Why Patreon’s business model is under threat

In 2019, Wired reported that 125,000 creators -- podcasters, YouTubers, musicians, webcomic artists, etc…-- had generated a combined 5 million monthly subscribers. At the end of that year Patreon announced that it had paid out $1 billion to its users since its inception, with $500 million amassed that year alone.

Patreon’s strongest pitch is that it’s independent from the major tech platforms. By now, every creator has been burned by the algorithmic feed or knows someone who has.

YouTube’s 30% cut of all subscription revenue is much higher than Patreon’s 5 - 12%, and every creator is locked into the same pricing, whereas Patreon allows for multiple tiers. But YouTube’s paywall is built into its ecosystem, meaning it’s much easier to expose a YouTuber’s fans to paywalled content, and creators don’t need to drive their potent... See more

But though Patreon’s made significant progress toward its goal to “fund the creative class,” I think its business model is now under threat, specifically because most of the large social media platforms have realized that there’s real money to be made from taking a cut of subscriptions that are driven by their creators. Over the past few years, sev... See more