Sam’s blog post for this week inspired me to think back to my last dip into the waters of the maker’s movement. I feel as though this subject impacts on my life more so than my local shops of whom I rarely interact with and have no investment on their impact in social media. As Sam has already touched on the crowd funding giant, Kickstarter, I figured I would expand on how crowd funding has grown since its creation and then how Patreon has approached it differently.
McKinsey Global Institute (MGI): The Social economy, page 15. Has categorized the potential benefits of social technologies into five organisational functions of use, these consist of:
Operations and Distribution
Marketing and Sales
The focus of this post will be based around the function of Operations and Distribution with a few aspects of Product Development. The fact that crowd sourcing exists is testament to the power of social networks and how they have the ability to create a near endless train of advertisement given the correct product. As Kickstarter was the first giant in the crowd funding world it was clear that it would not be the only one and that there would be many that follow after its successful release in 2009.
Patreon was founded in May 2013 by artist Jack Conte, who was looking for a way to make a living from his popular YouTube videos. Together with Sam Yam he developed a platform that allows patrons to donate a set amount of money every time an artist creates a work of art. The company raised $2.1 million in August 2013 from a group of venture capitalists and angel investors.
The company signed up more than 125,000 “patrons” in its first 18 months, and in late 2014, the website announced that patrons were sending over $1 million per month to the site’s content creators.
In March 2015, Patreon acquired Subbable, a similar voluntary subscription service co-created by John and Hank Green, and brings over Subbable creators and contents including C.G.P. Grey, Destin Sandlin’s Smarter Every Day and the Green brothers own CrashCourse and SciShow channels.
As of February 2014, almost half of the artists produce YouTube videos, while the rest are writers, draw webcomics or make podcasts.
Below is a Venn diagram created by Tyler James in the hopes of distinguishing the reasons for joining either crowdfunder.
One thing that this visual shows is that Patreon is not primarily focused on selling PRODUCT…it’s selling PEOPLE.
Chris Oatly did a good job selling the key distinction between a Kickstarter project and a Patreon project.
The truth is, creating comics (or other stuff) is not free. It costs time (tons of it) which could almost always be spent on more lucrative (though usually less fulfilling) endeavors. There are material costs to produce creative work, and yes, if you’re trying to do this full-time, there are things like housing costs, utilities, food, medical, savings, and plenty other things to factor in.
The focus for this analysis will be Destin’s Smarter Every Day series. He creates videos analysing various forms of science across the world and is currently undertaking flying lessons to deconstruct the process through his usual physics based approach. In his case there would be little reason to require a large lump sum of money for creating fortnightly videos as lessons and flights overseas are commonplace for his research. With his Patreon operation he is currently earning $6,760.71 per video thanks to 2,290 people supporting him. Because of this interconnectedness between the community and the products there are two main aspects to Patreon: the community and the products. Since patrons are generating a wage for the creator it is in their best interest for the system to be as transparent as possible, this is where the community aspect comes into play. This is similar to a Facebook feed where all the new content and comments on said content appear, along with discussions held by the patrons. This helps to keep the funders in the loop about upcoming projects and the creators in the know about the thoughts on their products.
The beauty of this model of payment is that, should the creator stop producing content or drop in consistency or quality, the patrons can stop paying. This is a luxury that Kickstarter funders do not have and a feature to everyone who opposes scammers.
Uniquely the product development and marketing and sales are already setup by the user wanting to become a part of Patreon. Therefore the 5% that Patreon takes from pledges are for providing the infrastructure for this to happen. Operations and Distribution is the key reason why this system works so successfully. Since there is no physical products to be shipped, all distribution is based around their social platform that connects the patrons to the creators. This system is specifically crafted to allow for this type of interaction and should this not have been developed, most of this creative talent would be either undervalued due to relying solely on advertisement or wasted because of the lack of opportunity the creators had to develop their content.
“This generation of webcartoonists has been forced to learn to be entrepreneurs, [which] probably prevents some artists from getting careers… There are a lot of people who really are only cut out for the arts,” says Zach Weinersmith, the creator of the popular webcomic Saturday Morning Breakfast Cereal who now makes $8,872 a month for his comics on the crowdfunding site. “Patreon is good for people like that, since it means they can work without strings attached. To make $1,000 a month selling t-shirts, you’d have to sell and ship something like 100 t-shirts every single month, not to mention watching inventory and making new designs. That’s a hell of a lot of work for someone who wants to sit around being whimsical all day long.”