice and it would just charge at the beginning of the next month. We know some creators care about the early access to perks, and we also know that some don’t.

      In either case the page should clearly show when payments would be made and for what amounts.

      These points all make tons of sense, it solves the problem of immediate access, doesn’t have the double payment problem, and doesn’t trash the unique advantage Patreon has. I am waiting until Dec 18 to see if they really go through with their plan, but based on what they said so far I don’t think they are considering change.

    • Zak McKracken says:

      The freeriding thing could be disabled by simply making it so that creators who want to do this only make their stuff available after the first payment. So if someone pledges mid-month, they’d either have to make an early transaction, or wait until the first of next month.

      That early transaction should then have the option to include the regular mongthly payment, so no extra charges apply, they’d just pay early.
      …although, really, I agree with Shamus that this does not really look like a terribly imnportant case.

      More important: Fee transparency. And I think that should be solveable mostly by UI design. Every Patron sees how much they pledge, how much of that will go to transaction fees, and how much every creator they support will get. Creators get an overview of pledges they get, including how much is eaten by bank transaction fees. And there you go, a lot fewer support tickets!
      Or if you want to, add the fees to the patron’s bill, but then make sure it’s really only one transaction per month (unless the patron actively chooses to pay something extra out-of-schedule) ==> The patron sees how high the bank fees are, the artist has certainty of how much income they get.

      Ideally, really, transfer fees to Patreon should be handled entirely between the bank and the patron. That way the Patron should see how much fees they’re being charged and choose their payment method (credit/debit card, different bank, services like Paypal or Transferwise…) to minimize them.

    • Aanok says:

      3. Give a radio-button at donation time that allows the patron to choose between getting charged immediately to gain content right away, or waiting until the next month before gaining access.

      Pretty much this. Like Campster said in his post, the fault with people being uncertain about fees doesn’t so much lie in the system as in the user interface.

      On charge up front subscriptions, simply let the user choose:
      – They can indeed pay upfront and get instant access;
      – They can plan their subscription as starting on the next month, delaying their access. A digest email will make sure to note they’ve unlocked new content once the payment has been processed;
      – They can set a reminder for the 1st of the next month, upon which they’ll receive a separate digest email recalling they’ve expressed interest in CUP Patrons.

    • James says:

      These are all great ideas except #3. All they need to do is preserve the current system, but make the first charge immediately. The patron will still get a partial month for free, but at least they paid for whatever content they might get, plus there’s no complicated proration stuff to worry about.

      As far as #2/#4, I assume you mean the flat fee would be applied to the patron’s total monthly transaction, right? That way if I donate $1.00 to 10 people, Patreon can charge me $10.35 each month instead of $13.50 (10 x $1.35). Considering how many small donations their platform processes, this new per-donation charge system seems like nothing more than a big giveaway to banks.

  7. Alex says:

    According to the theory, small-time losers like me aren’t really that valuable, and this change was designed to get us to take our small army of $1 donors and sod off, while leaving more money for the big dogs. I guess the thinking is that if you support 10 people for $1 each, then maybe after this change you’ll just give the whole $10 to the one person you really like and drop support for the other 9.

    I don’t actually believe this theory.

    I’m pretty sure I’m not the typical patreon User but to me this seems to be the flaw of patreon regardless of the billing scheme (which I agree otherwise is stupid).

    For comparison, both Netflix and HumbleMonthly each cost me the aquivalent of about US-$12 a month and provide me with more content, than I have time to consume. Besides the obvious “sucks to compete with Netflix, eh?” we might agree that $12 is the market value of such things.

    So I have $12 to distribute on patreon. I can give $12 people $1 each, be in the reward tiers of none of them and don’t even get the fuzzy feeling in return that I have made a meaningful contribution to anyone’s income (the latter might be a fallacy depending on how you look on it, that’s why I said “feeling”). OR, I give my $12 to the one single person I favor most, be in that person’s reward tiers an freeride on the rest.

    Note that these two alternatives needn’t be different, economically. I and 11 other people, without ever talking to eachother, could easily coordinate by looking at the amount pledged, to give our respective $12 to 12 different creators and everybody gets the same payoff. But, as you correctly say, people don’t do that. They just give their money to Jim Sterling. I seriously wonder why that is. [Cynic: Sucks to compete with Netflix AND Jim Sterling, eh]

    Ideally, Patreon would just take my $12 flat and distribute it to creators according to what I’m actually viewing. There are several reasons why this is not feasible in practice. On top of those I guess that would favor Sterling even more. I. e. I presume the ratio from your pledges to Sterling’s is larger than the ratio from your “views” to Sterling’s.

    • Nick-B says:

      That doesn’t even include the invasive eye-ball watching that would be needed to keep track of exactly how much of your time is spent viewing Shamus’ content vs Sterling. Will all patreons need to have all content entirely on the site now, in order to allow tracking of this content? Is that going to segment Shamus’ viewers, with half of this content locked behind paywalls on patreon and the content he still wants to post for free publicly onto his own site?

      If a creator is allowed to post on both, then that ruins the calculations even more. If I ever did patreon, it would be for shamus (sorry I am such a leech) and maybe one or two other people that announced patreon, and I sure as hell will not go view the content on patreon’s site instead of here. Which means Shamus will get zero of my patreon money?

      • Erik says:

        Also, let’s not forget that although I may read two things that take the same amount of time to read, one may be far more valuable to me than the other.

        For example, some webcomics I’m delighted to be able to support the creator of, love the story, and wait eagerly for updates even if it only updates 3x a week. There are others I read that are just barely worth the time to toss in my RSS feed and glance at daily. Yet because they update daily, I spend more time a week reading them. I’ll gladly contribute $1-$5 a month to the first, and wouldn’t read the second at all if I had to pay. But your scheme would have me paying the second twice as much as the first.

        Time =/= value. Eyeballs =/= worth.

    • Primogenitor says:

      But how do you compare different kinds of content? If I watch a streamer for 12h in a month, and 12m of Jim Sterling in a month, does Jim get 1/60th of the streamer? What about 5 hentai pics (which may or may not feature Jim Sterling) – how does that rate?

      The most sensible way to resolve that is to allow patrons to decide how much each is worth relative to the other, and thus how much they donate to each. Ideally, that should actually be truthful and not meta-gamed in any sense.

    • AnonCoward23 says:

      That’s basically what Flattr is (was? It’s old-ish). You put $X into your account each month, and at the end of the month it distributes that amount according to which Flattr-buttons on random websites you clicked.

      • Anitogame says:

        I tried Flattr once. It was terrible. Maybe it’s better these days.

        Also, they’ve been using this situation to their advantage, unsurprisingly (‘hey guys, we don’t do this sort of stupid shit, use our service!’).

    • Zak McKracken says:

      That last thing you’re mentioning is what Flattr does: They record time spent on creator’s content and distribute your monthly contribution accordingly.

      That’s also the reason I buried my plans to give people money via Flattr. Not going to install spyware on my machine, not even for a good cause.

      • Anitogame says:

        Wait, what? O_O They seriously did something like that? When I used Flattr it was basically just a micropayment system. You click the button on a post (or whatever) you liked, and it sent a little bit of money to the creator. That’s it. If they’ve seriously gone and done something stupid like needing to install spyware that determines how long you spend on content… yeah, they can fook off.

        • Zak McKracken says:

          Just to be sure I don’t talk trash about a company who doesn’t deserve it, I just went and looked it up from their website: I don’t know exactly how it works, but you no longer have to press any buttons to flattr a website, and you need to install something on your device to make it work.

          Here’s an interesting sentence from their website:
          “Flattr measures your attention (without compromising your privacy!) as you enjoy the internet, and automatically flattrs creators.”

          Looking further: “While using the Flattr extension, most of your data is stored on your machine and never accessed by us or any other party. We only receive the data we need to determine who should receive your flattrs.”

          Soo… that sounds less dramatic than what I wrote initially. Still not really for me. I’d much prefer the old way where I click something when/if I like it, and not the other way round. You can apparently remove websites you did not mean to flattr, but I’m still rather skeptical about that.

          • Anitogame says:

            > Flattr measures your attention
            > without compromising your privacy

            These two things don’t match up.

            Yeah, I’ll be striking Flattr off my list of alternatives to try. Thanks for the heads up :)

  8. Cubic says:

    I would summarize it as Patreon wants everyone to donate more than $1/pop. But it’s still the popular choice, especially if you take aggregation into account.

    If I worked there, I’d investigate various sorts of incentives instead of this. It seems strategically foolish to raise the bar to handing over dollars. Patreon is hardly a juggernaut at this point.

    Many of the issues would be better solved if they moved away from hippie financial reporting so creators understand what’s going on when income fluctuates, etc.

  9. Daemian Lucifer says:

    Ive seen this before with taxes in my country.Its an incredibly stupid convoluted system of displaying prices that everyone hates,and benefits only the scammers.

    So back when the new tax system was rolled out in my country,the reasoning was to make it so that only the final consumer pays it.If Alis sells a plank of wood to Bob,Bob pays a percentage of that price as taxes,then later when they sell a shelf made out of that plank to Charlie,Bob gets their taxes refunded,while Charlie pays a percentage of the shelf as the final tax/oversimplification.
    Sounds reasonable.

    Except,instead of incorporating all those taxes into the price,what everyone did was write the prices as PRICE+TAX.So instead of the seller doing all the math behind the scenes and calculating all their taxes and returns in their books,they moved even that responsibility on the customer.Now every time I wanted to buy something,I had to first calculate how much would I ACTUALLY have to pay before getting to the cash register.

    Worse,because there were taxes before that were incorporated into the prices,instead of removing that part and then adding the new tax on top of that base,most sellers used the previous amount and ADDED the new tax on that,effectively making the consumer pay the tax TWICE.It was a horrible mess for years before it finally got sorted out.

    And now,it seems that patreon is doing the same exact stupid thing.A shame really.

    • BlueHorus says:

      Worse,because there were taxes before that were incorporated into the prices,instead of removing that part and then adding the new tax on top of that base,most sellers used the previous amount and ADDED the new tax on that,effectively making the consumer pay the tax TWICE.

      Ah, the wonderful world of taxes and/or human nature. It doesn’t matter how well-intentioned the law or virtuous the principle, someone will find a ‘creative’ way to interpret it.

    • AnonCoward23 says:

      The thing you describe as reasonable is how VAT works across the EU, yes. The price that gets displayed to the customer always has to be with VAT included, too, so no math required.

      • Munkki says:

        Yeah I mean same here in Australia; I’m pretty sure that by law you can’t display something with one price and then charge a higher price at the checkout. (It’s either by law or by very strong convention; at any rate no-one does it, and I can’t be bothered going to look it up now)
        Which means every now and again you can get a really good deal on something that’s been mislabelled, or which was on special earlier and still has the discount prices clearly marked on it. Sometimes if it’s a small enough business I’ll specifically ask if it’s been labelled correctly, because then they are allowed to charge you the correct price and you’re not taking advantage. I think there was one time I came across something where they’d left a decimal point off the price tags by accident and were selling a $20 thing for like $2; the lady at the checkout looked horrified when I brought it up.

      • Matt Downie says:

        In the US they tend to add sales tax only at the end of the process. Which is confusing to European visitors.
        Customer (holding up an item): “How much is this?”
        Shopkeeper: “Ten dollars.”
        Customer gets out a ten dollar bill.
        Shopkeeper: “That will be ten dollars and eighty seven cents.”

        • Fade2Gray says:

          I didn’t even know that utopias existed where the price you see is the price you pay…

          • Mistwraithe says:

            Hehe, no doubt tongue in cheek on your part, but it is interesting traveling the world and seeing the various foibles of each country.

            There are many, many things to admire about the United States, but common sense approaches to things like tax, legal liability and healthcare are unfortunately not among them…

    • Zak McKracken says:

      I wonder a little: If Paatreon pays VAT on a transaction, which amount is that applied to? The pledge? The money transferred by the patron? The money send to the creator?

      Does the amount of VAT change with the new system if the amount of money paid by the Patron stays constant?

      • Viktor says:

        There’s a specific page in the Patreon FAQ for dealing with VAT. It’s too late for me to find it, but it’s not hard to find.

      • MichaelGC says:

        It’s applied to the pledge, so if I pledge $10, I’ll get a separate $2 VAT charge on top of that. It’s all prior to/separate from e.g. the subsequent Patreon slicing-&-dicing of fees where there are multiple creators.

