Patreon Scraps New Service Fee, Apologizes To Users (theverge.com)

Patreon has decided to halt its plans to add a service fee to patrons' pledges, a proposed update that angered many users. "We're going to press pause," CEO Jack Conte tells The Verge. "Folks have been adamant about the problems with the new system, and so basically, we have to solve those problems first." The company plans to work with creators on a plan that will solve issues with the current payment system, but won't create major new problems in their stead. From the report: Conte published a blog post laying out the core problems, alongside an apology. "Many of you lost patrons, and you lost income. No apology will make up for that, but nevertheless, I'm sorry," it reads. "We recognize that we need to be better at involving you more deeply and earlier in these kinds of decisions and product changes. Additionally, we need to give you a more flexible product and platform to allow you to own the way you run your memberships. I know it will take a long time for us to earn back your trust. But we are utterly devoted to your success and to getting you sustainable, reliable income for being a creator."

Conte says that any new system will need to take the popularity of small pledges into account, and preserve the benefits of aggregation. It will also need to give artists more autonomy, rather than announcing a sweeping overall change directly to users. "The overwhelming sentiment was that we overstepped our bounds" with the non-negotiable fee, he says. "I agree, we messed that up. We put ourselves between the creator and their fans and we basically told them how to run their business, and that's not okay." Webcomic creator Jeph Jacques previously quoted Conte as saying Patreon "absolutely fucked up that rollout."

Comments

I have altered our deal...

[bobbied]

Pray I don't alter it further...

Re:I have altered our deal...

[DontBeAMoran]

Why not link to the actual joke?

Breach of Trust (A wound that doesn't heal.)

[sehlat]

They didn’t ASK. Instead, they simply said “All your wallets are belong to us.”

They forgot that trust, once broken, is damn near impossible to repair. I am reminded of an exchange in the British Parliament after Dunkirk, when an admiral was being upbraided for risking the fleet. The admiral replied, “We can rebuild the fleet in thirty years. We can rebuild the tradition in three hundred.”

I may check in on Patreon in 2317.

Re:Breach of Trust (A wound that doesn't heal.)

[tlhIngan]

They didnâ(TM)t ASK. Instead, they simply said âoeAll your wallets are belong to us.â

They forgot that trust, once broken, is damn near impossible to repair. I am reminded of an exchange in the British Parliament after Dunkirk, when an admiral was being upbraided for risking the fleet. The admiral replied, âoeWe can rebuild the fleet in thirty years. We can rebuild the tradition in three hundred.â

I may check in on Patreon in 2317.

Good for you. Now what are you going to do in the meantime?

Patreon could do these things as they're one of the top "tip jar" places on the web, and they manage things such that "creators" can offer donators special perks. All this managed on one convenient interface. Sure the creators could use Paypal, but then you lose out on the perk management.

So they did it, assuming everyone would see it this way.

They did explain later on what happened.

First off, they used to aggregate the payments - at the end of the month, they charged everyone. Great, except that lead to a problem of someone who say, donated on the 28th of the month, then paid again 3 days later. Not ideal. So then they decided they would do it on the anniversary, but then it resulted in increased fees for the creators because instead of being charged once, people were charged multiple times and incurring multiple fees.

So some creators complained again - they got $1200, but after fees, they got only $800. (Which happens because if you do $1 donations, the creator really only keeps around 65 cents of that if you billed individually. If you aggregate, the fees go down)

And yes, apparently fees are the #1 issue at Patreon - creators just complain constantly how much money is taken away. So Patreon decided to shift payment fees away from the creator and onto the donator in an effort to quell the complaints. End result was what happened last week when creators realized that the shift may mean more money for them per donator, but a lot of donators simply left.

Re:Breach of Trust (A wound that doesn't heal.)

[sehlat]

You have good points, sir. And I have read the blog post. It sounds sincere. I do agree that somebody has to pay "shipping costs" and since I'm the one on the sending end...

Actually, as long as they didn't nickel-and-dime me with a separate fee for each contribution I make to each of my beneficiaries, I'd be OK with it and happy to see my beneficiaries getting more money in a more reliable fashion. That's the whole point of being a patron.

But for G-d's sake, they had better warn me next time!!!!!!!!

Re:Breach of Trust (A wound that doesn't heal.)

