Patronage at the Long Tail
Is there room to compete with Patreon?
I’ve seen a lot of critiques of Patreon recently on Mastodon, most recently this very long and detailed explanation of how to eat Patreons lunch. I ran this thread by an ex-Patreon engineer who said “yup seems right”. However, talking further with someone who tried to do this led to some questions around if this is actually feasible. Can we compete with Patreon while serving the long tail of content creators?
Let’s see!
You have a people each running campaigns for patronage on average. Each campaign has at least one funding model. One model bills patrons their pledge each month. One model bills patrons their pledge per work, which can be variable per month to a maximum monthly pledge amount. Patrons commit to specific tiers of pledges per campaign. They may subscribe to any number of pledges across any number of campaigns. percent of campaigns are on a per-month model, while %50 are on a per-work model.
Each month, patrons are billed once for the sun of all their pledges, which averages $ for per-month pledges and $ for per-work pledges — to a maximum of $ per month. A campaign with a per-work model creates works per month on average.
Transanction fees are subtracted from this amount, a flat base fee of $ and a variable percentage fee of %. A variable percentage operating fee of % is deducted from the total pledge sum and kept by the operator. The remaining amount is allocated to the campaigns in proportion to the pledge totals. Each month, each campaigns pledge allocations are summed and deliver to the person managing them in a single transaction.
Your system has patrons, each supporting campaigns on average.
This means that you have 1200 total campaigns, generating a total pledged amount of $45000. Your payment processor collects $4305 in transaction fees, while you collect $2250 in operating fees. In sum, you generate $38445 paid to campaigns, with an average campaign earning $32.0375 and an average customer earning $38.445.
Discussion questions follow, with opportunity for futher development of the model:
The least efficient simulation has n patrons each giving one dollar per month to one campaign.
The most efficient simulation has n patrons each giving their monthly maximum to many campaigns.
A realistic simulation has both these patrons distributed probably normally.
For a given distribution of patrons, campaigns, people, and pledges, what’s the connection to how much the platform collects?
At what contribution amount does the operator start to make more money than the payment processor?
‘’’ 0.05x = 0.029x + 0.30 ‘’’
How does the percent of contribution passed to the creator change with contribution levels and diversity of supported campaigns per patron?
‘’’ N = x - 0.079x - 0.30/y ‘’’
What situation makes for delivering 90% of contributions to creators Plug in 0.90 for N above.
Does a number of small iterations of the platform for specific community niches make sense, or does a single large centralized and generic platform?
Smaller platforms can be cooperatively owned and operating costs small. A large platform needs to provide more support and therefor will have higher operational costs. Development costs remain the same in either application, so how does the initial development get funded?
How does the outcome compare to Patreon? How does the outcome compare with open collective? How does the outcome compare with OnlyFans? Can this be used by artists? Can this be used for pornography? Can this be used for Real Bad Shit?