        Under the new system, if the amount paid by the patron stayed the same, the VAT amount wouldn’t change. However, as I understand it, unless they edit their pledge, the amounts paid out by the patron will be going up, so that’ll mean the VAT amount will increase, too.

    • Except for the paying tax twice, that sounds like here.

      Oh, but I also have to remember which county I’m in, as the percentage is set by county (mine is like 8%, Cobb’s 7% because they’re not paying for MARTA)* and what isn’t taxed (unprepared foods, I think? plus the occasional tax-free weekend to help with kids going back to school costs). Since I have a rabid fear of not having enough money, I just round up like mad. It also means I pick my counties for big-ticket items (we’ve never bought a car in our county because of that one percent).
      *Yes, my total tax rate is a combination of federal, state, and local (county/city?) taxes. Since I don’t leave the state much, I deal with county fluctuations much more.

    • James says:

      Sales taxes here in the US change all the time (except 4 states that have no sales taxes)… they’re made up of state, county, and municipal taxes, each of which can change by various means – legislation, levies, etc.

      So, expecting retailers to relabel every item in the store every time taxes change is insane. It’s much easier (and not any less fair) to leave prices alone and just apply the volatile taxes at the checkout. Besides, if you think it’s confusing to add up a bunch of items and then multiply in the tax to figure out what your bill will be, imagine adding up a bunch of crazy numbers instead.

      Because a typical store prices most items pretty close to an even dollar amount. You might buy a bottle of shampoo for $2.99, a video game for $59.99, and a blanket for $14.99. Add them up, you get about $78. Say your area’s sales tax is 8%. I’d do a rough calculation of $80 x 8 and get $6.40. Since I rounded up, I know my total will be a bit under $78 + $6.40 or $84.40.

      Now let’s say the store priced everything with the tax included. Now the shampoo is $3.23. The video game is $64.79. The blanket is $16.19.

      Now, I don’t know about you, but if I’m buying a whole bunch of things, those crazy numbers are going to get harder and harder to easily add up in my head. Sure, I’ll save the tax calculation, but at the “cost” of making every single item a weird price. You might say “that’s the store’s fault, they can keep the prices easy to add up.” Yeah that’s true, but which direction do you think they would round everything? Certainly not down.

      Now say next month the sales tax increases to 8.5%. In my first example, I just multiply $80 x 8.5 and get $6.40 plus another $0.40, or $6.80. If you’re really bad at math, you can multiply $80 by 9 and know the tax will be under $7.20. So, once again, I know my total will be under $85. But if the store runs around and relabels the shampoo to $3.24, the game to $65.09, and the blanket to $16.26… Yeah, just… no thanks.

      There’s also something to be said for transparency in taxation. It would be a lot easier for small governments to raise taxes without you noticing if you don’t see that number change on your receipt. In one case, you know your prices increased because taxes jumped from 8 to 8.5%. In the other case, you don’t really know why your bill increased, but you’d probably blame the store for raising their prices (even though they didn’t).

      • Daemian Lucifer says:

        Sales taxes here in the US change all the time

        But….but…..but whyyyy??

        • Decius says:

          Because the city levies a tax, the county levies a tax, and the state levies a tax. Whenever any of those three bodies changes the rate, the entire price changes.

          And also they might round pennies differently, and charge on the full purchase, not per item. 7% of $0.99 is $0.07, but 7% of $99.00 is $6.93; seven cents less than if each item were labeled and charged at $1.06.

      • Mistwraithe says:

        That’s, um, a very interesting attempt at justifying why the US system is good.

        But I can’t help thinking that if you experienced a country where sales tax is the same across all items, in all cities, is built into all the prices and varies maybe once a decade or less, then you might find that simplicity really is better?

        OTOH, your explanation does make the case that people living in the US should be much better at doing multiplication in their head which almost enough of a justification on its own!

        • James says:

          Actually, I wasn’t arguing for our crazy tax system. I work in government auditing and it’s a nightmare keeping all the little villages and cities and counties in compliance with tax law.

          What I was arguing for is, given our current messy tax system, keeping the burden of a VAT scheme away from businesses.

          I didn’t even bring up the fact that different localities apply sales taxes to some items and not others, and some categories are carved out for different rates. For example, food is generally not taxed… unless you buy it at a restaurant AND eat it inside that restaurant – then you have to pay tax on it. But most places have ‘sin’ taxes – huge taxes on alcohol and cigarettes, and usually even soda. And remember the restaurant example? Even if you don’t pay tax on your meal because you leave and eat it outside of the restaurant, you still have to pay the soda tax if you bought a caffeinated drink. If that’s not confusing enough, some states have a sales tax holiday once a year for clothing and school supplies, when those items are tax exempt for a short time period. It’s kind of a logistical nightmare from every perspective.

  10. The best theory I’ve seen is probably this one: https://subfictional.com/my-theory-patreon-doesnt-want-to-be-a-money-services-business/

    It’s the only one I’ve seen that explains their inability to back down. Perhaps they’ve even been directly threatened by the feds.

    That said, if that is the reason,I think they need to say so.

    • Alex says:

      Thank you. Makes sense.

      I’m not convinced the official explaination hasn’t got a grain of truth to it, though. I find it totally plausible that people in general (not the smart people here, obviously) got confused by batch billing with the tacit implication that patreon doesn’t want to deal with their confusion any more.

      Or put differently “not wanting to be in the money services business” applies not only to regulations but also having to do customer support for such a business. Transactions after the new model might be more expensive but what they buy for that additional expense is simplicity.

      If “not being a money service business” is a sound business model for patreon is a different question.

    • evilmrhenry says:

      Came here to post that. Yeah, there’s actual regulations in that space, and wanting to avoid those regulations makes more sense than the actual reasons we’ve been given. I still disagree with the decision. They really should have just bit the bullet and followed the regulations, or made a deal with a company that can handle this correctly.

      • Echo Tango says:

        Yup. This would have been the best for both the payers, and the content-creators. Even if Patreon didn’t want to do this themselves, I’m sure somewhere out in the wild world, there exists a company that actually would have been able to provide this service for them.

    • Cubic says:

      Yeah, that makes a lot of sense. Basically, they have had a chat with the financial authorities, whoever they may be in this case, and gotten a strong hint about how they will be classified. Now they want to avoid that.

    • I’m also finding this to be the most likely scenario, but the one thing I don’t get is why this wouldn’t have come up the moment their website went live. The article makes a point about it:

      it’s quite common for venture-backed startups to operate in a regulatory grey-area

      But it doesn’t explain how they’re able to do this. What are the mechanics of enforcing regulation? For classification? Were they given a timetable? Is there’s special regulations? If not, why not?

      It just feels very arbitrary to have to make such a hard turn with no warning.

      • Supah Ewok says:

        The answer is that the government doesn’t track the millions of websites in existence live. Only the ones that get big enough to be worth tracking. Patreon could have registered their business as one thing, proceeded to grow to the point that it should be classified as another, and then it takes time for a human in the Dept of Treasury, or Commerce maybe, to realize, “Hmm, maybe we should check into this Patreon website, make sure it’s doting its i’s and crossing its t’s.” Then they spend time looking into it, evaluating it, then notifying it of problems. Contrary to what some believe, the government generally doesn’t blow the doors with the Gestapo at the first sign of regulatory negligence.

        Also, you can coast pretty far without knowing a whole hell of a lot. There are lots of businesses that launch without knowing much about finances or legal matters, particularly “starry eyed hippy artists” as Shamus put it. This is why about 50% of new small businesses go bust by the 5 year mark (Patreon is about 4.6 years old). At some point, unless they get really lucky their coasting ends up crashing against a hard wall of reality, which can come in the form of not having a real plan to generate revenue, or getting the feds’ attention and not surviving it.

        tldr; Government regulatory agencies are staffed by humans, and it takes human initiative to get the ball rolling on these things, which depends on them first noticing a problem (and whether they will is generally a statistical certainty in the long run, but in the short term is entirely random about when it happens and dependent on individuals), and then deciding to act on it, all of which takes time.

      • guy says:

        Assuming the article is correct in its assumption, most likely the regulators weren’t themselves entirely sure whether it should be classified that way at first, and started taking an interest when it got big enough to be worth retasking someone from all the other regulating they were doing. Then they’d send Patreon a letter informing them that they’ve been illegally operating an unlicensed money transfer business, and if they corrected that immediately the regulator would not pursue legal action. If Patreon falls into the existing definition of a money transfer business, then they’ve been getting away with it by being beneath notice.

        On the other hand, it’s also possible that Patreon does not fall under the current regulations but the regulator considers their business to fall within what the law authorizes them to regulate. In which case Patreon is doing this in anticipation of new regulations, which will need to go through a lengthy approval process including a period for open public comment before implementation.

        • Veylon says:

          Why not just put this out in the open, then?

          Conte could put out a bulletin saying, “Hey, look everyone. We’ve run into some legal snags due to the growth of our company. We’re going to have to change things around to comply with the law. This isn’t my idea and I hope that we can get things squared away before too long. I’ll keep in touch and let you know about any new developments.”

          Why make up a bizarre story and accept the blame for harmful decisions when they could be pointing the finger at the government?

          • BlueHorus says:

            Quite.
            ‘We have to do this for legal reasons’ would be a much smarter way to explain the changes.
            Even if it’s not true, it might have been a good idea.

            • Sleeping Dragon says:

              I wouldn’t lie if I were them because this kind of thing has a tendency to come to the surface but I’m perfectly willing to believe that some kind of legislation caught up with Patreon, Heck, some legislation might even have been rephrased, updated or just re-intepreted with “Patreonlike” sites in mind, but if there’s even a grain of truth to this they very, very, veeeeery badly need(ed) to say so. Patroen earned itself a lot of goodwill by letting people support content creators without (the feeling of) actually giving most money to “the man” and at the same time enabling a lot of said creators who’d otherwise have extremely slim chances of reaching sufficiently large paying audiences… and right now they’re throwing it all out the window!

          • David W says:

            If they want to keep the option of arguing that they weren’t breaking the law in the first place, then they really don’t want to announce that they’re changing things to comply, that’s practically an admission of guilt. They probably need time for their lawyers to research the law in enough detail to see if they might win a suit if they fought.

            Keep in mind, it’s only been three days, most of that weekend. If this was a surprise to them, then they’ve barely started reacting.

            Also, if they’ve been actually breaking a law, then the regulator probably has some discretion in penalties. Probably a range between ‘strongly-worded warning’ and ‘shut you down forever’, honestly. At this point keeping the regulator happy would be more important than keeping their customers happy.

            It’s like, if you’ve been pulled over by a cop, it’s a much better idea to say ‘yes, officer’ and do what he says than to start shouting to the bystanders about pigs always hassling you. Even if you were driving perfectly, and even though you have the right to free speech. Save the arguing for court.

            • Cubic says:

              Am I under arrest? I’m a sovereign citizen.

              • Daemian Lucifer says:

                Oh dear god,anything but that!

                • Decius says:

                  Don’t ask if you are being detained until you plausibly aren’t.

                  And don’t try to argue law with the police. Ask if you are being detained, and if the answer is not ‘yes’ or ‘no’, reply with “direct all questions to my lawyer unless I am free to go”. They will ask you a question after that, you will walk away, and they will put you in cuffs and unambiguously arrest you. Which is what you wanted, right?

      • Bloodsquirrel says:

        But it doesn’t explain how they’re able to do this.

        Because they’re usually pushing a new business model that might fall under this or that regulation, but without a court case to set an official interpretation of the law it’s uncertain. Laws and regulations are rarely well-written enough to unambiguously handle new business methods and questions that they weren’t written with in mind. Uber, for example, was classifying its drivers as independent contractors until it was challenged.

        While these business are still new and small there just hasn’t been a chance for anyone to sort it out yet. Nobody wants to spend the time and effort to do it until they become too big to ignore.

    • David W says:

      That makes a lot of sense. It would also actually explain why they’re saying so little and sticking to their pre-approved talking points. It’s always a bad idea to comment on pending litigation. It’s especially a bad idea if you’re in a grey area, where you might change your strategy after doing research on the law. I can think of at least two plausible approaches that would be mutually contradictory, and they wouldn’t want to commit to either approach in public to customers before they finish their preparation (at the earliest).
      1. Throw themselves on the mercy of the regulator. ‘We’re sorry, didn’t realize it was an issue, we stopped as soon as you told us and we’ll be good from now on, fine us but don’t shut us down please’ If they take this approach, it’s important that they change their payment model as soon as technically possible.
      2. Argue ‘The regulations don’t apply to this situation because…’ If they take this approach, it’s important that they don’t make any statements saying ‘turns out we were breaking the law’. And it’s still a good idea to change policy now, to minimize the damages if they lose.

