What Is Patreon And How Does It Work?

Patreon is one of the most popular membership platforms in the world right now. It’s made quite a few waves over the past few years, and is currently used by content creators all over the globe. If you are a content creator looking to increase your income, you should be using Patreon.

The company’s approach towards reward-based crowdfunding has made it an incredibly popular choice for content creators all over the globe. Moreover, the range of financial tools that it offers simplifies money management for content creators and artists.

Content creators and artists generally have a hard time getting fans to support them financially. By using a platform such as Patreon, creators and artists can easily get paid for their work. Today, Patreon is used by YouTubers, TikTokers, podcasters, digital artists, writers, influencers, writers, and many others.

The name is a play on the classic concept of patronage. Throughout history, influential artists, sculptors, authors, and even musicians have relied on donations from wealthy supporters to fund their work. Patreon is built on a similar concept, though it makes it more scalable and flexible to target a much wider audience.

What Is Patreon?

Patreon is a subscription-based platform that allows creators to get paid quickly and efficiently. Many content creators who transition full-time to this role find it difficult to make ends meet with ad revenue alone. Patreon solves this problem by letting creators provide financial support monthly to their favorite creators.

Patreon allows creators to crowdfund and get paid by supporters and fans. In return, creators can offer exclusive content to their “patrons.” Patreon allows artists to generate a consistent monthly income by letting supporters subscribe to their content and pay a monthly fee for access to their content.

Patreon lets content creators get money for content that they are already creating. Supporters can pay a small amount each month, or creators can charge them a fee for exclusive content per post as well.

Creators often provide exclusive benefits and perks to their patrons. This means patrons get to join a close-knit community and support their favorite creators by paying a few dollars. More creators charge a very small fee, with prices starting from $1 a month.

Patreon was founded by Jack Conte and Sam Yam in 2013 in San Francisco. In its first year, the company managed to raise upwards of two million in funding, and signed on more than 125,000 patrons within their first 18 months.

Patreon also bought Memberful, a company that offers membership services, in 2018.

The key difference between Patreon and other crowdfunding sites like Kickstarter is that most sites offer a crowdfunding platform to inventors and creators to ask for funding for products that don’t currently exist.

Patreon, on the other hand, only lets you get payment for content that is already published and exists. Content creators can’t ask patrons for money for content that is not currently available.

Many influential personalities now use Patreon, including names like Philip DeFranco, Sam Harris, and Amanda Palmer.

How Does Patreon Work?

You can easily access Patreon through its website or via mobile apps (available on both Android and iOS). Patreon works in different ways for both content creators and patrons.

Content Creators on Patreon

Patreon creators can easily generate revenue for their digital creations, which include webcomics, videos, songs, podcasts, digital comics, and virtually anything you can think of. To start using the platform, creators are required to first create a Patreon account, and then create a page on the platform. Here’s how a page on Patreon looks:

The page layout is fairly simple. A cover photo appears at the top, with different membership tiers right below. Users can also see the latest posts from creators, though they are hidden until you become a patron.

This way, patrons are notified whenever a creator releases something new. More importantly, people who are looking to subscribe to a creator can check just how frequently they upload new content, and what’s exclusive to patrons only.

The primary way for creators to communicate with patrons is through their feed. Creators can post updates, text, images, polls, and videos to engage with their patrons.

However, the real benefit that you get with Patreon is that it lets you set up different membership tiers. You can block off specific content for certain tiers (we’ll get to that in a moment).

Patreon also supports custom RSS feeds, lets you share posts on social media, and integrate with third-party apps like Discord. This works great for podcasters, as every new patron gets a custom feed link that they can use to connect using any podcasting app they prefer.

This also lets podcasters offer different episodes to members of different tiers. Since each member gets a unique feed link, they’ll have access to different episodes based on the membership tier they are subscribed to.

How Does Patreon Work for Patrons?

Patreon lets you support your favorite celebrities and content creators by paying them for their content. You could pay any amount depending upon the membership tier you choose. For instance, you could get access to exclusive content for $1 a month through Patreon.

Or, you could choose a higher membership tier, for, say $5 a month, and get access to exclusive content or other perks, such as early access through the creator’s Patreon page. The content you get in return depends exclusively on the creator.

So, if you support a yoububer via Patreon, you might get access to exclusive behind-the-scenes action or other content, such as exclusive YouTube videos. Gaming creators can offer exclusive content such as access to a new video to their patrons. If you become a Patreon patron, you just select the membership tier and start supporting content creation!