[shess]

And yes, apparently fees are the #1 issue at Patreon - creators just complain constantly how much money is taken away. So Patreon decided to shift payment fees away from the creator and onto the donator in an effort to quell the complaints. End result was what happened last week when creators realized that the shift may mean more money for them per donator, but a lot of donators simply left.

I've left them feedback that I'm perfectly fine with shifting some of the fees to my side of the divide. The part that annoyed me is dis-aggregating my contributions, since that kind of small transaction was really my entire point in using them. I could already provide support via Paypal or Google Wallet with the $fee+%percentage model, and save the %5 Patreon overhead.

Actually, I'm not entirely clear about having both %percentage-from-patron and %percentage-from-creator. It's the same percent either way. It would probably make more sense to have the percentage entirely on the creator side, and the per-charge fee entirely on the patron side. That gives patrons an incentive to aggregate their payments to make everything easier.

Of course, aggregating payments does open them up to confusion in case of chargebacks, but I find it hard to imagine why they'd let abusive chargebacks happen more than once for a given user. Maybe they could just separate "The charge which starts your support" from ongoing support.

Re:Breach of Trust (A wound that doesn't heal.)

[sehlat]

Great, except that lead to a problem of someone who say, donated on the 28th of the month, then paid again 3 days later. Not ideal.

I ran into that exact problem when I had to reset my monthly PayPal donation to Bill Holbrook. Two hits didn't bother me because I could see it coming and was happy to add a bit extra to my yearly total.

This could probably be handled with a warning that this might happen. Let's say I donate $5 to SciShow on December 25 (signing up) and get hit with another $5 on January 1. As long as I'm warned, I can cope with that. Five bucks won't kill me. Or set it up as a non-cancelable "freebie" through to the first donation, and then if they want to cancel it after the 1st of the month donation, no problem on either end that I can think of.

One other problem I've got is that while I have a list of all my former beneficiaries,I can't seem to restore the ones I dropped (small donation charities) because the search by creator handle on the site doesn't seem to work very well.

Given Patreon's response, I actually have decided to give them another chance and refill the load, but I'm having the devil's own time reconstructing.

Re:Breach of Trust (A wound that doesn't heal.)

[sehlat]

Patreon responded well. I moved the forgiveness date up a bit. :)

Re:Breach of Trust (A wound that doesn't heal.)

[Sarten-X]

It seems to me that the best option would be to provide more options.

As a creator, let me pick who's covering the processing fees. If I'm aiming for wide appeal, it might be beneficial to pay my own fees, just to keep the apparent prices low. If I have a small appeal to some highly-contributing individuals, a few cents in processing fees won't change our relationship that much.

As a patron, let me pick when and how I'll be charged. Let me pick a schedule, and just show me the fees associated with it. If I'm picking something that causes costs to rise, I'm fine paying for it, but give me the option up front. I might be fine shifting my payment schedule a few days if it cuts down the fees, but let me make that choice. To compromise with the creator, a middle-ground option might be that the creator picks a plan for which he's willing to pay the minimized fees, and the cost of any deviations from that schedule would be paid by the patron choosing to be different.

As a business, Patreon can do a few other things to mitigate the apparently-high risks involved. Rather than passing chargebacks directly through to the creators, Patreon could hold a one-month buffer of donations, collecting the individual charges (and chargebacks), then releasing them to the creators 30-60 days after the charge deadline. Essentially, Patreon itself takes the role of a clearinghouse, maintaining account balances and payouts for each creator. Having floating balances would also open the door to allow creators to support other creators directly from their accounts (preferably with reduced fees), promoting collaboration under the Patreon banner.

Now, implementing these choices would be a significant development and logistics effort, but certainly possible.

Re:Breach of Trust (A wound that doesn't heal.)

[munch117]

So how are you going to reward artists instead?

Do you know of a competing service with better terms? If you do, then you should let the artists you support know of it, because they're the ones who need to sign up for it and put it on their web page.

Or will you pay $20 for some $10 crap in the artist's store, of which the artist only ever sees $2? That's a horribly inefficient way of supporting artists, but hey, it's great virtue signalling for you, right?

Re:Breach of Trust (A wound that doesn't heal.)

[franzrogar]

> Good for you. Now what are you going to do in the meantime?

Look into Patreon and, if I see something I want, talk directly with the creator about supporting him/her. Less fees for me and less fees for him/her.

> And yes, apparently fees are the #1 issue at Patreon

Nope, the #1 issue at Patreon is that they think they can violate the Law.