      Combine the two, doing what you need to be able to go either way later once your lawyers finish their research, could definitely explain a fast change in policy with an inadequate explanation. Their intent would be to either revert to original policy or clarify later, once they get their ruling.

    • onodera says:

      This makes a lot of sense. David W’s comments make a lot of sense as well and explain why their PR is so tongue-tied about the issue.

      This also means that any sufficiently diversified and popular company that *is* a money service business can now devour Patreon’s market share, since its only remaining competitive advantage is its patron and creator base, now in turmoil and ready to abandon ship.

      Should we wait for Apple Amateur Artist Assistance? Or Google Generosity? Or PayPal Patronage?

    • Bloodsquirrel says:

      That does make a lot more sense.

      If true, though, it does make a rather sad example that the regulatory costs of such a simple business model are high enough to force them to do something this drastic.

  11. John says:

    Edit:. This was supposed to be a response to Daemian Lucifer’s comment.

    Now every time I wanted to buy something,I had to first calculate how much would I ACTUALLY have to pay before getting to the cash register.

    This is how sales tax works in the United States. The price on the sticker is never the price you pay at the register. When I was a child, sales tax was only about 7%. Thirty years and a few thousand miles later, the tax is usually 10%. I’m not thrilled about the higher rate but the mental arithmetic is at least a little easier. (Sales taxes in the United States are set by states, counties, and cities, so rates can vary considerably depending on where you live. Different types of goods may also be taxed at different rates.)

    • Bubble181 says:

      The USA is also about the only country in the world where taxes are added in afterwards. In all of the EU, for example, it’s illegal. Advertise with a $10 meal, and you can only charge your customers $10 – not $10+$SURPRISETAXESANDVAT=$17.55.

      • Cubic says:

        Sales tax in the US tends to be a slap in the face while VAT in Europe is more like a spiked glove punch.

        • Supah Ewok says:

          Especially in places where there isn’t much state tax. In Texas, I can buy $300 in groceries, and sometimes have no sales tax. Depends on what I buy. Alcohol always has it, but a lot of other things don’t. If I go out and order a fast food meal for $7.59, I’m usually looking at $8.50-$9.20 with tax added. Thus I’ve never really paid much attention to sales tax. Will have to see if I keep that up when I move out of state.

      • Primogenitor says:

        For a meal in the US it’s more like $10+$SURPRISETAXESANDVAT+$TIPTOAVOIDEMPLOYEEPOVERTY=$25

        • Viktor says:

          Yeah, I don’t mind the tax calculation, since 10% is usually close enough. But tipping is supposed to be a reward for good service, not a mandatory charge. Here’s a thought, if your business can’t afford to pay a living wage to all employees, change your business. Don’t pay them $2.13 an hour and then depend upon my generosity to make up the difference. And that’s before we get into the recent changes to regulations that allow the owners to pocket tips.

          On the tax talk in general, I actually do prefer value-added tax, in that it eliminates the confusion over who counts as the end-user who needs to pay taxes, but honestly, sales taxes are regressive anyway and doing a higher tax on all corporate revenue would probably be a better option for both simplicity and for encouraging people to spend money.

          • Daemian Lucifer says:

            What irks me about the vat is that it counts for goods and services,but not on employee wages*.Even though employees are selling their work as a service,and the employer should be taxed on that.

            The whole minimum wage including tips thing is seriously fucked up though.

            *At least this is not how it works in my country.

            • Zak McKracken says:

              Weeell, in all places I know about, that thing you describe is called “income tax”.

              And “social/health/pension insurance/contributions”
              Whether this is being formally paid by the employee or the employer is just an organisational detail (although people can be tricked by some of those number games…)

            • Cubic says:

              If you’re a proper contractor, your employer will pay you VAT and you then get to total it with the rest of your activities and report it to the IRS according to all the rules.

              Since VAT is a ‘pass-through tax’ for companies, paying VAT to employees (who then would have to send it in to the IRS as-is, after which the IRS pays it back to the company) would just increase red tape as far as I can tell. It could possibly serve as a short-term interest free loan to the govt, I guess.

        • BlueHorus says:

          Ah, the US culture of tipping.
          For everything.
          And they stand there looking expectantly at you until you do. It’s annoying until you realise what they earn without the tips…

        • djw says:

          Except as far as I know there are no states with a VAT.

          • Richard says:

            VAT is a type of sales tax.

            All US states (except Alaska, Delaware, Montana, New Hampshire and Oregon) have sales taxes, as do many US cities.

            The difference between EU VAT and US Sales Taxes is that VAT is only paid once, by the final consumer, while sales taxes are charged on all retail outlets, even if the purchaser is a business.

            VAT is also arranged in such a way as to be much harder to evade.

            • krellen says:

              Untrue. Sales tax is levied on the end consumer. Tax levied on every sale is a Gross Receipts Tax, which only five states have (three as an alternative to corporation income tax, two in addition, both of which don’t really functionally use it as different from a sales tax).

              If you are a wholeseller buying from a supplier, with the intent of then selling those products to the public, you get a tax exempt certification, which allows you to make your purchases without a sales tax, which will instead be assessed (by you) when you sell to the consumer.

              • Richard says:

                Thanks, so Sales Tax is almost exactly the same as VAT then.

                Except for the part where US sales tax is far more confusing, harder to administer and far easier to evade.

                (Even accounting for VAT triangulation within the EU, which is such fun)

      • Kalil says:

        Don’t forget tips… The US is also the only country that allows underpaying employees on the assumption that customers will, out of the goodness of their hearts, make up the difference.

        • Blake says:

          Worst part of that American scheme, if you try to be a good business and pay people a livable wage then your prices will be higher than your competitions and nobody will want to buy from you!

          Maybe they’d need signs saying “We pay our employees well so don’t feel obliged to tip unless you love our service”, but they’d probably just end up with less money coming in that way so it might not be a great move.

          Really businesses should be forced to pay their employees a livable wage for their time.

          • Zak McKracken says:

            Found a long article on Medium some time ago (no time to look for it now, sorry), about a restaurant owner who did just that, and how he eventually quit because he couldn’t stand the hate he was getting for it.

            …apart from that bit, it seems to have worked really well, by the way.

          • Matt says:

            Current US law is that if an employee’s wages + tips must at least equal minimum wage for the same period of work. This is posted on the legally required Department of Labor posters in every business. Leaving aside the concept of a “livable wage,” every server should at least be getting the minimum wage.

            While I have heard stories of some servers not getting at least this because of ignorance/employer malfeasance, I strongly believe that most servers actually come out BETTER in a less wages + tips regime, even if only marginally so.

            • djw says:

              My biggest concern with the tip mechanism is situations where the servers can be coerced by the kitchen staff for “favors” in return for quick service (and in return good tips). I don’t actually know how common this is, but it seems like an easy to abuse system.

              This is why I usually tip well even when I feel the service is slow. Although I sometimes complain first and then tip.

        • djw says:

          Is USA *really* the *only* country that does this? I find that difficult to believe…

          Not arguing in favor of tipping… just pointing out that there are 195 countries, and Europe and America are just a tiny fraction of that.

          • ISTR (based on a visit nearly 20 years ago, so take w/ a pinch of salt) that South Africa has a similar tipping/wages system – if you didn’t tip, servers effectively didn’t get paid. As a Britisher (we tend to limit tipping to “thank you, your service was above average and I am appreciative”), I found it a rather uncomfortable notion.

      • Blake says:

        Australia (where I live) has the tax included.
        I visited Japan a couple of years ago and was surprised to find out it wasn’t, I hadn’t really thought of it as a concept. Didn’t know the US was that way too.

      • Echo Tango says:

        Canada also has after-sticker taxes. Luckily (in my province anyways) they’re about 11%, so it’s not very hard to calculate. Just annoying…

  12. Alan says:

    Of the many things that infuriated me about this mess is how deceptive their graph of expenses was. It suggested a modest price hike, but if you show the graph for concrete donations, it balloons. https://plus.google.com/photos/photo/113837870379391431519/6497045219132843410

    • Mortech says:

      ^ Amazing graph, also agree with your follow-up comment:

      All of this bullshit is happening because, Patreon claims, some creators wanted to ensure that their posts only went to people who actually paid. Today, you can pledge, see the content, then cancel.

      If these people are real, what the hell are you doing on Patreon? What you want is a store or a subscription.

      “What is Patreon? … For creators, Patreon is a way to get paid for creating the things you’re _*_already*_ creating_ (webcomics, videos, songs, whatevs).” (emphasis mine)

      That is… patronage. You don’t back because you want something, you back to ensure the creator can continue to create. Backer only content shouldn’t be some previous thing, it should be a tiny perk for backers. Knowing that someone “stole” your work shouldn’t particularly bother you.

      Patreon is fucking everything up because they want to be a store and a subscription service. But they’re terrible at it.

      It seems Patreon is trying to solve a problem for people who are misusing their site, while making everything worse for people using their site correctly, and once fixed won’t have any tangible benefit (since, as Shamus said, people who are avoiding paying now are unwilling or unable to pay anyway).

  13. Rack says:

    I’m saying this from being in the privileged position of being financially liquid but the solution seems to be to push $12 a year over $1 a month donations. Either operate the patreon account on a credit system or just have a larger donation eligible for either higher tiers or lower tiers for longer.

    • Sleeping Dragon says:

      I don’t think that would be likely to work, at least not in most cases. I could be convinced to do a yearly payment to someone I’ve been supporting, or at least who’s been around, for a while but a new account? And it would especially be those new accounts for whom those donations are crucial. Even putting aside possible malicious intent many patreons simply fail to provide the income that the creator hopes for and have to be cancelled, while on the other side of the coin many supporters either aren’t sure of their financial situation enough to want to make that investment (especially if we’re talking about larger amounts than 1$ a month). or “test the waters” first by making small commitments and seeing what the creator has to offer before increasing the amount they pledge. On top of everything else psychologically it feels like you’re spending more money even if the sum total is actually the same over the course of the year.

      • Bloodsquirrel says:

        Worse, it’s less predictable for creators. You’d be waiting a whole year to see if your supporters are unhappy and dropping off.

        • Syal says:

          Plus self-employed folks pay taxes by the quarter in the US. I think having the whole year’s profit in one quarter would cause them problems; if nothing else it could draw audits.

  14. Wow. You couldn’t make that scenario much worse if you deliberately tried to. :(

    Jack Conte: You’re looking to make money? Gosh, I dunno. You any good at drawing hentai?

    Cue a Weird Al Yankovic-style parody song “It’s all about the tentacles” running endlessly through my brain….

  15. Mephane says:

    Rather than billing everyone on the 1st of the month, they will bill you as soon as you become a Patron, and then on the anniversary of that day every month.

    As a general rule of thumb, for any system of recurring things, in 99.9% of all cases it is better and saner to do the recurring thing at a fixed point in time instead of a fixed period after the recurring thing started. This applies to anything – from content subscriptions to daily quests in MMORPGs to 24 hour DSL reconnects* – you reset at the same fixed point in time each round, and not based on whenever precisely the thing was started.

    *I once had a router which broke this rule of thumb. It performed the 24 hour reconnect exactly 24 hours after the last time connection was established. Which means you must think hard when to plug it in, because that will be the time your connection will be briefly disrupted (which for example throws you hard out of many online games, for example) every day. That is, unless you have a short internez outage, have to reboot the router for any reason, have to briefly unplug it to, say, physically move it, whatever – then that new reconnection time will mark the 24 hour reconnect. It was madness, and probably the one of the worst purchases I have ever made. At least I learnt that when shopping for routers, my #1 thing to check is whether they can let you set a fixed time for the 24 hour reconnect.

    • onodera says:

      I have a counterexample for you. When I was a college student two of my friends worked for an ISP in its call center. That ISP switched from charging its users every Nth day of the month to charging its users every first day of the month. The end of the month night shift became hell for its hotline support, as they would now get nonstop calls from 12 am to 4 am, and more calls from 6 am till the start of the morning shift, as all accounts with insufficient balance would now get blocked at the same time.

