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 ifIjustaskmyfansforabuck 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 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. It’s on track to pay out $150 million this year, 50% more than the total for its first three and a half years combined. Creators receive upwards of 90% of pledges (Patreon keeps 5%; the rest goes to payment- processing fees) and net anywhere from a couple hundred dollars to tens of thousands each month (see “Producers Circle,” below).
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,” he says.
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.”
This ambition led Conte to conclude that it was time for Patreon to do more for the burgeoning media businesses it helped 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.
Perhaps most significant, Patreon’s 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 barber shop 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.