But it has already lost some users, says CEO Jack Conte
Patreon has changed its mind.
The startup, which lets fan fund their favorite creators, is reversing a change in the way it handled subscription payments, following a slew of criticism.
Short version: Last week, Patreon added a service fee on top of subscribers’ payments, arguing that it needed the fees to help revamp its payment system. Patreon users, who directed more than $150 million to their favorite singers, podcasters and other media-makers this year, howled.
Some of them also quit the service, says Patreon CEO Jack Conte. He said the service anticipated that would happen when it brought in the new fees, but neglected to tell creators they might lose subscribers. “I was really bummed about this,” he says, but won’t say how many subscribers left.
Many commentators and users connected the new fees with Patreon’s recent $60 million fundraising round, which likely valued the company above $400 million. That’s a reasonable assumption, given that Patreon needs to generate a lot more revenue than the 5 percent per user fee it gets now to justify a big valuation.
But Conte says the new fees weren’t meant to make more money for Patreon, but to cover the costs. He says the company still plans on making more money by layering in additional services and transaction opportunities.
Patreon’s subscription model has made it one of the more interesting companies of the last year — which is why we’re interviewing Conte at Code Media in February. If you’d like to join us, you can learn more here.
Recode – All Go to Source
Author: Peter Kafka
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