      • Richard says:

        Another counterexample would be workplace vacation.

        In every company that does it annually, they are severely understaffed during the final three weeks before rollover.

        Or they waste a lot of HR resources and lose worker goodwill as managers suddenly have to deny vacation requests causing the workers to either lose rightful vacation or roll it over to the next year (contract, legal requirements etc)

        Spreading it out to the (approx.) anniversary of start dates removes most of the problem – it’s very rare that a significant proportion of any one department would have started together.
        And it’s not like companies don’t have things that happen on the anniversary of start date – almost every company has an employee annual review.

        • Thomas says:

          Our annual reviews are a set date – which makes sense because they’re fed into a wider moderating system.

          On the other hand, our leave and timesheets are based on when we start for the reasons you said.

          I much prefer subscriptions to be based on start date normally. If I bought a month of Netflix, I don’t really want to only receive 20 days because I signed up on the wrong date. And paying a reduced price is unnecessarily complicated.

  16. Lance says:

    I used to support creators on Patreon but I deleted my account immediately after their data breach (https://arstechnica.com/information-technology/2015/10/gigabytes-of-user-data-from-hack-of-patreon-donations-site-dumped-online/). Looks like I made the right decision.

    I emailed one of the creators I used to support to see about an alternative and the best we could come up with was “mail me a cheque”.

  17. epopisces says:

    I listen to three podcasts regularly, two of which use Patreon (so small sample size). One of the two is abandoning Patreon outright, the other is warning their users and seeking alternatives. This. . .seems like a fantastic opportunity for a competing service like Paypal or Drip to step in and knock Patreon down a tier.

  18. Marc Forrester says:

    I don’t believe this is unrelated to the efforts to destroy net neutrality. The powers that be want the internet tamed and supporting the status quo like television and radio before it. You don’t have to directly oppress dissenting voices if you can just force them back into 9-5 employment to keep bread on the table.

    This doesn’t need any kind of centralised conspiracy to happen, just a general understanding that concentrations of wealth should have their voices amplified to the detriment of everyone else.

    • Supah Ewok says:

      Not likely, Patreon sent out emails to all patrons and creators a month ago to advocate against repealing net neutrality.

      • Marc Forrester says:

        I said it doesn’t need a centralised conspiracy. Pressure to do this wouldn’t be clearly signed “love from the backlit cigar smoke shadow government”, but its effect is to steer the world in the same general direction as the neutrality repeal.

        Reading over the comments again, I suspect Jeremy Bowers has highlighted what the pressure *did* look like. “Do this or you will be regulated as a money services business.” More in sorrow than anger, I’m sure.

        • Bloodsquirrel says:

          That makes absolutely no sense. Repealing net neutrality is reducing the amount of control that the government has over ISPs. Hardly a good move for somebody trying to “tame the internet”. Who, exactly, benefits in terms of control over the internet from reclassifying Patreon as a monetary services business? If Patreon was starting to ban creators based on their political views to avoid regulation, you might have a point, but right now all we see is that Patreon has gotten big enough that a bunch of existing regulations (the kind that were being demanded by people blaming the credit crunch on evil bankers were demanding) now have to be considered as to whether they apply or not.

          And if there’s anybody trying to build a distopian internet-authoritarian state, it’s Google, who was against repealing net neutrality. None of this tracks coherently.

          • Locke says:

            Who, exactly, benefits in terms of control over the internet from reclassifying Patreon as a monetary services business?

            Credit card companies. I don’t think that’s where Marc Forrester was going with this, but the somewhat similar possibility that immediately leaped out to me (derived from the usually helpful tactic of asking who benefits, imagining a scenario where they made it happen, and then see if that makes sense – if it does, there’s decent odds that’s what happened): Credit card companies probably don’t like how Patreon is able to get around a lot of their fees, but what with the hippy-dippy CEO and all, they might not have had much leverage over them.

            ISPs, however, do not have hippy-dippy CEOs and might be perfectly willing to accept what amounts to a bribe in exchange for threatening to slow or even block Patreon unless they restructure themselves to ensure the credit cards get their cut. Patreon may have accepted the ultimatum under the prediction (possibly correct) that they would lose fewer patrons to this update than if Verizon (or whoever) blocked them entirely. That squares perfectly with Patreon being opposed to this, because of course they don’t want to be bullied into damaging their own market penetration even before we get into the CEOs personal values. They’ve even put the new system four days after the FCC decides whether or not to repeal Title II, which means if all this is accurate (and do remember: I have no evidence, this is only a possibility), they’re giving themselves a few days to abort the change in the unlikely event that the FCC doesn’t remove Title II protections on net neutrality.

            I also find it plausible that Patreon might not want to appear as though they’re at the mercy of ISPs for either business reasons, because even more patrons will start seeking alternatives if they realize that Verizon (et al) just got the power to rewrite Patreon’s policy at-will, or for personal reasons, because its leaders do not want to admit to having been forced to give in to corporate demands and having no recourse if new demands follow.

            It’s also possible that credit card companies are using government connections to put the squeeze on Patreon via threatening to reclassify them in such a way that more regulations apply to them, but that seems a lot harder than just sending Verizon a whole lot of money in exchange for what’s about to be some perfectly legal extortion.

            • Bloodsquirrel says:

              That’s a bit of stretch. First off, Patreon is far too small a fish for credit card companies to be that overly concerned with. Their payout to creators is only around $150 million. The few percent of that that credit card companies make is only going to be a few million. That’s not enough when split up between multiple credit card companies to be worth bribing multiple ISPs to block Patreon.

              Second, Patreon is not particularly vulnerable here. They’re not a high-bandwidth or latency-sensitive service. A Patreon that is being throttled isn’t much less effective a service. The ISPs would have to straight-up block them, which would be far too public and extreme a move.

              Third- and this is what people forget in their hysteria about net neutrality- the ISPs would be devaluing their own service by blocking Patreon. Maybe not by much with this one website, but the more sites and services they block and throttle the less people are going to use their internet, and the less inclined they’re going to be to pay for higher bandwidth caps or a faster connection. And since the amount the credit card companies could afford to bribe them would be small, it would be a small benefit for a small contribution to a major problem with their service.

              Fourth- this is absolutely not a game that the credit card companies want to play. They do not want ISPs to start block websites that are making them money. They might stand to increase their revenue made off of Patreon by a few percent doing this, but if they block Patreon they loose it all. And if the ISPs start blocking other websites where people are spending money because this or that competitor bribed them to then there’s going to be an overall reduced amount of spending (because not everybody is going to move to the competitor), which makes them less money overall. So this isn’t a precedent that credit card companies would like to set.

              Fifth- since these are publicly traded companies we’re talking about, their accounting books have to be open to a certain degree. So it’d be easy to find out if the credit card companies were making payoffs to ISPs.

              Sixth- the credit card companies don’t need to do any of this nonsense with going through the ISPs anyway. They could just threaten Patreon directly, refusing to accept charges from them unless they come to a deal regarding rates.

              This kind of conspiracy theory falls apart really, really quickly when you start being realistic about what the actual self-interests of the parties involved are. The credit card companies using a few lobbying connections to get a regulator to look more closely at Patreon is more plausible by multiple orders of magnitude. That’s something that would only cost them a few rounds of golf on their tab, draw far less heat to themselves, pushes Patreon in the direction they want without risking them being outright shut down, and doesn’t involve them pushing ISPs into behavior that will ultimately hurt them.

              • ehlijen says:

                I agree overall, but on the point that people won’t use an ISP if they block too many sites: Isn’t one of the big issues that many people don’t get a choice of ISP in the US? At least that’s what I was told, that in many regions one cable company or another has the market locked down.

                • Bloodsquirrel says:

                  ISPs almost always have different tiers of service, and they obviously want people to buy the better ones. It’s basic price discrimination- if they set their prices for the lowest tier at the rate that the people willing to buy the highest tier are willing to pay, then too many people wouldn’t be able to afford it. So they need their product to be valuable enough that people who can pay more will be willing to pay more.

                  In other words, if people can’t game and watch Youtube on the mid-tier plan, then they have no reason to buy anything other than the low-tier plan.

              • Locke says:

                First: Getting ahead on 2% gains here and there is the bread and butter of a credit card company’s business. They are exactly the kind of organization that might plausibly care about a few million here and there adding up into a big pile. Additionally, ISPs are about to get nearly unlimited power to throttle or block websites they don’t like anywhere they don’t (as individual companies) face competition (which is common), but face the serious possibility of having that power drastically curbed in the near-ish future if a pro-net neutrality president is elected in 2020. They have every reason to want to entrench precedents for being able to block or throttle whatever they want while within the window of having an unrestricted ability to do so. ISPs don’t have to be getting a huge paycheck to consider blocking Patreon worthwhile and they don’t all have to be blocking Patreon for the threat to be effective, just enough of them that Patreon can expect to lose more patrons from a block than from their new policy. That can be as few as one.

                Second: This is true, in order to seriously effect Patreon the ISPs would have to block it outright, but they can go ahead and do that because…

                Third: The people who see lots of throttling and especially blocking are going to be the people who have no alternatives. People living in competitive areas will get different and far better deals than people who have no choice. They may still have to pay an extra $30 a month for unthrottled internet, but they’re much less likely to find themselves blocked from services the ISPs want to kill nor to be required to pay hundreds of dollars for some ultra-premium package in order to get all of their content unthrottled. People who live in areas with an ISP monopoly – and there are quite a few of those – not only can be but have been victimized by these kinds of shenanigans. ISPs used to get smacked down for that kind of behavior on a case-by-case basis by the FCC prior to Title II, but that is unlikely to be the case going forward and ISPs will be very eager to set precedents while the FCC is still on their side.

                Fourth: I’m pretty sure at least one credit card CEO knows what a tragedy of the commons is, and that the best move is to exploit the Hell out of it as fast as possible even though you’d be better off if there were someone around to stop you (and everyone else) from doing that.

                Fifth: The payoffs are relatively small, which makes it easy to hide them beneath other expenses – if the credit card company(/ies) responsible bother hiding it at all. We’re not talking about anything illegal here, just one company paying another company to conduct their business in a manner that is more convenient for them. There’s not really a whole lot of incentive for a cover up in the first place.

                Sixth: The credit card companies would have to be acting as a cartel for that to work, and unlike the ISPs, credit card companies do not have local monopolies they can exploit, so if they try to block Patreon, people who like the service can plausibly just switch cards.

                While I still have no particular evidence that this is actually happening, you aren’t making the compelling case against its plausibility that you seem to think you are.

                • Bloodsquirrel says:

                  Getting ahead on 2% gains here and there is the bread and butter of a credit card company’s business.

                  Not if they’re spending twice as much as their gaining. You can’t ignore costs, both directly monetary (bribes) and otherwise (people longer using their services).

                  They have every reason to want to entrench precedents for being able to block or throttle whatever they want while within the window of having an unrestricted ability to do so.

                  This is completely backwards. Precedent isn’t going to help them if the government changes the rules. What they want is for people to forget about net neutrality, and not abuse their power so badly that public pressure invokes another rule change.

                  ISPs don’t have to be getting a huge paycheck to consider blocking Patreon worthwhile

                  Yes, they do. Again, you’re ignoring costs. Patreon is part of the service that they’re selling. The more sites they block, the less valuable that service is. They’re charging me $60 a month before taxes and other fees for internet right now. Is the extra 75 cents a month that my credit card company is going to make because of this change really worth enough to justify a bribe high enough to mess with that? Especially when there’s a high chance that I’ll just cancel my donations and they’ll actually lose that money?

                  The people who see lots of throttling and especially blocking are going to be the people who have no alternatives.

                  See my response to ehlijen- the ISPs still want to sell higher-priced plans to those who can afford it.

                  I’m pretty sure at least one credit card CEO knows what a tragedy of the commons is, and that the best move is to exploit the Hell out of it as fast as possible even though you’d be better off if there were someone around to stop you (and everyone else) from doing that.

                  That’s doesn’t work at all. There’s no cost for the credit card companies to hold back and not fuck with things until somebody else does. Tragedy of the commons doesn’t apply here, because there’s no finite resource that’s being exploited. If Amazon gets a competitor blocked, then the credit card companies haven’t lost their ability to get Patreon blocked.

                  The concept of mutually assured destruction is more applicable here- nobody has a first strike ability that can end the game before they get hit back, so nobody has an incentive to start lobbing nukes at each other.