1) No one can change a payment agreement without the consent of ALL parts involved in it; or the agreement became automatically illegal and the parts that weren't asked can sue the one who changed it.
2) I agreed to pay monthly $X to that person and be charged $X.
3) Patreon decided I should pay $X + 2.9% + $0.30 because they ORDERED so.
4) So, I quit Patreon and they can be glad I didn't sue them.

Re:Breach of Trust (A wound that doesn't heal.)

[jareth-0205]

They didn’t ASK. Instead, they simply said “All your wallets are belong to us.”

They forgot that trust, once broken, is damn near impossible to repair. I am reminded of an exchange in the British Parliament after Dunkirk, when an admiral was being upbraided for risking the fleet. The admiral replied, “We can rebuild the fleet in thirty years. We can rebuild the tradition in three hundred.”

I may check in on Patreon in 2317.

Alright calm down, they weren't raiding your wallet, this is not a trust issue. They changed the system in a stupid way that lead to charges (to Paypal, not Patreon) to increase, and you can debate the decision to change the system but it's not like they were personally taking your money to enrich themselves. They changed the system to make more, inefficient, charges.

Re:Breach of Trust (A wound that doesn't heal.)

[epine]

They forgot that trust, once broken, is damn near impossible to repair.

This is another instance of feedback porn that dulls perception, not actually being so true as we wish to suppose.

Trust is perhaps something that functions in a vigorous, disruptive market. By the time the world k-opolizes (k, a small integer) fomo and habit become the main conditioning force.

Sometimes on the voyage betwixt, a growing company overestimates its grasp on its customer base's short and curlies, and abandons good ship Trust prematurely. But isn't this kind of like a wardrobe malfunction? Who didn't already have a pretty good idea what Janet's boob would actually look like? Her wardrobe, which matched her ambitions, was never that modest to begin with.

Sony's DRM Rootkit: The Real Story — 2005

Sometimes a boob pops out that we didn't expect.

What do you think of your antivirus company, the one that didn't notice Sony's rootkit as it infected half a million computers?

But actually, Sony is still in business, despite the furtive business, compounded by hubris, compounded by lies, compounded by incompetence—and so are almost all of the useless antivirus products.

Doh! We can't believe Sony.

Kaspersky, however, is really in the soup. That's one story where trust is never coming back, as advertised.

Doh! We can't believe our own stupid selves.

Re: Breach of Trust (A wound that doesn't heal.)

[Brockmire]

What a cunt response. What the fuck do you do for a job that is so selfless? Are they rolling in dough or just trying to ensure they are viable? Years ago, I talked my friend out of starting a tip jar type service because there was no money in it. He could rant pretty hard about quality content getting dropped and lost due to the emergence of the "always expect free" parasites. I'm quite sure the Patreon people feel the same way. Helping people do things they love to do doesn't deserve that kind of response and fuck, you're an asshole. You go volunteer your time and energy and deal with fucktards like you.

Re: Breach of Trust (A wound that doesn't heal.)

[rtb61]

Wow, in one breath you equate charging a percentage with working for free. It's like charging only five percent, is being truly generous, charging for nothing, taking money and giving it to someone else but keeping some because, well, just because. Parasites always hate being exposed, they become violent and aggressive, it is their nature, that and the demand for more and more and more. If you found the response so bad, perhaps you should have pointed out errors instead of resorting to a rather lame https://en.wikipedia.org/wiki/... attack. I would rather work with people like me, than people like you because well, I honestly think you are a psychopath, churning a new /. membership in order to get a rise out of me, hateful at being exposed and working for let me guess who ;).

Re: Breach of Trust (A wound that doesn't heal.)

[Brockmire]

Are you dense? I said why you're a cunt in two ways. First, they provide a service with added value services, not just process the payments. They are not even a payment processor like eBay to process payments with little to no cost, taking a cut for mostly just handling and dispersion of payment (yes, eBay provides added value to the seller and buyer to 'earn' their cut as well). Second, you said Patreon started because they are parasites with the intentions of just taking other people's money. I clearly explained how the intentions of Patreon is not like that and want to see creators survive. You however, replied with nothing of value and had no response to my assertion you're an asshole. You didn't say what you do, likely because you're the parasite. You know, takes one to know one and all. (Hehe, I'll cop to being a cunt, too).

