Patreon announced a new service fee policy that it says will help creators keep more money, but many are worried because they believe it will instead discourage their patrons from pledging.
The crowdfunding platform for artists currently takes a fee of 5% (creators also pay fees charged by payment processors like Stripe or PayPal) from each pledge. That changes on December 18, when patrons will start paying 2.9% plus 35 cents for each individual pledge, according to Patreon’s product update page.
For patrons who back per-post creators, the 2.9% plus 35 cents service fee will be added to all paid posts. Creators don’t have the option to cover or remove service fees from their pledges.
Patreon says the reasoning behind its new policy is to let creators keep a larger cut of each pledge. “With this update, creators will now take home exactly 95% of each pledge with no additional fees,” the company explained on its update page. “In the past, a creator’s income on Patreon varied because of processing fees every month. They could lose anywhere from 7-15% of their earnings to these fees. This means creators actually took home a lower percentage of pledges than their patrons may have realized.”
It added that “Creators often take home a lower percentage of their Patreon income than patrons may realize. Standardizing our fees across the board provides consistent expectations and more money for creators on Patreon.”
Many Patreon creators, however, quickly criticized the change, arguing that it will turn away patrons, particularly people who prefer to pledge small amounts to multiple creators.
For example, comic artist Gibson Twist said on Twitter that he expects to lose many backers because the new fees will increase most of their current pledges by more than a third. Twist added that as a patron himself, his own charges will also climb significantly.
Some patrons also said that the new service fee will incentivize people to make a large pledge to one creator instead of supporting several with smaller amounts because they don’t want their fees to add up, which hurts artists who depend on getting many $1 pledges.
Patreon, which was founded in 2013 and has raised about $107 million in funding so far, says it has more than one million subscribers who pay an average of $12 per month to more than 50,000 creators. Its success prompted Kickstarter to retool Drip, its subscription service for independent musicians, to compete more directly with Patreon. Other rival crowdfunding platforms for creators include Flattr and Steady.
While creators can ask supporters for pledges on their own using PayPal, Stripe and other payment services, Patreon’s ease of use, thanks to tools like its API, and popularity helps many make an income (or at least not lose money) from their art. This is especially important for creators who rely on YouTube, but saw their revenue plunge this year as a result of changes to its advertising policies—(an event known as the “adpocalypse“). For them, Patreon’s new service fees represent a potential double whammy and are yet another reminder that the online platforms that help them make a livelihood can also very quickly take it away.
TechCrunch has contacted Patreon for comment.