                  The payoffs are relatively small,

                  Again, no, they’re not going to be small because small payoffs reap small benefits that aren’t worth the costs. You don’t start a nuclear war over a penny you see lying in the street.

                  The credit card companies would have to be acting as a cartel for that to work, and unlike the ISPs, credit card companies do not have local monopolies they can exploit, so if they try to block Patreon, people who like the service can plausibly just switch cards.

                  They don’t really have to act like any more of a cartel here. They’d already have to be engaging in some implicit coordination to make bribing the ISPs work (otherwise, one credit card company is paying every body else’s share of the bribe), and the threat to Patreon of losing one available company (not everybody will switch-some will just walk away because “Stupid Patreon isn’t accepting American Express”).

                  If you’re ignoring the kinds of risks and costs that the ISP bribing requires you to ignore, then it’s totally worth a single credit card company giving it a try, and if they come out ahead on the deal then the others can follow without an hard colluding going.

                  We’re not talking about anything illegal here

                  That’s questionable if they’re colluding. Besides, it doesn’t have to be illegal. The PR costs alone are higher than this is worth. If you use a different credit card to buy groceries this month because they were caught fucking with your Patreon, then they’ve lost money on this deal.

                  While I still have no particular evidence that this is actually happening, you aren’t making the compelling case against its plausibility that you seem to think you are.

                  Your refusal to be compelled is still resting on refusal to properly consider costs and incentives. The problem here is that you’re letting the assumption of purely malicious intent determine what you think the companies will do, then trying to justify it afterwards. You can’t reach the same conclusions if you’re being realistic about what’s in their self-interests. A company that makes billions of dollars a year in revenue is not going to pay $1,000,000 in bribes to make an extra $1,100,000 in revenue when it comes with the risks of blow up the whole system.

                  • Locke says:

                    Not if they’re spending twice as much as their gaining. You can’t ignore costs, both directly monetary (bribes) and otherwise (people longer using their services).

                    …So? Like, you seem to think you’re making a counterpoint here, but you’ve only got the first half of one. You’ve skipped the part where you actually point to some evidence that the costs would actually be higher than the potential profits. Taking an order of magnitude larger cut from about one third of the $150,000,000 processed by Patreon each year is over ten million dollars in increased profit, which is more than they make taking 5% of all Patreon donations (which would come out to 7.5m). That’s 0.75% increase in annual profits for Visa – if the payment to the ISP was one-time and they assume Patreon will keep the current system without ongoing threat (reasonable) then it’s pure profit starting in 2019. Scrounge up a dozen more opportunities like that and they have 10% growth, which is a pretty damn good thing to be able to report to your investors. Now, they’re splitting an unknown amount of those profits with competitors, but “I assume unknown variables have made this impossible” is not a counterargument.

                    Precedent isn’t going to help them if the government changes the rules.

                    Precedent means that more drastic changes are required in order to permit or prohibit something. ISPs benefit if consumers must persuade Congress to pass a law regulating them rather than the president just having to appoint a new FCC head to put them back on Title II. ISPs even benefit if the president has to appoint an especially pro-neutrality FCC head to reverse lots of precedent rather than a generally pro-neutrality FCC head who might be unwilling to overturn lots of entrenched policy. Your argument here is “precedent won’t help them if we assume precedent fails to help them.”

                    Patreon is part of the service that they’re selling. The more sites they block, the less valuable that service is.

                    Are you really trying to assert that Patreon is the big ticket, make-or-break item they’re going to be offering high-tier customers access to? How many people do you think are out there who are waiting to hear whether or not Patreon is included in a higher tier package before they upgrade?

                    Tragedy of the commons doesn’t apply here, because there’s no finite resource that’s being exploited.

                    While there is in theory an essentially unlimited number of online payments to threaten to block if they don’t play nice, ISPs have limited patience to actually do so. Despite your bizarre assumptions to the contrary, a relatively very small number of people care about Patreon all that much and are not going to upgrade package deals, let alone move to a more competitive neighborhood, in order to get access to it. However, if they’re blocking dozens of medium-size websites, then they actually will see a drastically decreased number of people willing to pay for higher tier packages, because huge holes have been shot in the internet even at higher tiers. So, yes – websites being blocked is on the table, there are a finite number of websites ISPs are going to be willing to block before they start doing actual harm to their higher tier services, and companies benefit from getting sites blocked while that’s still something ISPs want to do in order to entrench their legal ability to do so. It’s only a buyer’s market until a couple of people buy.

                    Plus, putting Patreon into an expensive and high-tier package is, by itself, about as good as blocking it, because the vast majority of people so affected won’t pay for it anyway, so if your argument is “they can’t block Patreon because they want to put it into a high tier package,” then your argument is “they can’t block Patreon because they want to block 90%+ people from Patreon.”

                    otherwise, one credit card company is paying every body else’s share of the bribe

                    Why does “credit card companies form illegal cartel with sole goal of threatening to shut down Patreon” strike you as the more immediately plausible interpretation of my position, rather than “a single unknown credit card company makes perfectly legal business transaction?” You’re happy to point out on one end that credit card companies make billions of dollars, but now suddenly they’re so poor they need to pool resources?

                    They don’t really have to act like any more of a cartel here.

                    You say this, but then you spend a paragraph explaining the implications of this assumption and not why you think it’s true. Credit card companies who try to block Patreon individually stand to lose business. An ISP does not in areas where they have a monopoly, because that’s what a monopoly is.

                    That’s questionable if they’re colluding.

                    Collusion is, by definition, illegal cooperation. Again, your argument is “you’re wrong if we make the assumption that you’re wrong.”

                    Your refusal to be compelled is still resting on refusal to properly consider costs and incentives.

                    Quit being a jackass about this.

                    The problem here is that you’re letting the assumption of purely malicious intent determine what you think the companies will do, then trying to justify it afterwards.

                    And stop trying to tell me what my own motivations are. Or, if you absolutely must, at least make some effort to connect those presumed motivations to anything at all that I’ve actually said, rather than, I guess, just assuming that nobody could ever assume that credit card companies may have had something to do with a turn of events that benefited them at the expense of all other involved parties unless they believed that said companies were crafted by the Devil himself to bring suffering to the mortal world.

          • Cubic says:

            “Who, exactly, benefits in terms of control over the internet from reclassifying Patreon as a monetary services business?”

            Skipping the internet part, I assume it’s the government who want to keep track of businesses that transfer money, with the War on Terror and all that (hey, didn’t we win that? and why is it still such a pain to fly?).

            I also guess that being in compliance with all the regulations is expensive, which is why Patreon doesn’t want to be there. Perhaps you have to be at a certain size to be able to afford the required department of very serious people.

            • Bloodsquirrel says:

              That’s why this theory doesn’t make any sense. There are a lot more plausible reasons why the government would want to push regulation in this case than something something internet lockdown. Hell, the government barely even needs a reason to regulate things. It’s the nature of the government to want to expand its power.

            • Meriador says:

              We didn’t really “win” the War on Terror. We “won” the Iraq War, for a certain definition of “won,” but the War on Terror is a lot more nebulous than any particular war, and Syria alone is more than enough to keep it going. But that might be straying into politics to go into detail about that.

              • The Rocketeer says:

                What the hell happened to the commentariat on d20? For eons, there was polite acquiescence to just shut up about the nakedly political, which gets oxygen literally everywhere else. Now, every single post has to devolve into a communal polemic tirade on the proper limits of government regulations, and now whether or not we won the frickin’ War on Terror? Starting 2018, is it all just going to be Calvinism versus Albinianism and the ethics of abortion in the case of consensual incest?

                • Cubic says:

                  If Patreon is CRUSHING content creators and patrons because of financial regs, it does seem relevant to discuss them. Cool it with the comment policing, it’s like three or four out of two hundred that even mention Albigenisianism.

                  • Locke says:

                    The Rocketeer didn’t respond to a comment about that, though. He did mention it, but the comment to which he was actually responding was a tangent about the War on Terror, and if talking about financial regulations leads, in the space of just a few comments, to posts dedicated solely to the War on Terror, it’s reasonable to mention the thin end of the wedge. It’d be reasonable to set the brake on your slippery slope after “things that directly affect Patreon, which therefore directly affect this site’s ongoing viability” but before “totally unrelated political subjects,” but even in that scenario it’s worth pointing out that this brake has failed and we ended up talking about totally unrelated political subjects anyway.

                • Meriador says:

                  Sorry. Just saying it’s still relevant. I’m not trying to forward any agenda here. I’ll be quiet now.

    • Cubic says:

      You don’t have to involve net neutrality or the internet to be taken aback at the financial regulations.

      For USians, try making multiple money transfers just below a certain arbitrary limit, and see whether you get charged with a crime by the IRS, or maybe your account just gets frozen for some months or years. The rabbit hole is deep.

  19. Primogenitor says:

    “Anniversary every month”

    I’m tempted to sign up on December 31st just to see what happens over the course of a year…

    • Will says:

      Most likely, it will turn the 29th and 30th into “last” on months with fewer than 31 days.

      However, as an interesting programming-related aside, I would not be surprised to see it bill 31 days after the start of the month, e.g. on May 1 for April, or March 3 (or 2 on a leap year) for February. This is not unprecedented behavior in date-handling libraries (some Javascript implementations behave this way, for instance).

  20. Supah Ewok says:

    Hey Shamus, I haven’t been able to access the forums for the past week. I get this error:

    Illegal use of $_COOKIE. You must use the request class or request_var() to access input data. Found in /home/shamusyo/public_html/forums/cache/twig/1b/1bd3f65adc4a23e36b1606f4cc44e2cfbb19e77e6f5aecca70480c12abd1fe30.php on line 1. This error message was generated by deactivated_super_global.

    This is in Chrome. On Firefox, I’m able to get into the forums without being logged in, but the moment I do, I get the same error.

    • Daemian Lucifer says:

      I got the same error.After a bit of testing I have concluded that this is tied to the mail I used to register.So either my mail was banned,or there was a security breach that blacklisted it.Seeing how its a hotmail account that I rarely use,my guess is the later.

    • Shamus says:

      I’ve tried doing a repair on the dB table, which is the only thing I know to do in this case. Any change?

      • Supah Ewok says:

        No, there’s been no change whatsoever. Is there any other information you’d like me to provide to try to help? (I’ll be away for a few hours, so it would take me a while to reply with said info)

        • Daemian Lucifer says:

          Ill save you the trouble:
          Its the same regardless of browser or IP.If you delete your cookies,youll be able to get in with no problem,as long as you dont log in,or you log in with a different email.

          • Supah Ewok says:

            Well, then I guess prepare for Bizarro Ewok on the forums.

            • Supah Ewok says:

              Wow. So. Um. Maybe a datapoint, but I set up a new account with a new email, made a post, uploaded an avatar, and then I tried to set the board theme back to dark (I think it’s called Digi), got the “settings been updated” page, clicked whatever confirmation button there was, then got hit by the same big ol’ error page.

              Correlation? Or coincidence?

              • Supah Ewok says:

                Okay, sorry for the repeated comments, but I keep mucking around with it. I opened up a third account that did not make any posts. I broke the site (by which I mean I got the same error) from attempting to access the site’s FAQ while logged in. However, I was able to back out of that. I then tried to change the background to Digi again, and that borked that account. I then tried to log on to my second account, and couldn’t get anywhere with it.

                So whatever it is, using the dark theme definitely permanently locks me out of my account. Trying to go onto the FAQ borks just that page.

                Edit: Also, to be clear, my first account was on Digi before this stuff started happening.

                Also also, the forums won’t let me enter with HTTPS, I get a “site is not secure” roadblock from Chrome.

  21. Charlette says:

    There’s also the possibility that something nefarious is going on, like Google is about to launch their own subscription crowd-funding service and they are twisting arms to edge out the competition.

  22. Dev Null says:

    Thanks for explaining all of this.

    I read the notice from Patreon, and got that it was going to cost me a bit more to be sure that you got my paltry donation. I was fine with that. What I didn’t get was that they were going to break all of my donations up into separate transactions, with the bank tacking on their per-transaction fee every time. That’s awful.

    Do we know if all the donations on a single day will share a transaction? I’d be happy to cancel all of my donations and then re-enact them on the same day. Or is there a way in Patreon for me to donate annually instead of monthly?

    Essentially, I’m fine with paying a bit more for you to get a bit more, and I’m fine with Patreon getting their cut, but I’m looking for how to minimize the bank fees, because they get plenty of my money already, thanks. Any suggestions on how to best work the system would be very welcome.

