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PJOmega posted:How in the world did patreon not think charging a monthly amalgamation would be the right way to proceed. That's what they already do, or rather did.
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Dec 9, 2017 20:46
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Absurd Alhazred posted:Yeah, we know. Sorry for not contributing to the bog standard griping about a price increase in this thread, which is a little bizarre given that most whining in this thread is about how startups price their products/services below cost. This comment annoys me because I would think that this kind of honesty would be encouraged in a politics subforum. Also, this thread would be pretty empty if only people who knew what they were talking about posted in this thread. I am posting about this subject because I'm hoping that someone who knows something about payment processing could comment. Something like fishmech's earlier comment, but from someone who isn't famous for regurgitating information from wikipedia and sometimes missing the point.
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Dec 9, 2017 20:50
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i can't imagine patreon was operating at a loss like uber or the type of people that are complained about. uber requires funding rounds to function, patreon almost certainly would've been fine chugging along on their own.
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Dec 9, 2017 20:54
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silence_kit posted:Sorry for not contributing to the bog standard griping about a price increase in this thread, which is a little bizarre given that most whining in this thread is about how startups price their products/services below cost. lmao at this post and how mad you are at getting slight pushback
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Dec 9, 2017 20:56
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silence_kit posted:Sorry for not contributing to the bog standard griping about a price increase in this thread, which is a little bizarre given that most whining in this thread is about how startups price their products/services below cost. Pricing things too low victimizes workers and can create monopolies. Bad fee structures victimize content creators and customers. Just because "down" is bad doesn't make "up" automatically good.
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Dec 9, 2017 20:57
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Dmitri-9 posted:Just because "down" is bad doesn't make "up" automatically good. That's right, which is why it would be interesting to hear from someone who might know something about payment processing and how much it costs. Collecting a small amount of money from a bunch of people doesn't sound like a great way to make money if you have to pay a fixed cost per transaction for each payment, but maybe the transaction fees don't have to be that bad.
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Dec 9, 2017 21:06
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Groovelord Neato posted:the first sign was changing their great logo into something loving stupid that probably cost them six figs to some poo poo design firm. There was an excellent Twitter thread yesterday pointing out that if Patreon held user money for any amount of time before transferring it to another user, they were suddenly subject to more regulation as a financial service than if they did immediate passthroughs. Thus the aggregate model of "grab all the pledges in a bundle, redistribute to lots of individual people" put them at risk. Unfortunately, I can't find it again because Twitter. Does anybody have enough banking knowledge to figure out what I might be vaguely remembering in the above paragraph? Arsenic Lupin fucked around with this message at 21:23 on Dec 9, 2017 |
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Dec 9, 2017 21:13
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silence_kit posted:That's right, which is why it would be interesting to hear from someone who might know something about payment processing and how much it costs. Collecting a small amount of money from a bunch of people doesn't sound like a great way to make money if you have to pay a fixed cost per transaction for each payment, but maybe the transaction fees don't have to be that bad. Then you could have asked a question instead of staking out a position while immediately stating you don't know what you're talking about and dismissing everything that people have already brought up. Also literally 90% of your engagement with this thread is whining about this thread and/or D&D, maybe work on that.
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Dec 9, 2017 21:29
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Arsenic Lupin posted:Two sure signs you should find a new job or sell your stock: building a signature headquarters building and rebranding. Rebranding mean you have no idea how to fix the company so you're changing the paint job. But Patreon has always collected the pledges and charged them from you once at the end of a month? They haven't been holding money at any point and if they just keep doing it the same way they always have, they never will hold any money.
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Dec 9, 2017 21:43
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Patreon's biggest problem to me seems to be that they don't actually understand their business model. Aggregating payments is literally the bread and butter of their entire platform and everything else is just set-dressing for that. If they can't deliver in a good manner on that then their service is worthless.
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Dec 9, 2017 21:50
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Condiv posted:a reminder that bitcoin once had a large bitcoin owner try cashing out, which started crashing the price of bitcoin, and so the community's response was to throw tons and tons of money at this dreadful "bearwhale" and save their beloved currency's value Holy poo poo, a $9M order loving almost tanked the market? Yes that seems normal. Surely no one will attempt to remove a few million at any point in the future.
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Dec 9, 2017 22:06
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was the guy able to cash out at least.