Re: Breach of Trust (A wound that doesn't heal.)

[Brockmire]

Alright, on second read, I probably didn't make the first part clear about them providing an added value to justify their existence more than you're stating. But to add, on a small payment site, 5% is fuck all. Services like that can be 20-35%. I usually can't use my debit card in small businesses without it being at least $5, seeing that they're paying $0.35 per transaction plus monthly equipment and service fees on their debit machine.

Re: Breach of Trust (A wound that doesn't heal.)

[Jane Q. Public]

That isn't the problem. And it isn't why customers have been leaving in droves.

The problem is that rather than taking that percentage out of the received money, the plan (now retracted, I understand) was to tack an additional 5% on to what people donate.

If that needs explanation, the old scheme was: if you give $100, the recipient received $100 - (Patreon's % + $0.35).

In the new scheme they brought out, if you gave $100, you, not the recipient, would be charged $100 + (Patreon % + $0.35)

Almost nobody liked the idea. Neither the people with Patreons, or the people who paid.

They could have explained themselves here

[pots]

They're really not doing well with communication here. They make this announcement claiming that it's for the benefit of creators, and that it would improve the payment system... A bunch of people make a bunch of guesses about what they're actually trying to improve, confident that they know what Patreon's costs are and that Patreon is screwing them. Here is Patreon's chance to explain themselves, but their apology just says that there are "issues" that need to be solved.

If they would just be upfront about their costs and margins it could settle an awful lot of this... Provided they're being honest, and not actually out to screw everyone.

What about the SanFranBans?

[Anonymous Coward]

When is Patreon going to stop banning people for being "conservative", i.e. they were leftist a week ago but the party line changed...

The mainstream media is now calling Noam Chomsky an alt-right nazi. This bullshit needs to stop.

Re:Yeah you fucked up! BIG TIME!

[Fly Swatter]

Sorry to see your keyboard spaz out at the most important bit, but that looks fatal.

Clueless?

[swm]

From the new blog posting

Aggregation is highly-valued, and we underestimated that.

Aggregation is pretty much their core value proposition.
How could they "underestimate" this?

Re:Clueless?

[west]

Aggregation is pretty much their core value proposition.
How could they "underestimate" this?

Because it turns out that aggregation isn't much of a business. If Patreon decides to maintain their current business model (and that is their main value to me), I don't know whether they'll actually go bust, or just be economically moribund, but either way, it turns out that there's not money in being the sort of business I need.

It's much like KickStarter started out as an Arts funding model, but eventually realized that their real value to people was as a pre-order house. Allowing people like me to support artistic creators might sound wonderful, but it's pretty much a loser's game. The customers of any real worth have enough money for real subscription services.

(It's sort of like when I finally realized that my small donations to charities were financially worthless to the charity - they literally spent more raising than I was willing to give. The worth of my donation was solely its help in providing the appearance of widespread support, which was necessary for the charity to get the real donations they were looking needed to do anything useful - those in the $100K+ range. My job was simply to help them establish credibility to the real donors.)

So, yes, we helped Patreon establish the credibility it needs to become a subscription business. But we have to face the fact that most of us are financially worthless to the businesses we'd like to serve us.

Re:Clueless?

[PingSpike]

This is what I absolutely didn't understand about the change.

Paypal charges: $0.30 + 2.9% for receiving money, charged to the receiver

Their proposed patreon fee change was: $0.35 + 2.9%, charged to the sender

This costs more than using Paypal to send a bunch of $1 donations. Paypal is accepted more places and far more widespread than Patreon.

If they aren't doing the aggregation to reduce the credit card fees than they don't really have a reason to exist IMO. Everyone should just switch to using paypal because its cheaper and has been around longer thus having more widespread use. And by putting the fees on the senders that will immediately hammer home to every sender what a shit ass deal it really is.

Really, it looks like they were going to an IPO so wanted to have a shit ton of money on coming on their books so they removed their value proposition out from under customers and hoped they'd just eat it.

Re:Clueless?

[tlhIngan]

If they aren't doing the aggregation to reduce the credit card fees than they don't really have a reason to exist IMO.

Patreon makes it really easy to reward patrons with, well, rewards. And there are other payment methods available, including "pay per devlierable" - for every video the creator makes, patrons pay. So if they do two videos a month, you pay twice a month for the video. Paypal doesn't make this easy to do (sending invoices to a thousand people isn't easy).