Understanding Membership Tiers

Membership tiers play an important role on Patreon. When you go to any creator page on Patreon, you will see the different membership tiers on offer, and the amount of money you have to pay to subscribe to that level.

As you can see in the screenshot above, Chapo Trap House has two membership levels. Based on the tier you choose, you will get access to specific benefits. Patreon allows content creators to charge between $1 and $100 per month from their fan base.

Most content creators often offer the option to communicate with them directly for the highest rewards. However, the top tiers often have limited slots. Many content creators also offer free content, as well as a “pay what you want” option to their patrons. For instance, many comedians use the Patreon platform to offer access to content from their tours, as well as content related to their stand-up specials.

You don’t necessarily have to choose a membership tier to subscribe to your favorite content creator. If you don’t choose a monthly Patreon membership, you can also choose to pay per post. For instance, if you choose to pay $1 per post, and a content creator releases five posts a month, Patreon will charge your card for $5.

How Does Patreon Process Payments?

Source: Patreon.com

Payment processing on Patreon is fairly simple. You can either pay via a MasterCard or Visa, or you can transact using PayPal on the platform. Patreon simply acts as the merchant and uses a payment processor to easily accept payments from all currencies.

You can also file a chargeback in certain cases where you feel the transaction wasn’t valid. If you were unhappy with your pledge, you can get a refund by disputing the transaction, though you’ll have to defend the chargeback.

Patreon doesn’t have an auto-withdrawl feature for creators. Therefore, you can only withdraw payments by making a request. There’s a fairly dedicated tracking tool for seamlessly tracking payments and paying yourself.

Patreon’s Key Features

Patreon offers a variety of different tools and features for creators to let them easily manage their websites. Apart from a set of page design tools that allow creators to add artwork to their pages and set up membership tiers, Patreon offers quite a bit more.

Income Tracking

Patreon’s creators-only section of the platform lets users track their income on the platform easily. There’s a “Patrons” section on the platform that lets creators easily track their income and remind them to deliver rewards to customers who pledged to specific membership tiers.

Communication Features

There’s also a built-in messenger in Patreon that you can use to communicate with your patrons. You can use Patreon for both chatting or sending emails. Creators also have the option to survey patrons to find out whether they are satisfied with the content, or get suggestions on the kind of content they want.

Gated Content

One of the main reasons for Patreon’s popularity is the fact that it appeals to content creators in many different industries. If you want to create art tutorials, you can do so using this platform. Similarly, if you are an educator, you can easily offer different kinds of lessons.

The reason for that is simple: gated content. Patreon lets you gate content behind different membership tiers, and offers fully customizable kits that you can use to quickly edit, customize, and personalize your Patreon page.

Creators get full control over each element on their page. You can make as many edits as you want, even after you launch.

How Does Patreon Make Money?

Patreon also offers customizable kits and templates that creators can use to easily set up their Patreon page. Just add logos and a cover, set up the membership tiers, and you’re good to go.

Now, you might be wondering how Patreon makes money. Patreon charges four different fees from its creators. This includes the following:

  • Platform fee: charged as a small percentage of the payments processed or a creator.
  • Payment processing fee: charged every time funds from your patrons account to your creator balance.
  • Payout fee: charged on every withdrawal.
  • Conversion fee: a 2.5% conversion rate is applied on all payments processed in different currencies.

How Patreon Changed the Content Creation Industry

One of the reasons why Patreon found so much success was because it was created by a content creator who knew just how difficult it is to raise money and get rewarded for your creativity.

In the past, most content creators relied on limited advertising means to promote their content. Advertising on blogs or on YouTube is always an option, but unless you have millions of subscribers, it’s going to be difficult to transition full-time with just YouTube.

YouTube also changed its algorithms dramatically in 2019, reducing ad revenue by a significant margin. With Patreon, you don’t have to worry about relying on revenue from YouTube videos or your content.

By appealing directly to your core fan base, you can get them to pay you a monthly account and offer new content. More importantly, Patreon changes the way content creators communicate with their audiences.

Previously, you could only get feedback from comments or via direct messages. Those are obviously difficult to vet because you don’t know whether people are being honest or not. However, with Patreon, since only people who subscribe to a membership tier can communicate with you, you can better connect with them and find out exactly how you can improve your content delivery and processes.

For fans, Patreon allows you to easily fund and support the work done by your favorite artists and creators. Instead of looking for different ways to fund your favorite content creators or donating to them via different channels, Patreon lets you easily process payments and reward your favorite creators.

Because you know exactly what you are getting, you can easily choose whichever membership tier that you think is best suited to your budget.

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