    • krellen says:

      As-stated, every single pledge will be a single one-to-one relationship to the creator. If you have a dozen pledges come through on the same day, you’ll get a dozen separate charges and a dozen fees (and likely trigger many banks’ fraud protection service.)

      • Viktor says:

        Yeah, I want to continue to support people and even up my pledges, as I’m financially able to, but that possibility has me horrified. I do NOT want to have to call my bank, and doing it monthly in my extremely limited spare time is a good way to make me drop my patronage completely.

      • Khizan says:

        Triggering fraud prevention due to multiple $1 transactions is definitely a risk, yeah.

        It was my first thought when I read about the change.

  23. Redrock says:

    Hmm. Considering the backlash, I’d be pretty surprised if Patreon didn’t go back on that decision and come up with a different system. Otherwise, I’m afraid, the service is as good as dead. It’s not all that difficult to come up with a Patreon clone – not like the idea is patented in any way or technically complex. And a lot of creators will switch on pricnciple, even, I think, some of the bigger ones. Jim Sterling, for one. I may not always agree with the guy on the whole “evil corp” thing, but I’m pretty sure he would go out of his way to maintain his integrity and take the most pro-consumer stance possible. I’m sure some other well known creators can drop Patreon with relatively few losses, and gain reputation and karma points in the meantime.

    • PhoenixUltima says:

      Kickstarter already has one in the works (called drip, I think?). And, surprise, a lot of people are talking about moving to it if it turns out to be worth a damn.

      So yeah, not only are Patreon shooting themselves in the foot with this move, they’re also opening the door for an already mainstream company to swoop in and steal all their ex-customers. 10/10 epic failure, would watch them flail around like idiots again.

  24. krellen says:

    A note on Hank Green’s take: he’s not only a “big creator”, he’s financially invested in Patreon. When Patreon bought out his Subbable service, he got a stake in the company.

  25. PhoenixUltima says:

    Between what I’ve been hearing on twitter and this post, my takeaway is that the people running Patreon are either massive idiots, or blatant con men. And you really shouldn’t trust either with your money. Even if they walk these changes back at some point, they’ve proven themselves to be unworthy of anyone’s time.

    (I say this as someone who has never used Patreon, on either side. So it’s possible I’m missing something, but this really does look like either incompetence or malice.)

  26. Dreadjaws says:

    I was hoping for something more along the lines of “This is not the response we expected. We’re not going to enact this policy on December 18. Instead we will push this plan back until we’ve gathered more feedback and had a jolly good think about it.” I mean, I’m not even asking for an apology. Just stop doing this obviously destructive thing before you do any more damage.

    This is not just a problem of greed. It’s absolutely nonsensical. As you point out here, this is unmistakably destructive, so it’s insane that they don’t see it. We’re not talking about a company like EA, who they figure can get away with the Battlefront II BS because they’re the only ones allowed to use the license. Patreon might be the most popular venue for supporting creators right now, but it’s not the only one, or even the first. This is suicide.

    This is, like I mentioned elsewhere, akin to the situation with the Xbox One launch. Sure, Microsoft might had been able to get away with it if they were the only console available, but they weren’t, so of course they had no choice to backpedal or they were done. And even after they reverted those changes, the damage was done. Many people turned away from them, never to come back. Some of them before the changes and some of them after, when Microsoft showed they lied about those changes not being possible.

    There’s a chance that this is just a miscalculation, but it doesn’t excuse the fact that after literally everyone has pointed out to them how terrible this decision is they haven’t moved an inch to cancel these changes before they happen. The more time they spend ignoring the backlash, the worse it’ll be for them. I haven’t canceled any of my pledges yet, but on the day before these changes are effective I will review the situation. If I can find a better alternative for supporting the creators, I’ll take it. I will not simply stop giving them money, but I won’t support this situation.

  27. Lame Duck says:

    The thing that makes this seem sinister rather than merely incompetent is the claim that creators will be getting 95%. That is such a profoundly dishonest way of presenting the numbers and, to me, screams that someone knew people would not like this change and they were looking for some trick to spin it in a positive way.

  28. Droid says:

    Hey Shamus, unfortunately I had to delete my pledge, since I believe that is the better move long-term, even if it might hurt a lot short-term. But you said you’re okay with that.

    What I want to apologize for is the fact that I got off on a bit of a rant against Patreon in their feedback form and hit “send” before realizing that the feedback probably only gets sent to YOU and not them…

    • Blake says:

      I also deleted all mine (was only a dollar or two to Shamus), on each one it asked why I was deleting my pledge and one of the options was something like “I am not happy with Patreons service”, which I clicked each time.

      If they go back to a single transaction approach I might repledge, but for all my little micropledges I couldn’t justify it. It was also partly a protest thing against Patreon because there needs to be immediate impact for them to quickly course-correct.

      I’m not against having the credit card fees as an addition to the pledge instead of a part of it, that’s not unusual to go to pay for something online and have it say “Hey it’ll be an extra $.30 to your bank here”, and then it provides more certainty for all the creators. But the separate transaction thing where it hurts you more the more you use the service is lunacy.

      • Sleeping Dragon says:

        I am absolutely not criticizing or trying to shame you because we are each responsible for our financial decisions, and I do realise Patreon may take this as a wrong message but I’m going to keep my pledges going because I can, for now at least, afford the extra fees and I think with so many supporters leaving the creators will need that money more than ever.

  29. Lanthanide says:

    Haven’t read any of the other comments. Was going to post this a few days ago but there wasn’t any appropriate story for it, but this one fits exactly!

    According to the theory, small-time losers like me aren’t really that valuable, and this change was designed to get us to take our small army of $1 donors and sod off, while leaving more money for the big dogs.

    Actually Shamus, at $1,777 per month you’re in the top 2% of all creators on Patreon, according to this article:

    Of those creators, only 1,393 — 2 percent — make the equivalent of federal minimum wage of $7.25 an hour, or $1,160 a month, in October 2017

    https://theoutline.com/post/2571/no-one-makes-a-living-on-patreon

    • Viktor says:

      (If that number is accurate and doesn’t include the mass of $2 a month Patreon pages that have been abandoned or never officially launched that naturally clog up any service) That points out 2 problems. One, the federal minimum wage is laughably low, and 2, even for large creators a large number of $1 pledges form a bulk of their donations. Does Patreon not realize how important those small donations are?

    • Dreadjaws says:

      According to Shamus’s Patreon, though, he’ll reach minimum wage (after taxes) if he reaches $1,800 a month. So, unless I’m misunderstanding something here, he’s not actually there.

      • evilmrhenry says:

        Regarding the difference between $1160 and $1800:
        1) Shamus is presumably recognizing that Patreon takes out fees. The article should really have added the Patreon fees on to their number. An extra 10% should cut it, bringing it to $1,276/month.
        2) Shamus presumably lives in a state with a higher minimum wage than the federal version, and is referring to the local minimum wage, not the federal.

        • Shamus says:

          I’m going by federal minimum wage. HOWEVER, since I’m self-employed, the fed takes a huge bite of my income. Like, it doesn’t matter if you live below the poverty line, if you’re self-employed then you pay rich-people taxes. (In the neighborhood of 30%)

          So in order to actually take home the same as the guy sweeping the floor at McDonald’s, I need to make quite a bit more.

          So yeah. Pretty frustrating. The bank takes a nice big bite. Then Patreon takes their 5% of what’s left. Then the federal government takes 30% of what’s left. Then my local government takes 1% of what’s left. Everyone wants their cut.

          • EwgB says:

            It’s funny how 30% is “rich people taxes” in US. I live in Germany, not self-employed (here they also pay more). After taxes (41% effective), social security and healthcare (all mandatory), I’m left with barely above half of my wages. And I’m nowhere near being rich, though I am above average income in Germany.

  30. Huh. See, to me, being charged $1.38 for a $1.00 donation just feels like sales tax (kinda high sales tax, but still). I like the extra transparency of KNOWING just how much the transaction fee ACTUALLY IS.

    Yeah, okay, the recipient gets a smaller “percentage” of what I’m paying. But they get a larger *absolute* amount, because I’m paying the fee instead of them.

    But I prefer to do my support for people in big chunks, anyway.

    • Droid says:

      You could achieve the same effect (even better than that) by just donating 1.38$ in the current system. You lose 1.38$ either way.

    • Zak McKracken says:

      Well, the whole premise of Patreon was to allow people to pay 1 Dollar per month to 100 people without the annoyance of having to pay 100 transaction fees — to maximise the fraction of money that patrons are willing to spend which ends up on the creators’ accounts.

      This way, you might as well just put a dollar in an envelope and mail it to creators…

    • Blake says:

      I agree with the transparency thing, but that 38 cents should be charged to you once per month not once per pledge per month.

      I’d like my ‘donate $1 to person X’ mean that person makes $1 (even though it’ll still only be $.95 in the current scheme), but the separate transaction thing means that every one of my $1 pledges suddenly rises by 30% with the banks making all the extra not the creators.

      I think what you pledge on a persons Patreon should be the final amount they get from you, then once per month you should be charged all that plus Patreons 5% cut plus your bank fees which should all be clearly laid out to you on your account page.

      • That would make sense to me.

        They could just set it up so that instead of doing 10 individual $1 subscriptions, you just BUY your subscription in larger chunks (like, if you want to do $50 per month, you buy a $50 per month sub). Then you can ASSIGN OUT all the funds that you have to creators, dividing it up however you like. You PAY $50 plus fees. This would probably encourage people to buy bigger lump subscriptions because they’re paying a smaller percentage in fees that way.

        This would, coincidentally, discourage that whole “buy a sub for one day to get the free stuff” issue, because you’d pay BEFORE you could assign your subscriptions out. Yeah, they could refund you–but they’d keep the transaction fees.

        • djw says:

          See Jeremy Bower’s link many posts above this one. If that blogger’s guess is correct then the subscription plan would likely run afoul of some horrid regulation or another. Would be nice if it worked though.

          • If you can’t name the regulation, this is a load of poo. Heck, I PERSONALLY subscribe to a service that does EXACTLY this–you pay a monthly subscription and you get “vendor cash” to “spend” at the “store”.

            Patreon could aggregate all the points and then pay them out monthly. So you’d have ONE transaction fee each way every month–one on the patron’s side, and one on the creative’s side.

            I’m surprised they haven’t come up with more creative financing options, too, like how about Patreon Gift Cards–you can buy someone a gift card, they can apply it to their account, and assign all the “points” to whoever they like. (It’d be a one-time donation, not a recurring one). That’d be a fun thing to do for people who are really hard to shop for.

            I find it kind of bizarre that Patreon itself is an attempt to creatively solve a problem. The total lack of creativity here makes me think that the credit card companies put their foot down or some such nonsense.

    • Sleeping Dragon says:

      I think think the tax approach is something mentality related, like most other Europeans (as some people discuss above) I’m used to having all the fees included in my pricetag. The transparency is definitely nice, especially since few creators actually feel comfortable discussing financial specifics (Shamus being one of the few exceptions) and I personally think it benefits literally everyone involved if supporters know exactly what the supported is getting.

      Right now the most obvious problems are the effective 40% increase in cost on the 1$ donations and the somewhat knee-jerk* reaction of people dropping their pledges en masse which can break a bunch of creators financially. I only support a few creators so my expenses won’t change much, I also fully admit that all but one people I support actually have paywall locked content so I don’t want to loose those benefits. That said if the people I support find/decide on alternative channels (as some of them declared they intend to) I will keep that in mind, and that in turn makes it less likely that I’ll support other creators through Patreon in the future.

      *Not for me to judge but I do believe if you can afford a 20$ donation monthly than the extra 1$ should not be a dealbreaker. Though again, every person is the guardian of their own wallet.

      • For most people it’s not the expense but the “principle of the thing”. People calling in at Amazon used to complain about that all the time, and I was like, “what principle, you’d rather waste $30 of your time which you’ll never get back to get a $2 refund? So the principle we’re talking about here is you being stupid?”

        IIRC Benjamin Franklin described this kind of behavior as being “penny wise but pound foolish”.

        • Richard says:

          Someone backing 10 people at $1 a pop is now $3.80 worse off, per month. $45 a year.

          To put it another way: Everyone backing at the most popular $1 level is now being being demanded 38% more than they used to pay.

