The Sky Isn’t Falling. Not Exactly.
As you know by now, Krypton Radio is entirely dependent on Patreon donations to stay on the air, so when Patreon announced a change in the way they’re handling the service fees, it naturally got our attention.
Starting on December 18, they’re moving the charges per transaction from the creator’s column to the patron’s column, with the result that patrons are now going to be paying a smidge more than what they originally agreed to pay.
Everybody has been really up in arms about this increase, and nobody whose email address doesn’t end in @patreon.com has anything good to say about it – but it’s not quite as bad as I had previously supposed. Krypton Radio patron Eben Brooks helped me figure it out, and pointed me at the above graphic.
It’s Still Not Wonderful
It clearly shows that after December 18, creators will get a flat 95% of every pledge – but that the patron herself (or himself) will be paying that extra service fee. This means, then, that a patron who donates a dollar will not actually just be donating $0.55, with the rest eaten up in fees. Instead, the patron will be saying that they agree to donate a dollar, but will be charged extra fees that make that dollar add up to $1.39.
If you donate $5, your extra fees will make it add up to $5.50. If you’ve been in the habit of giving a dollar per creator on Patreon, though, this stuff adds up fast. If you give ten artists a buck each time they do it, you’ll pay your $10, plus an extra $3.90 in fees. That’s 39% of everything you gave, so it really discourages smaller donations.
Most of the problem with the new change in the rates is that Patreon was really terrible at explaining what they were doing. They’re trying to stabilize the transaction fees, which could vary between 2-10% for a transaction.
The bad part is that instead of internalizing this they’re foisting it off on the patrons now. They didn’t actually have to do it this way, they could have talked to the creators and see what they thought, but to be completely transparent here, none of us were asked what we thought of it. Considering that stabilizing the transaction fees on the back end could potentially have either saved us money or at least have had us breaking even, we’d have probably gone for it. Instead, we now have this huge cloud of uncertainty over the Patreon fees, and there’s no way that this isn’t going to have a negative effect on the whole patronage scene.
… But It’s Not Terrible Either …
All that said, the new situation is better than we had previously assume. A little. When you say you’re going to donate a dollar, you are. What sucks is that it’s still not cost effective for you to donate a dollar anymore, nor can creators cover that cost or absorb it to make it invisible to the donors.
By the time you divide the $0.35 base transaction fee over several dollars, though, it stops mattering so much. The cost effectiveness would obviously stop decreasing at around the $35 mark.
The creators are still rattled by it all, including a lot of people we know. Thanks to the ham-handed way Patreon explained it to everybody at first, a lot of patrons have just cancelled their support, and some creators are reporting losses of hundreds of patrons, based largely on people’s misunderstanding that their dollars were going to be essentially cut in half before the creators ever saw them. However, Patreon is not taking half those donations, they’re increasing what they take in the first place to cover the extra fees.
There will be some attrition, of course, because those fees per donation all add up pretty fast – every three $1 donations costs as much as a fourth donation, so this will cut down on the number of smaller donations people are able to afford to make. Additionally, creators can’t just use money from their own pools to back other creators without transaction fees anymore, because Patreon is forcing us to go through the front door like everybody else now.
So, as long as you’re okay with getting charged 39 cents on the dollar for a $1 donation, you can keep your donation to Krypton Radio as is – but if you want your patronage to be more cost effective, you may want to consider upping it to $5 or more so that each dollar you donate will be cheaper to give.
By the Way, While We’re on the Subject:
Yep. You guessed it. This is the part where I ask for your support.
Krypton Radio is the only full time, ’round the clock sci-fi fandom radio station on the entire planet. It costs quite a lot to keep it going every month, and we’re completely listener supported. If you enjoy the articles you read here, or like having Krypton Radio as part of your daily music experience – or both – please go to our Patreon page and kick in a few bucks a month. We feel that in this world of trouble and turmoil, we’re one of the bright, shiny spots that people like you have come to depend on to provide the sound track for our lives, and to help keep the flame alive. Isn’t that worth keeping around?
And thanks. From all of us.