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Dec 9, 2017 22:09
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silence_kit posted:This comment annoys me because I would think that this kind of honesty would be encouraged in a politics subforum. well, you honestly admitted that reading is hard and you wanted me to do it for you, so MiddleOne posted:Patreon's biggest problem to me seems to be that they don't actually understand their business model. Aggregating payments is literally the bread and butter of their entire platform and everything else is just set-dressing for that. If they can't deliver in a good manner on that then their service is worthless. jeph jacques (questionable content) got jack on the phone to ask "what the gently caress". his notes: https://twitter.com/jephjacques/status/939582572958568453 https://twitter.com/jephjacques/status/939585867294928896 https://twitter.com/jephjacques/status/939586375304777730 https://twitter.com/jephjacques/status/939586800397570050 https://twitter.com/jephjacques/status/939587251415207938 https://twitter.com/jephjacques/status/939599350702968832 so basically, patreon is dead as a platform, just still twitching. and this after two days! https://twitter.com/petercoffin/status/939592280121409536 https://twitter.com/textfiles/status/939580259510509568
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Dec 9, 2017 22:10
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how the gently caress were they not keeping the lights on without vc funding.
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Dec 9, 2017 22:14
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Groovelord Neato posted:how the gently caress were they not keeping the lights on without vc funding. San Francisco is a lovely place.
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Dec 9, 2017 22:16
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GrandpaPants posted:San Francisco is a lovely place. Why did they not move, their business model gets literally no positive network effects from being close to other IT-companies.
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Dec 9, 2017 22:16
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MiddleOne posted:Why did they not move, their business model gets literally no positive network effects from being close to other IT-companies. The usual excuse is hiring from a larger talent pool which is bullshit imo but hey.
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Dec 9, 2017 22:24
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Haha, the larger talent pool in the city no one can afford to move to.
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Dec 9, 2017 22:25
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... Patreon isn't some next-gen program relying on super-algorithms. Its, essentially, a middleman payment service company: A good one at what they do, and fulfilling a needed market niche, but they shouldn't delude themselves on how important code is to the company.
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Dec 9, 2017 22:57
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nothing to seehere posted:... Patreon isn't some next-gen program relying on super-algorithms. Its, essentially, a middleman payment service company: A good one at what they do, and fulfilling a needed market niche, but they shouldn't delude themselves on how important code is to the company. look i think you're not really understanding the startup business model here,
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Dec 9, 2017 23:06
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nothing to seehere posted:... Patreon isn't some next-gen program relying on super-algorithms. Its, essentially, a middleman payment service company: A good one at what they do, and fulfilling a needed market niche, but they shouldn't delude themselves on how important code is to the company. that's why it's insanely stupid they needed a big round of vc funding especially if it's to keep the lights on.
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Dec 9, 2017 23:12
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Groovelord Neato posted:that's why it's insanely stupid they needed a big round of vc funding especially if it's to keep the lights on. That can't be the reason. Kickstarter, Gofundme, etc. all operate without complaint by taking a commission. if they needed to keep the lights on they should have tweaked the commission, not put their entire business model into question.
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Dec 9, 2017 23:24
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Dmitri-9 posted:That can't be the reason. Kickstarter, Gofundme, etc. all operate without complaint by taking a commission. if they needed to keep the lights on they should have tweaked the commission, not put their entire business model into question. It might be time to consider the possibility that the root cause of the problem is that the company is run by a loving idiot with delusions of competence. And to cross the streams back again! https://twitter.com/aedison/status/939364568811307008 https://twitter.com/aedison/status/939365062992711682 https://twitter.com/aedison/status/939365727752085504 https://twitter.com/aedison/status/939487996092600320
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Dec 9, 2017 23:44
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MiddleOne posted:Haha, the larger talent pool in the city no one can afford to move to. But if you move out of SF then you're admitting you're just a competent mid-sized company selling an a product and/or service to make a profit, not a startup out to remake the world in its image. We can't have that. Condiv posted:a reminder that bitcoin once had a large bitcoin owner try cashing out, which started crashing the price of bitcoin, and so the community's response was to throw tons and tons of money at this dreadful "bearwhale" and save their beloved currency's value This picture works on so many levels. I particularly like the rocketship about to launch in the background that the buttflag bearer guy is running towards (and in the flame trench of which he will most likely be toasted due to not understanding how rockets work), illustrating the gulf between bitcoin believers and the works of people who aren't stupid.
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Dec 9, 2017 23:54
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I CANNOT EJACULATE WITHOUT SEEING NATIVE AMERICANS BRUTALISED!
