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So what happens when YouTube builds in Patreon like functionality?
Why didn't they just set up a Patreon page for themselves?
So what happens when YouTube builds in Patreon like functionality?
That means they're going to expect a lot of revenue. Which they plan to take on money that people give freely. I don't see that ending well.
They have a fee of 5%. Let's assume they have a price/earnings ratio of 20, that means they expect people to spend something like $450m/year on Patreon. According to Wikipedia they are at around $150m/year already. I think it is totally feasible that they could increase that to $450m/year and not have to increase their 5% fee. Seems like a reasonable valuation to me.
A tiny fraction of that will be earnings.
Hence a problem with the valuation.
Assuming they have 10% margins - that means sales of 10x what you described in order for the valuation to make sense.
Note that Twitter and many others, have never even turned a profit, and are still billions away from breaking even.
That means they're going to expect a lot of revenue. Which they plan to take on money that people give freely. I don't see that ending well.
It will be interesting to see how their board changes as a result. I think VCs may be trying to get a grip on controlling the content allowed, in addition to the profitability and scaling potential. If Patreon gets winner-take-all huge, the BoD could literally steer culture by drawing the boundary lines on acceptable content. High amount of intangible value there.
Most internet sites run into conflicts with content because they're trying to make a profit through ad revenue. Mainstream advertisers don't want their ad next to porn/controversial things, and may not want to advertise on even the non-controversial part of the site if the site is associated with porn/controversial things in the minds of the public.
Patreon's business model doesn't really run into that issue.
So what happens when YouTube builds in Patreon like functionality?
Even though Google could recreate the whole Patreon system, they'd be forced to start with a customer base of zero and risk pissing off Patreon's customers and creators by trying to get in between them.
Also, as others have pointed out, Patreon is not just Youtube. Google tried to clone a product and a network before, with Google+, so they know how difficult that can be.
Earlier quoted context omitted.
>but non-ultra-leftists without large social following are doomed Completely false, "left" YouTube channels I know of: like Philosophy Tube and Contrapoints are having serious problems with their videos being demonetised and removed. Videos which even mildly critisize capitalism are being demonetised, it's pretty much impossible to run a left wing YouTube channel without Patreon. Virtually all political videos are de…
Shouldn't we take a moment to consider the irony of monetizing a video promoting anti-capitalist philosophy?
Capitalism doesn't own the idea of "markets", "sales", etc. Rather, the distinction between capitalism and most other economic theories relates to the ownership of organizations and the splitting of the revenues from sales between different economic factions, eg capital and labor.
Capitalism is the position that ultimately, capital should own the organization, while things like socialism argue that the people who perform the work should have the ownership.
In almost all systems, it makes sense to monetize a video, so the owners of the organization that produced it can get some of the value they created returned to them.
Earlier quoted context omitted.
>but non-ultra-leftists without large social following are doomed Completely false, "left" YouTube channels I know of: like Philosophy Tube and Contrapoints are having serious problems with their videos being demonetised and removed. Videos which even mildly critisize capitalism are being demonetised, it's pretty much impossible to run a left wing YouTube channel without Patreon. Virtually all political videos are de…
Shouldn't we take a moment to consider the irony of monetizing a video promoting anti-capitalist philosophy?
Earlier quoted context omitted.
They have a fee of 5%. Let's assume they have a price/earnings ratio of 20, that means they expect people to spend something like $450m/year on Patreon. According to Wikipedia they are at around $150m/year already. I think it is totally feasible that they could increase that to $450m/year and not have to increase their 5% fee. Seems like a reasonable valuation to me.
5% is not earnings, it's revenue. A tiny fraction of that will be earnings. Hence a problem with the valuation. Assuming they have 10% margins - that means sales of 10x what you described in order for the valuation to make sense. Note that Twitter and many others, have never even turned a profit, and are still billions away from breaking even.