          A 38% price increase announced with that short a notice is straight-up illegal in the EU.
          Of course, (most of?) the US doesn’t have similar consumer protection laws.

          – Incidentally, phoning a retailer like Amazon costs them considerably more than it costs me (they have to pay someone to answer that call), so when a supplier does something I really do not like I want to make sure that it costs them – so maybe they won’t do it again.

          • Richard says:

            Oops. They are $4.09 worse off per month.

            Shouldn’t do that kind of maths in my head.

          • So, you’re telling me that you make less money per hour than the person in India or Jamaica who fields your call?

            This kind of thinking is a result of people not understanding how to value their time.

            • Nessus says:

              That’s assuming they’d be drawing a wage for whatever they’d be doing at that moment if they weren’t calling, which is a frankly bizarre assumption. How much do you get payed to wash the dishes at home? How about playing a video game, reading a book, posting comments on blogs calling people dumb for not doing a purely money-based opportunity cost analysis for use of time that’s not making them money anyway?

              “Time is money” only applies like that if they’re actually taking time off from their job (or other revenue gaining activity), which most people aren’t doing. They’re doing it in their off time. Their opportunity cost is measured in potato chips not eaten, or net stress loss/gain, or some other factor you don’t have the intel to analyze from your end of the call.

              Even rich people who obsess about minmaxing gains regularly do things in their personal life that incur net losses for the sake of personal satisfaction.

        • Dreadjaws says:

          “what principle, you’d rather waste $30 of your time which you’ll never get back to get a $2 refund? So the principle we’re talking about here is you being stupid?”

          The thing about “principles” is precisely putting morals in front of material stuff like money. So no, I would never consider this “stupidity”.

          Plus, you’re outright ignoring the main problem here, which is separating each transaction cost. Sure, the transparency is fine, the fact that creators get a larger chunk (or they would if the system worked perfectly, which it absolutely doesn’t) is fine, but charging the transaction fee every time rather than once a month like before benefits no one but Patreon itself, and it’s something they don’t bother to mention (so there’s not a total transparency here).

          • You have to actually READ MY POST to grasp that I’m talking about AMAZON CUSTOMERS not this particular Patreon boondoggle. I don’t have a lot of specific interest in this PARTICULAR issue. I’m talking about a GENERAL issue that comes up in MANY CONTEXTS where people are willing to waste what works out to be a large amount of money to “save” a pitiful amount of spare change over some “principle”.

            Not all principles are MORAL principles. There are principles of housekeeping, public speaking, writing, opening tightly sealed jugs . . . etc. “Squeeze every penny until it screams, even if the opportunity cost of doing so is hundreds of times greater in value than the savings” is not a MORAL principle. It is a FINANCIAL one, and a STUPID one.

            • Nessus says:

              It’s not a financial principle. Dreadjaws already said that explicitly. It’s not about the specific $2, it’s about sending a message to Amazon not to do the thing that incurred the refund request. It’s herd immunity behavior: by taking time out to make this gesture, they’re hoping to help prevent the same issue from happening again, not just to themselves, but to any number of other customers.

              As a herd immunity behavior, if, say, 100 similar complaints can prevent the same thing from happening on 100,000 future transactions, then it’s worth each of those complaints costing 10 times the refund amount. This is the underlying logic behind the instinct to press such issues “on principle”.

              …And if they’re calling in their free time (or their job is salaried), and there is no actual financial opportunity cost on their end, then your whole argument disappears anyway.

  31. Zak McKracken says:

    The thing that annoys me most:
    Every year, around Christmas, I promise myself I’ll finally do it and get on Patreon despite my aversion to collecting user accounts with internet companies. Now, Patreon has already delivered the argument that will keep me from doing it this time.

    • Echo Tango says:

      Just donate Shamus once a year with PayPal. It’d be about as much hassle, but wouldn’t be many small fees eating the donation money. :)

      • Zak McKracken says:

        Yeah … I’ve been trying to steer clear of Paypal too, actually I’d much rather have a Patreon account than a Paypal one … if Patreon could maybe not do the thing that would invalidate what I’d be doing with it…

  32. Bloodsquirrel says:

    On the other hand, Patreon apparently took a bunch of venture capital money, and VCs generally expect a return on their investment. Look, there is a time and a place for VC money. If you’re making a new gadget and you need a bunch of cash to get manufacturing started, then VC money can be a good option. But if you’re you’re trying to crowdsource some sort of hippy-dippy system of helping people to get paid to write fanfiction, draw pornographic furries, or write insane novel-sized rants about five year old videogames, then I don’t think your goals are going to align with the goals of your typical venture capitalist.

    This is the kind of business that a venture capitalist would love. It’s got a clear and stable monetization method- they charge a flat fee on transactions- and if run competently it should have low and predictable operating costs with minimal risk. Patreon is kind of like a money transfer or currency exchange business. It’s simple, dull, and runs by the rules that they’re used to trafficking in.

    Digibro made a video about Patreon a while back where he complains about the people running Patreon being more concerned with trying to turn it into a social media site than with being the banking service that it’s really supposed to be. This sort of runs contrary to what the suits would want- they’d focus primarily on the part that makes money.

    I think assuming that “enthusiastic creative” == “idealistic benevolence” is dangerous. Plenty of hippie types have turned into ruthless businessmen once they were in a position to. George Lucas and Steve Jobs are good examples. Jack Conte might come off as a genuine guy in a video, but’s a skill that any good con artist learns. It’s also really easy for people like Conte to develop really, really big egos.

  33. By the looks of it (didn’t do the math), Patreon now costs the same as Paypal currency conversion + 5% patreon overhead?

    Considering that you can do subscriptions via Paypal, and that if the sender and recipient both have Paypal “wallets” in the same currency, and the recipient does not have a merchant account, then there is 0 (zero) fees transferring money from say you to Shamus’s paypal account.

    Shamus, could you make a Paypal subscription button?
    For a dynamic value that supporters can enter themselves requires a little more work than normal buttons:
    https://www.paypal-community.com/t5/Recurring-Payments-Billing/Custom-Recurring-amounts/td-p/1184190
    “Remove code protection” is not an issue as in this case you actually want the user to manipulate the monetary value.
    That form code is not large and should not bloat your webpage code much really.
    Visually it can be very subtle as well, you’ll just show a subscribe button followed by a input field for the value.

    Now I’m constantly broke so I can’t support you that way. But if I wasn’t I can tell you that I’d rather subscribe to you via Paypal than Patreon, as Patreon does not offer anything I want/need so why should they get 5% of the money I’d be giving “you”?

    PS! A regular Donate “button” should offer a “Make this recurring” checkmark during the checkout process somewhere, I can’t recall for sure though.
    So just a Donate “button” might be fine. It’s a shame Paypal.me do not have a interface for donations and subscriptions.

  34. SKD says:

    The reasoning behind this change reminds me of the times not too long ago when all stores had minimum transaction requirements in order to use a credit card at purchase (usually set at $5.00 in my experience). Or the ones that would explicitly add the transaction fee to any purchase under a prespecified amount. It discouraged using credit cards for small purchases like a pack of cigarettes or gum at the local convenience store or encouraged customers to pick up a few more items to put their total over the limit so they wouldn’t be “losing” money on the purchase.

    Nowadays we have soda and snack machines that take credit cards and I have to wonder who is eating the transaction fees on those purchases.

    • Richard says:

      In general, the margin is much higher with soda and snack machines.

      The prices tend to be higher than in grocery stores, and the cost of running the machine is lower.

    • Small shops around here (darkest Wales, admittedly) still have lower limits for card purchases. I can’t blame them!

    • Nessus says:

      I still see these sorts of minimum transaction policies from time to time. Never with chain places that are just small tentacles of a larger company, but with one-off small businesses, absolutely.

      I’ve never seen the credit card charge added to the total separately though. I have a feeling that would be unpopular, as regardless of the rationale, it would feel to the customer like a random “tacked on” charge, and they’d respond very unfavorably to it.

      • I have sometimes seen small shops add a surcharge for using a card to pay for something – usually if they have a lower limit but you insist on paying with a card anyway. So maybe a purchase of £5.95 won’t incur a charge but a purchase of £4.50 would have a surcharge tacked on. Shopkeepers are usually good about making it clear where the boundary lies (I haven’t looked into it, but I suspect it’s a legal requirement).

  35. Sniffnoy says:

    I’ve seen two explanations for this that make any sense. One is the regulatory explanation that Jeremy Bowers posted. But the bigger issue may be the one explained here by Siderea.

    In short: Patreon’s fee structure — the old one — means they rely on patrons paying a lot in order for them to make money. Note that it’s not about how much creators take in, but how much patrons pay (totalled across all creators they’re sponsoring). Specifically, on any patron who pays less than $14.29/month total, Patreon is losing money.

    And then on top of that there’s the potential regulatory problem…

    Anyway, I’d say more, but you can just read the link.

    • Daemian Lucifer says:

      Thats really interesting.The question is now:Are there really that many people that pledge less than $14 monthly that its worth for patreon to take this huge hit in order to deal with them?It feels to me that there are much more people who donate a buck to dozens of people who would stop donating now,thus leading to a big net loss not just to the creators but to patreon as well.

    • Bloodsquirrel says:

      Sidera’s math is a little goofy. $14.29 is only the point at which Patreon is making as much per transaction as the credit card companies. Patreon is still making ~71 cents on that transaction. Given that most of their costs should be fixed (the amount of processing power/bandwidth per transaction is pitiful) a large volume of low-margin pledges shouldn’t hurt them.

      • evilmrhenry says:

        The point of the article is that apparently if you have a Patreon account that just pledges $1 to a single person each month, Patreon will send $0.90 of that to the person, even though it took them more money than that to process the payment.

        I find this dubious. I don’t see any mention of “by the way, we only charge 5% for payment processing” anywhere, and that still doesn’t explain why they’re splitting up the pledges, which is the part that doesn’t make sense without a legal requirement to do so.

  36. One comment I saw that makes a lot of sense, is that Patreon is probably gearing up for an IPO. They reign in adult content and then restructure the payment system to something that’s easier to explain to investors. Smells like appeasement.

    • Redrock says:

      Huh, that could be it. But still, a PR nightmare like this isn’t a good way to prepare for an IPO. And still betrays a deep lack of understanding of their audience, which isn’t a good look however you slice it. So no matter how I look at it, I can’t for the life of me figure out what Patreon was thinking.

  37. Zaxares says:

    So basically it seems like Patreon is tired of absorbing the bank fees for all those little transactions. Makes sense; I’d be frustrated myself if over 30% of my annual income was going to fees. Still, I don’t think that this change will really fix the issue. By passing the cost to consumers, you’re basically only guaranteeing that customers will stop using your business. Perhaps what they should have done is increase the cut they take from donations, explaining that they are doing this in order to finance the bank fees they are absorbing. Sure, people will grumble about the change, but it also deflects the criticism from you and onto a third party. (And nobody likes the banks already in any case.)

    The other point I wanted to comment about was the one about people who pledge a donation, download all the content, then cancel their pledge. I would agree with Shamus that this is basically the “Pirates vs DRM” conflict all over again. And my take from that issue is that it is a futile battle to try to get pirates to pay up; they either cannot or will not pay. If they cannot get the content they want for free, they will just find some other free content to pass their time. They never have, and never will, pay for your stuff.

    • Richard says:

      This isn’t merely “passing the fees onto the customers”, and Patreon were never absorbing the fees in the first place.

      This change is:
      “We decided to increase the credit card fees by at least an order of magnitude, then pass these new unnecessary fees onto the customers
      “Oh, and while we’re at it, we’ll also increase our operating costs.”

      If they only rearranged to pass the existing fees onto the patrons, that would be understandable.

      Worked example (I’m not sure on the current order-of-operations so I’ve assumed Patreon takes the most money possible)
      Old system:
      Customer subscribed to 10 creators at $1 each.
      Customer pays $10.
      Of that:
      – Credit card takes 0.38 + (2.9% * 10) = $0.67
      – Patreon takes 5% * 10 = $0.50
      – Creators get $0.883 each.

      New system:
      Customer subscribed to 10 creators at $1 each
      Customer pays $1 + 0.38 + (2.9% * 1) = 1.40, ten times = $14.09
      Of that:
      – Credit card company takes $4.09
      – Patreon takes 5% * 10 = $0.50
      – Creators get $0.95 each

      If they had actually done “Pass costs to customers”, it would have been:
      Customer subscribed to 10 creators at $1 each.
      Customer pays $10 + 0.38 + (2.9% * 10) = $10.67
      Of that:
      – Credit card takes $0.67
      – Patreon takes 5% * 10 = $0.50
      – Creators get $0.95 each.