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Groovelord Neato posted:was the guy able to cash out at least. Yes but only because there was a concentrated effort to buy all his bitcoins by the true believers. If they didn’t bitcoin would’ve crashed completely. A good and stable market is one in which everyone has to buy someone’s else’s stuff when they decide to sell or else everyone’s stuff becomes worthless. CURRENCY OF THE FUTURE
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Dec 10, 2017 00:12
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divabot posted:It might be time to consider the possibility that the root cause of the problem is that the company is run by a loving idiot with delusions of competence. Digital tokens wouldn't even help, we aren't talking about ketamine dealers here. The problem isn't getting money it is gating off your premium content for subscribers.
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Dec 10, 2017 00:25
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Groovelord Neato posted:i can't imagine patreon was operating at a loss like uber or the type of people that are complained about. uber requires funding rounds to function, patreon almost certainly would've been fine chugging along on their own. Patreon was absolutely not operating at a loss, unless they were lying in all the financial paperwork they'd released over the years I guess.  Their fees charged to the project owners were well above the rates card transactions cost, and should certainly have been enough higher to account for the fact Patreon was going to get slightly worse rates for the high amount of declined cards each month. One of the things Patreon had been doing was charging rates at a somewhat variable amount, with some of the projects only getting a 7% cut sliced off while others had as much as 15% taken off. And these rates would jump around month by month. If Patreon had, say, suddenly adjusted things so the rate was never less than 9% or 10%, most people would have probably not noticed compared to normal fluctuations, yet they'd secure Patreon a hefty amount of extra money each month.
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Dec 10, 2017 00:43
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fishmech posted:How is this meant to work when much to all of a given project's content is provided not on Patreon itself at all? YouTube has its native productions, Netflix, Hulu, Amazon. Patreon could do the same. Get the top talent to sign deals.
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Dec 10, 2017 03:03
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Neon Noodle posted:Thing is, it wouldn’t be all that difficult for Patreon to broker exclusive content deals with big players. I’m not trying to predict what they will do, but they certainly could open up more potential revenue sources with advertising. Which might also explain why they don’t want adult-oriented content. People are on Patreon because they are too spicy for other platforms. Do they really want to get into bed with Jordan Peterson or have Nick Mullen or Mike Stoklasa joke about child rape next to a "Patreon brand ambassador" logo?
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Dec 10, 2017 03:13
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Neon Noodle posted:Thing is, it wouldn’t be all that difficult for Patreon to broker exclusive content deals with big players. I’m not trying to predict what they will do, but they certainly could open up more potential revenue sources with advertising. Which might also explain why they don’t want adult-oriented content. The biggest players are: 1) A podcast 2) A YouTube channel 3) A YouTube channel 4) A recording artist who was around well before Patreon 5) A YouTube channel 6) Sam Harris 7) A podcast 8) A podcast 9) A YouTube channel 10) A YouTube channel 11) A program/server for simulating certain things for WOW 12) A porn game 13) A psychologist 14) A YouTube channel 15) A YouTube channel 16) A porn game 17) A YouTube channel 18) A porn game 19) A YouTube channel 20) A porn artist 21) A YouTube channel 22) A YouTube channel 23) A webcomic 24) A YouTube channel 25) A podcast 26) A YouTube channel 27) A YouTube channel 28) A podcast All of these people primarily do their work off of Patreon, even though they may use Patreon to simplify granting early access. All of them have huge off-Patreon audiences who would resist any attempts to move their output entirely onto Patreon. These are all the people with over 5000 Patreon supporters at this moment, and of those who allow their income to be publicly viewable, they're all making at least $13,309 (before accounting for Patreon's cut) a month, with the top one making $87,775 a month. Patreon is a platform for people with existing audiences to get support from a subset of their audience on an ongoing basis. It's almost never a place to raise an audience on its own. It's also, frankly, pretty poorly laid out for someone to go searching for something to support, as opposed to coming to a support page from some place they already visit. YouTube from its very start was for people to upload their own content. Hulu is owned by the biggest production companies in the United States. Netflix had been shopping around for rights as part of its core business in the first place, and in the course of that developed a good number of contacts with production crews, to the point that they knew where to go to build their own content production (even still a ton of that was just buying already produced content a network or something passed up at the start). And it's not like Patreon has billions to toseed around to bootstrap themselves into the native production thing anyway. Dmitri-9 posted:People are on Patreon because they are too spicy for other platforms. Lol no. All of the big names are on someone else's platform, or they run their own platform. They just use Patreon as the place to handle their payments in exchange for allowing Patreon a cut of the revenue. fishmech fucked around with this message at 03:34 on Dec 10, 2017 |
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Dec 10, 2017 03:32
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fishmech posted:Lol no. All of the big names are on someone else's platform, or they run their own platform. They just use Patreon as the place to handle their payments in exchange for allowing Patreon a cut of the revenue. Uh demonetization? If you get political or say a potty word your youtube ad revenue shrinks by 2/3rds. A lot of the podcasts have trouble getting regular ad buys and people like Chapo or Jim Sterling have probably already told bigger companies to gently caress off so I don't think they'll be signing brand deals with Patreon.
