In the spring of 2013, musician Jack Conte was frustrated with the challenge of supporting himself as a creative person in the internet age. Conte, who performs both solo and—with his wife, Nataly Dawn—as part of an indie-rock duo called Pomplamoose, had sunk $10,000 of his own money into a wildly inventive sci-fi–themed music video, complete with a singing robotic head. It soon racked up a million YouTube views. But Conte’s share of revenue from the ads the site stuck on his work amounted to a pittance: about $150.
“It was so weird to see such a discrepancy between the value that I feel like I’m giving to the world and the value that the world returns to me in dollars,” he says. The predicament was hardly Conte’s alone. Thanks to YouTube, Instagram, SoundCloud, and other internet-based platforms, it’s never been easier for content creators to distribute their work. But even those with large and loyal audiences often struggle to monetize their popularity—or even understand who’s paying attention, and why.
Conte, however, had already come up with a solution: “What if I just ask my fans for a buck a month, five bucks a month,” he thought, “so that I [can] keep being an artist and doing what I’m doing?” That proposition turned into Patreon, the San Francisco startup he founded with Sam Yam, his college roommate, and that he now leads as CEO. (Yam, who built the original version of the site from scratch in three months, is CTO.) Like other crowdfunding platforms, it allows creators to solicit money from their audiences and share updates about their work. But while Kickstarter and Indiegogo focus on specific projects—a CD, a book, a card game—Patreon asks fans to give on a subscription basis. That allows everyone from cartoonists to podcasters to turn individual pledges into meaningful, ongoing income.
Launched in May 2013, Patreon quickly found success and is still growing rapidly. It now enables more than 50,000 creators to receive payments from a million-plus active patrons, double its 2016 base. In May, it announced that it was track to pay out $150 million this year, 50% more than the total for its first three and a half years combined, but “we are going to surpass that forecast considerably,” Conte now says. The average monthly pledge from a fan to a creator is $12; creators receive upwards of 90% of the total, with 5% going to Patreon and the rest to payment-processing fees. Creators net anywhere from a couple hundred dollars to tens of thousands each month (see “How five creators use Patreon to finance their art,” below).
By devising a new way for creators to make money, Patreon is building a promising business of its own. On September 19, it announced a $60 million series C found of funding from existing investors Thrive Capital, Index Ventures, CRV, Freestyle, and newcomer DFJ, bringing total funding to over $100 million. The company currently has about 80 employees, but thanks to the money it’s raised, “pretty much every team is going to double in size over the course of the next year or so,” Conte says.
Supported By Viewers Like You
For both creators and fans, Patreon’s potential to cut advertising out of the online-content picture holds appeal. Veteran video podcaster Tom Merritt first heard of the platform in the summer of 2013; early the next year, as he hatched plans for a new program called Daily Tech News Show, he wondered if Patreon could fund it. “I did some back-of-the-envelope math,” Merritt remembers. He then launched a Patreon campaign and told his fans that “if I get this much from you guys, I won’t have to supplement it with ads. And we blew past that goal.” Today, almost 5,000 fans support the show with a total of more than $20,000 in payments a month.
The bonds the company creates between artists and admirers go beyond financial transactions. Many creators have used it to reward their patrons with early access to their work: Bay Area technologist Justin de Vesine says that part of his incentive for backing the alt-rock icon Amanda Palmer—who set a Kickstarter record for music projects in 2012 by raising $1.2 million and is now one of Patreon’s top fundraisers—is getting exclusive access to webcasts in which Palmer plays works in progress and solicits feedback. “I get to be more involved with not just the finished product but the creation of things,” says de Vesine, whom I ran into at an intimate concert Palmer held at Patreon’s headquarters in San Francisco’s South of Market neighborhood.
Increasingly, Patreon creators are using funds to pay for employees, equipment, and facilities. Kinda Funny, a gaming and pop-culture show, available on YouTube and elsewhere, began with a couple of guys broadcasting from a kitchen table. Today, the set features “a glass desk and this huge screen behind them and these giant cameras that swoop in,” marvels Conte. “They would not have been able to build this without the $50,000 a month they’re generating from Patreon.”
Slideshow: How five creators use Patreon to finance their art
This ambition led Conte to conclude that it was time for Patreon to do more for the burgeoning media businesses it’s helping to create. In June, it began rolling out a portfolio of new offerings, including a smartphone app called Patreon Lens that lets creators share video clips and photos in a way that’s akin to the “stories” on Snapchat and Instagram, but with the ability to restrict viewership to a paying audience. There are also tools for automating the process of giving patrons the first look at fresh content and streaming live video to them. Newly flush from its new round of venture funding, Patreon plans to continue upping the ambition of such tools as well as striking partnerships with other services that creators use to get their work in front of audiences.
Perhaps most significant, the company’s new dashboard provides creators with insights, such as which posts are most popular with the highest-paying patrons. With these stats, artists can shape future work to appeal to backers, a necessity for the Patreon model to be viable—and something that would be tough to do based on existing resources such as YouTube’s built-in analytics.
“Whether you have a barbershop or you’re a local restaurant owner, there’s lots of tech for you to understand your business,” Conte says. If Patreon can give artists and homegrown media enterprises that same level of insight, it could have as much disruptive potential as the company’s subscription-based crowdfunding—an idea that has already turned so many passions into sustainable livelihoods.