And then there's the rewards - Patreon makes it possible to give all the $5 and up patrons early access to a video - say they can watch it a week ahead of time. Or to send a file to all of them (e.g., some artists send concept art out). Others use it as a lucky draw - among all the $5+ people, someone gets a real physical copy of something.

You can do it all yourself and Paypal, but it's really a lot of administrivia that you're shoving off on Patreon to do so you can concentrate more on creating and less on the boring stuff.

The EA of funding

[Anonymous Coward]

What's next? Patreon Loot Boxes?

Credit card fee

[ArchieBunker]

The credit card charge is a bullshit argument. Patreon bills you monthly so they only get hit with the fee once. They were going to add a fee to EVERY pledge. So if someone makes 10 videos in a month Patreon would have taken the fee 10 times. Had that been $1 pledges they would have pocketed $3.70 on top of the $10 they charged you.

Re: Credit card fee

[Brockmire]

As I understand it, before, let's say $10 is charged once and split across 10 $1 pledges to different creators. That's the single fee. The new way, would be 10 $1 payments. Though, not sure how that changes fraud and chargebacks, unless it's just to make it more hassle to chargeback.

Re:Credit card fee

[jareth-0205]

The credit card charge is a bullshit argument. Patreon bills you monthly so they only get hit with the fee once. They were going to add a fee to EVERY pledge. So if someone makes 10 videos in a month Patreon would have taken the fee 10 times. Had that been $1 pledges they would have pocketed $3.70 on top of the $10 they charged you.

No, its exactly what happened. They were *changing* the system to make lots of small charges to you every month. Which is dumb, and not well thought through, but why the costs changed. Patreon wasn't taking more of your money for themselves.

Too bad Drip/Kickstarter couldn't capitalize

[OS24Ever]

The tone deaf handling of Patreon (and I still can't grasp that, considering who created it, created it as a starving artist) would have been a perfect moment for Drip/Kickstarter to say fuck the invite only, let's roll. They'd probably have gotten a huge swath of folks switching because there was a reason too. The completely shit way Patreon handled this by announcing it to the users and creators simultaneously ... trying to solve a problem people didn't have.

It's unfortunate a lot of people lost income, as many people were like fuck this shit I'm out and bailed. I was hovering over the button to delete my pattern account this morning, but was trying to figure out how to keep paying the folks I do as I genuinely like this model of support.

Re:Give them a slight benefit of doubt...

[AvitarX]

Your argument doesn't make sense though.

If a card is being used for fraud, I assume it would be all or nothing.

The odds that I donate to ten projects, then someone steals my card, and donates to an 11th causing the first ten to be reversed seems super low.

Re: HAW HAW! /Nelson

[Brockmire]

Fuck you for wasting my time checking that link. Most poems are boring as shit.

Re: How about also supporting American troops?

[Brockmire]

In the sense them volunteering keeps your freedom to not be conscripted to join. Can you see Trump allowing military personnel to drop to record levels? No, anyone without bone spurs would get conscripted.

Re: Give them a slight benefit of doubt...

[Brockmire]

Yeah, basically all charges from point of being stolen to when it was noticed should be reversed.

Re: but nevertheless

[Type44Q]

Did the world already ended?

Patience; we're working on grammar first.

TOO LATE, you are not un-replaceable

[furry_wookie]

Too Late Patreon. I like many others deleted ALL my pledges and was in fact encouraged to do so by those I supported.

I deleted all my pledges via your site, and instead I have donated directly to all those who I was sending funds via your service, just as I did before you existed.

You have been cut out of the process because your only value was convenience, and that is easily replaced with direct payments and just about 5 minutes more effort to contact each person I supported individually.

BTW, I am not going back to you no matter how much you "change", the deed is done.

Frankly, I don't know why PayPal does not lift a pinky and replace you. They already have monthly subscriptions supported in their service, all they need is to spend 15 minutes adding a page that allows you to setup monthly payments yourself instead of requiring it to be initiated from the provider. You guys are one webpage and about an interns afternoon of work from PayPal away from being replaced.

Patreon was losing money

[gordguide]

The fundamental reason for the fall-back, aside from complaints, was that people voted with their money. By leaving in droves ... it doesn't matter what fees Patreon charges ... means Patreon itself was seeing a reduced income, not just those who were receiving pledges. Simple as that.