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Dec 10, 2017 03:42
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Dmitri-9 posted:Uh demonetization? If you get political or say a potty word your youtube ad revenue shrinks by 2/3rds. A lot of the podcasts have trouble getting regular ad buys and people like Chapo or Jim Sterling have probably already told bigger companies to gently caress off so I don't think they'll be signing brand deals with Patreon. And so what? Patreon is literally just their payment gateway. It's not where the thing they do happens. Ad revenue shrinking as some people deal with is rather irrelevant to, say, actually being kicked off YouTube entirely would be. One of them inconveniences the wallet, the other actually halts the thing produced. Similarly having a podcast get taken down by the people who actually host them would be a pretty huge problem. I'm not sure why that's hard for you to comprehend, especially when tons of these content producers used to just straight up run subscriptions/donations through PayPal or a similar service, and should be able to swing seamlessly into any other payment.
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Dec 10, 2017 03:53
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Why don't they get users to pay $XX for Patreon credits that they can use to subscribe to content producers? This gets around the whole micropayment issue, maybe?
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Dec 10, 2017 04:01
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fishmech posted:I'm not sure why that's hard for you to comprehend, especially when tons of these content producers used to just straight up run subscriptions/donations through PayPal or a similar service, and should be able to swing seamlessly into any other payment. You just said the same thing I did but with a more condescending tone so you could pretend you contradicted me.
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Dec 10, 2017 04:05
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Dmitri-9 posted:You just said the same thing I did but with a more condescending tone so you could pretend you contradicted me. Welcome to fishmech!
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Dec 10, 2017 04:09
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Dmitri-9 posted:You just said the same thing I did but with a more condescending tone so you could pretend you contradicted me. No, you said: Dmitri-9 posted:People are on Patreon because they are too spicy for other platforms. None of those big time Patreon people are too spicy for other platforms. They all rely primarily on the other platforms for their work to actually happen. Many got reduced payouts, but they still make plenty outside of Patreon itself.
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Dec 10, 2017 04:22
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fishmech posted:The biggest players are: Who's 4?
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Dec 10, 2017 04:36
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Arsenic Lupin posted:Who's 4? Amanda Palmer.
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Dec 10, 2017 04:43
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fishmech posted:None of those big time Patreon people are too spicy for other platforms. Youtube has in the last few months totally changed their rules to allow basically no spice at all. The things that will get your monitization leveled lowered are now: Controversial issues and sensitive events: Video content that features or focuses on sensitive topics or events including, but not limited to, war, political conflicts, terrorism or extremism, death and tragedies, sexual abuse, even if graphic imagery is not shown, is generally not suitable for ads. For example, videos about recent tragedies, even if presented for news or documentary purposes, may not be suitable for advertising given the subject matter. Drugs and dangerous products or substances: Video content that promotes or features the sale, use, or abuse of illegal drugs, regulated drugs or substances, or other dangerous products is not suitable for advertising. Videos discussing drugs or dangerous substances for educational, documentary, and artistic purposes are generally suitable for advertising, so long as drug use or substance abuse is not graphic or glorified. Harmful or dangerous acts: Video content that promotes harmful or dangerous acts that result in serious physical, emotional, or psychological injury is not suitable for advertising. Some examples include videos depicting painful or invasive surgical or cosmetic procedures, or pranks involving sexual harassment or humiliation. Hateful content: Video content that promotes discrimination or disparages or humiliates an individual or group of people on the basis of the individual’s or group’s race, ethnicity or ethnic origin, nationality, religion, disability, age, veteran status, sexual orientation, gender identity, or other characteristic that is associated with systemic discrimination or marginalization is not suitable for advertising. Content that is satire or comedy may be exempt; however, simply stating your comedic intent is not sufficient and that content may still not be suitable for advertising. Inappropriate language: Video content that contains frequent uses of strong profanity or vulgarity throughout the video may not be suitable for advertising. Occasional use of profanity won’t necessarily result in your video being unsuitable for advertising, but context matters. Inappropriate use of family entertainment characters: Videos depicting family entertainment characters or content, whether animated or live action, engaged in violent, sexual, vile, or otherwise inappropriate behavior, even if done for comedic or satirical purposes, are not suitable for advertising. Incendiary and demeaning: Video content that is gratuitously incendiary, inflammatory, or demeaning may not be suitable for advertising. For example, video content that shames or insults an individual or group may not be suitable for advertising. Sexually suggestive content: Video content that features highly sexualized content, such as video content where the focal point is nudity, body parts, or sexual simulations, is not suitable for advertising. Content that features sex toys, sexual devices, or explicit conversation about sex may also not be suitable for advertising, with limited exceptions for non-graphic sexual education videos. Violence: Video content where the focal point is on blood, violence, or injury, when presented without additional context, is not suitable for advertising. Violence in the normal course of video gameplay is generally acceptable for advertising, but montages where gratuitous violence is the focal point is not. If you're showing violent content in a news, educational, artistic, or documentary context, that additional context is important.