      The winner here is the credit card company.
      Patreon still take 5% of subscriptions, except now they have much higher operating costs – an order of magnitude more transactions must require considerably larger back-end systems to handle them.

      No customer is going to be happy about a 40% price increase, and most will drop some or all of their patronage.

      Most customers probably would have been ok with a 7% price increase.

  38. PPX14 says:

    I don’t understand – is the $1 donation percentage going to creators not actually going up?

    Previously $1 donation = $1.00 (paid) – $0.35 (cc fee) – $0.03 (cc cut) – $0.05 (P cut) = $0.57 (creator) / $1.00 (paid) = 57% earned vs paid

    Now $1 donation = $1.38 – $0.35 – $0.03 – $0.05 = $0.95 (creator) / $1.38 (spent) = 69% earned vs paid as you say.

    OHH

    But if $1 still paid by the donor = $1.00 (paid) – $ 0.35 (cc fee) – $0.02 (cc cut) – $0.03 (P cut) = $0.60 = 60% earned / spent

    The “donation” here is $0.63 in order for the donor to pay $1.00 total, hence the smaller credit card cut and Patreon cut, which are percentages of the “donation” value.

    That’s still a small increase? (Other factors notwithstanding)

    • Matt Downie says:

      I think the deal is that people who volunteered to pay $1 a month are now being charged $1.38 a month?

    • Dreadjaws says:

      The issue is that now you’re charged a fee for every transaction. So before, if you paid 10 creators you’d be charged a fee only once. But now you’re charged that same fee 10 times.

      You have to redo your math and you’ll see that if a patron pays the same amount of money to those 10 creators now they’ll all be getting a decreas in payment.

  39. mwchase says:

    Patreon did themselves no favors by leading with the fee changes, like that was the main thrust of things. I read about that, and not the scheduling changes, and assume the idea is a greedy and short-sighted attempt to capture the value of batched payments (their unique selling point for many) for themselves. But apparently the scheduling changes came first. Then they couldn’t batch payments, so they “had to” find some way to deal with the increased transaction fees. So, now that they’re not getting economies of scale from their billing structure, they decide to slap a band-aid on it by passing all fees to the patrons. This sort of looks like “more money” coming in because everyone’s getting a bigger cut of the sticker price, but if we assume that the money patrons pay in is basically flat (Patreon seems to be assuming they’ll keep the sticker price the same, and the reality is that many patrons will probably pull out entirely), then they’re actually getting less money as a result, because the same money is spread over more transactions, which means more flat transaction fees before Patreon and the creators get paid. The only way they could hope to stave that off would be… by attempting to recruit creators into boosting their changes, in order to sell patrons on the idea of eating a bunch more transaction fees. What we see here is that the patient had weak skin, and the band-aid tore it, so the triage crew is adding more band-aids. In other words, this is far more short-sighted than it is greedy.

    Now, if we go from the assumption that they’re trying to be less like a bank, then the chain of justifications flips a little, in that they would have said “Okay, we can’t batch transactions any more, what does that let us do?” and then someone said “Well, we could personalize the payment schedules.” “Well, that sounds cool.”

    I looked into Drip, and it kind of sounds like they’re offering a choice between “access on a per-donor monthly schedule” and “payments per work, at the time”. So, I’m not clear that Drip could pull a Sony-style “we’re not them”[1], because they have exactly the same scheduling system. My guess is that they’d not pass on the fees[2], though (KickStarter doesn’t, after all), and would therefore push artists to a minimum pledge tier of, say, $5 or $10 a month[3], in order to reduce the proportional hurt.

    Reading articles on this let me know about some features I didn’t realize Gumroad had, like subscriptions. From a monetary perspective, creators might as well use something like Gumroad as nuPatreon, and it might be a better fit for some of their reward structures. Maybe we’ll see creators pulling out of Patreon as a platform, and just using it as, like, a payment portal that happens to have Discord integration.

    [1] I’m almost certain.
    [2] It seems likely.
    [3] I am spitballing wildly.

    • mwchase says:

      Okay, their announcement (linked below) about rolling back these changes makes it sound like the priority was indeed initial pledge workflow reform, and they assigned no value judgment whatsoever to aggregation (their word, probably better than “batching”? not sure).

      If that’s true, it’s sort of surprising from a decision-making standpoint, in that they were evidently unaware of the edge that it gave them over just making a PayPal subscription. They simply followed an attempted solution to its logical yet absurd conclusion, and never considered the business value of the tradeoffs. Also, if that’s true, then there wasn’t a regulatory concern. I was definitely willing to believe that there was a regulatory concern they weren’t ever mentioning, but they’re not saying whether or not there was one, in a way that has nothing to do with the question if read literally, but implies by omission that there was not.

      The fact that this blindsided them, especially the mass unpledges, kind of implies to me that, even though they’ve got a lot of raw data they could process, they’re not aggregating it and presenting it to the people making decisions. I mean, really, if you’re making a change that shakes out as “all patrons pay a mostly-predictable additional sum of money”, it would behoove you to grab the pledge data for the past year, plug the new fee schedule in for a random sampling of patrons, and get a distribution of cost increases.

  40. Grampy_bone says:

    Most people are unaware of the fees they pay to use convenient currencies. Every so often, stores try to put these costs on the consumer instead of paying them themselves. The result is always customer backlash. Always. That’s why you’re better off just raising prices. People don’t mind paying $2 for a candy bar but they’ll freak out over paying a 50 cent surcharge on a $1 candy bar. Go figure.

    Patreon should just raise the minimum donation level to $2 or something.

    • James says:

      I had a $2 donation set up for one creator. Because of the new fees, I tried to change my donation to $2.58 so that my credit card would be charged an even $3.00 after the fees (2.58 x 1.029 + 0.35 = 3.00). I got an error saying I couldn’t donate an amount between $2.00 and $3.00, with a suggestion that I donate at least $3.00 instead. Really? So I changed it to $3.55, which it allowed, and now with the fees it will come to $4.00 total.

  41. James says:

    Get ready for some math. Patreon claims you’ll now be getting a guaranteed 95% of donor contributions, but as you said, that’s a flat-out lie. Let’s say someone signed up to contribute $10. Patreon is telling you that you’re going to get $9.50 of that. Okay, that’s 95%… but the real charge to the patron is going to be $10 + $0.29 (2.9%) + the flat $0.35 fee, for a total $10.64. That means you’ll receive 89% of the patron’s full payment (9.50 / 10.64), not 95%.

    I’m not sure if you have a lot of small donors, but the situation is much worse for them. Someone who donates $1 is now going to be charged $1 + $0.03 + $0.35, for a total $1.38. That’s a 38% increase to the patron (yikes!) and you’ll receive $0.95 / $1.38 = 69% of the payment.

    The mathematical limit of what you could ever receive is .95x/(1.029x+.35) as the contribution (x) approaches infinity, which simplifies to approximately .95/1.029 or about 92.3%. The amount doesn’t hit 90% until the donation is $13, and doesn’t hit 92% until $97. After that, for all intents and purposes, you’re stuck at 92%.

    And, let’s say someone signs up for 3 contributions of $1 each on the same date. Is Patreon really going to charge the bank 3 times and incur 3 flat fees just for the sake of consistency? It would make so much more sense to keep combining the charges on the same date every month and charge that flat fee on a patron’s total donation, rather than on each individual dollar.

    As far as the paywall/piracy issue, there’s an extremely simple solution that requires almost no effort. Just move the first month’s charge up to the date of the initial donation, then charge all of the future donations on the 1st day of the month like they did before. For example – if I signed up today (December 11th) to give you $5/mo, charge me $5 immediately instead of waiting until January 1st. Then, schedule the second charge for February 1st as usual. Patrons would still get the “free” access period between their sign-up and the end of the first month, but they’d be making the next month’s donation immediately (and not have free access to paid content). Easy.

    • So patreon will basically drag off 11%?
      I just check using this calc https://www.shopify.com/tools/paypal-fee-calculator
      And Paypal ends up only grabbing about 6% (if donating 10 dollars).

      Now this is a creditcard transaction fee, etc. If transferring from paypal to paypal I believe paypal takes 0% (assuming sender and recipient accounts are both in the same currency)

      A worst case scenario is paying with a card in a different currency than the recipient. In that case the percentage paypal takes is closer to what patreon now takes by the looks of it.

  42. Flux Casey says:

    Thank you. I’ve been using this to explain to my co-creators how this is actual nonsense that doesn’t benefit us, our patrons or Patreon. Assuming they stay on this road, we’ll be finding other means. Maybe go old school with Paypal. Or check out Drip when that launches.

  43. Shamus, I’ve mentioned this before but maybe you should contact GOG and get a referrer id? That way when you recommend a game you can use your referrer id and get a few bucks through that. Just put “(Referral Link)” as part of the link text and nobody should have issues with you doing that.

    And make some merchandise. t-shirts, mousepads, mugs, etc. with Good Robot artwork maybe?

    And then there is the Amazon wishlist etc. (that’s still a thing right? And is there a steam wishlist as well?)

  44. Zak McKracken says:

    Here’s a thought: Does Patreon allow per-year pledges? Because rather than doing 1 doller per month, one could just pledge 12 per year, and that would make the transaction fees much easier to bear.

  45. Trix2000 says:

    I feel like I had the exact same reaction as you on this issue, originally thinking “Hey, it’s not so bad, people just can’t do the math” to “Hmm, this is actually causing significant amounts of people leaving” to “Actually hold that thought, this is actually causing everyone problems.”

    And I think your post has finally cinched my stance on it now, since I still wasn’t completely sure what I made of things. I had some hope that in the long run it might work out, that the dropoffs would be minimal… but it seems I underestimated the kind of ripple effects this decision made on patrons and creators alike.

    I won’t be cancelling any of my pledges – I’d rather not become part of the problem for creators, even if it is entirely justified – but it’s going to cost me the extra to do so… and I think if the people I support jump ship to another site I’m not going to take much convincing to follow.

    I only hope Patreon does ultimately realize they’ve underestimated the effects as well and change their mind. I have no idea if they will, but I think it’s possible.

    • Fade2Gray says:

      Ding, dong, the witch is dead

    • tremor3258 says:

      For now, anyway – how many patrons dropped away from support during this, I wonder?

      • Trix2000 says:

        Probably not anywhere near a majority, and I expect at least some of them will be back (though likely not all). While the losses were definitely significant, I suspect a majority either didn’t notice in time or decided to stick with it anyways for various reasons.

        The effect will probably last for a little while as creators take time to refill the lost patrons, but since the main sticking point is gone I think it will recover. At the very least, I think Patreon’s response demonstrates they understand what they did and that it was indeed a large mistake, rather than them intentionally trying to screw people.

    • Paul Spooner says:

      Just got the e-mail in my inbox. It’s hard to admit mistakes, so good on Jack for saying it unequivocally.
      I get the feeling that many of the problems that Patreon is having stem from their technical leadership. There are a few signs that there’s some web-tech philosophy nonsense going on. Their interface has always been weird, and I feel like it must stem from some kind of systemic blindness about the difference between “The One True Way” to program and “Doing the Right Thing”.
      No Shamus. You’re not allowed to write a post about this in the comments!

    • Olivier FAURE says:

      I didn’t expect that. Usually when a business doesn’t answer immediately to a controversy it means they’re just going to blunder their way forward, maybe propose “compromise” changes that don’t fix anything, and pretend everything’s fine.

      Glad this isn’t the case here!

  46. Congratulations!

    …for now…

  47. Jamey Johnston says:

    Here’s a nutty idea (stolen and slightly modified from TxTag, the central Texas toll road system):

    When you create your Patreon account, you are immediately charged an amount equal to a month or two of your various commitments, but with a minimum of $10. The credit card fee is added on top of this much like a tax (so maybe you’re charged, and clearly explained why, $10.65 or whatever). The creator gets their .95 or whatever you chose, and Patreon also takes out their nickel, but whatever is left just sits in your “account.” same day of the next month, creator gets their .95 and Patreon takes out another nickel. At any point in the future, when you are “due” to make a payment to a creator, if your account balance isn’t enough, the difference is charged, but again, with that $10 minimum.

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