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Dec 10, 2017 04:51
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Arsenic Lupin posted:Two sure signs you should find a new job or sell your stock: building a signature headquarters building and rebranding. Rebranding mean you have no idea how to fix the company so you're changing the paint job. You're probably thinking of this: https://twitter.com/christi3k/status/938819430795980800 Accompanying Blog And yeah, I've worked in a very similar area of payments processing and this would be my guess as to what was actually driving this change, assuming they actually have been aggregating this way. That kind of processing is tightly but also somewhat vaguely regulated at the state level because it's an excellent vehicle for money laundry. It's very possible that the state of Washington or Virginia sent them a letter asking them to explain how they weren't violating money transmitter licensing requirements and they freaked out and realized they needed to take themselves out of the flow of funds. I've not used Patreon, but what I'm assuming they were doing is recording your PayPal/Stripe info, keeping a tally of how much money you'd pledged, and then hitting your account for that as a lump sum each month. So that's one transaction, which settles into a bank account they control, usually called an FBO account in the parlance of the industry. They then consult their ledger of how much each creator has been pledged and pay them out a lump sum for that amount, minus whatever cut they take and the fee to cover interchange and processors fees. So there are some obvious advantages to this model: by lumping the transactions in and out rather than making a bunch of tiny transactions, they only have to pay the percentage cost on a single transaction, i.e. for 30 one dollar pledges to a creator, they only pay $1.05 as opposed to $9.75. But there's also not an inherent paper trail between the person sending the money and the person receiving it, and if Patreon is unscrupulous or lazy this becomes a good way to launder money. That is to say, I want to repatriate a bunch of money from illegal gun deals and account for it from the IRS, I start a Patreon for a Finger Family Song YouTube channel, give the money to some compatriots and have them pledge me. Either transaction can fail, too, which creates problems for Patreon -- if the payment to patreon fails then they might end up sending out money that didn't go in, resulting in a loss or a chargeback, and if the payment to the creator fails they end up sitting on a bunch of money that doesn't legally belong to them with no real way to refund it. I'm guessing this is the source of their variable fees to creators, it's a method for hedging risk. Either way, both the banks and the financial regulators hate this sort of arrangement because there's so much that could go wrong, and their processors don't like it much either (you'll recall they're missing out on about $8.70 in fees). Once the regulators or their bank gets wind of it, there's going to be pressure on them to become a licensed payment transmitter, which is tough because it requires very strict accounting controls, having an actual risk management team, building a system to verify identity, etc. Oh, and it's regulated at the state level, so you have to go through the process to get licensed 50 times and submit to regular audits in every state, each with slightly different laws. The alternative is to not settle into an account you control at all by working with a payment facilitator -- basically they charge the card and send along the money themselves, and you never actually take control of the funds, so any of the risk liability and regulatory pressure is on the processor. The downside is you can't aggregate under this model, because your payment facilitator is basically already aggregating for you and will treat every pledge like a separate transaction. Somebody has to pay their fee -- creator, payer, or Patreon. Patreon probably thought it was doing the creators a solid by not foisting the cost onto them anymore, but their market turned out to be a lot more price sensitive than they thought. Was there another way they could have done this? Well, if they had enough negotiating clout they MIGHT theoretically have been able to convince a payment facilitator to aggregate for them, but the economics of this are not great for that processor and Patreon's volume is low enough in real terms that it probably would have been a tough sell. They could have stuck the creators with the fee, which would have proven equally unpopular. They could have subsidized the cost of fee themselves, but that's extremely unsustainable. Or they could have become their own payment facilitator, which would have been very expensive both in money and time (let's say $15 million and 2 years to hammer out a deal with a bank, build an integration, hire and train an entire risk team, do the audits and put the accounting controls in place) Depending on how hot and heavy the regulators coming at them, there might not have been time. Or they could use Bitcoin and enjoy higher fees, longer transaction times, significant barriers to growth on both sides of their business, and a greater chance of losing everything when the market melts down.
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