Patreon lays off 13% of workforce • Hacker News Board

Re: Patreon lays off 13% of workforce

#251

Post by alteria » Wed, Apr 22, 2020, 6:56 PM UTC

iffybookmark wrote: post #192

subpixel wrote: post #189

Earlier quoted context omitted.

By your logic, all NSFW online businesses online are vulnerable to their payment processing being taken away from them. Can this possibly be true?

IIRC there's basically one payment processor, whose name I can't recall, that ~100% of NSFW sites use. And their fees are very high, given the risk of processing those payments.

CCBill and Probiller or something.

CCBill's fees I think are like 11-15% plus $1k per year, pretty insane but underscores the risk

Re: Patreon lays off 13% of workforce

#252

Post by rasz » Wed, Apr 22, 2020, 7:09 PM UTC

Nextgrid wrote: post #9

I don't really understand why Patreon needs so many employees. We're talking about almost 300 people to just supervise a fully automated process. The tech has already been built almost a decade ago and hasn't changed much, so it can't require that much engineering work. It's also an easy problem (take X amount of money, divide it between Y people, pay them out) and they ironed out any potential issues over the years.…

Because they took VC money and need to show fake growth.

Re: Patreon lays off 13% of workforce

#253

Post by TheHegemon » Wed, Apr 22, 2020, 7:21 PM UTC

iffybookmark wrote: post #192

subpixel wrote: post #189

Earlier quoted context omitted.

By your logic, all NSFW online businesses online are vulnerable to their payment processing being taken away from them. Can this possibly be true?

IIRC there's basically one payment processor, whose name I can't recall, that ~100% of NSFW sites use. And their fees are very high, given the risk of processing those payments.

CCBill is the primary one and they charge nearly 4% per transaction and routinely hold transactions for up to 6 months sometimes. They also have high registration fees but they are one of the best for high risk industries.

Re: Patreon lays off 13% of workforce

#254

Post by TheHegemon » Wed, Apr 22, 2020, 7:22 PM UTC

alteria wrote: post #251

iffybookmark wrote: post #192

Earlier quoted context omitted.

IIRC there's basically one payment processor, whose name I can't recall, that ~100% of NSFW sites use. And their fees are very high, given the risk of processing those payments.

CCBill and Probiller or something. CCBill's fees I think are like 11-15% plus $1k per year, pretty insane but underscores the risk

Woah, back when I was forced to implement them they only charged 4%.

Re: Patreon lays off 13% of workforce

#255

Post by alteria » Wed, Apr 22, 2020, 7:40 PM UTC

TheHegemon wrote: post #254

alteria wrote: post #251

Earlier quoted context omitted.

CCBill and Probiller or something. CCBill's fees I think are like 11-15% plus $1k per year, pretty insane but underscores the risk

Woah, back when I was forced to implement them they only charged 4%.

They have a 3.9% ("green") tier without a high-risk fee, but I don't think the adult companies qualify that one.

I could be wrong, but I didn't find a clear breakdown of who qualifies for each plan on their website. I'm guessing the 3.9% plan and their non-profit plan are there so they can present as a normal payment processor.

Re: Patreon lays off 13% of workforce

#256

Post by chipotle_coyote » Wed, Apr 22, 2020, 8:45 PM UTC

coldpie wrote: post #183

chipotle_coyote wrote: post #105

Patreon's problem, I think, is that they've taken enough VC money to be at a kind of "half-unicorn" status -- and there's no possible way for them to return on that investment unless they start wooing megastars to their platform. The majority of creators are always going to be way back in the long tail, but the folks at the top of the curve need to be bringing in a lot. Like, a lot. A million a month or more. And I c…

I've never been in the position of taking VC funding, and I don't expect to be in my life, but if I were, I don't think I would. It seems to be a recipe for destroying your company ~5 years down the line. Perhaps the early founders get out with a bunch of money, and maybe that's the point, but I just don't think I'd want to do that to my employees and the people who came to depend on my company. If you don't have a s…

Probably, yes.

Personally, I don't think too uncharitably of Patreon's founders; I genuinely don't get the impression that they started the service because they thought it was a way to make oodles of money, but that they genuinely saw it as doing good for small creators. But I think they let themselves be talked into the idea that they could be the Next Big Thing if only they took enough VC money to follow the "ramp up, get big, and then figure out how to pay for it" model that a lot of startups during the last decade took. The vast majority of those startups failed while they were still small, and the vast majority of the rest only ended up "successful" by selling out to someone else before the bills started coming due... but that's not the story that most of us wanted to hear back then.

Re: Patreon lays off 13% of workforce

#257

Post by hvis » Wed, Apr 22, 2020, 8:54 PM UTC

Hydraulix989 wrote: post #126

dannyw wrote: post #117

Earlier quoted context omitted.

Tumblr v2? Patreon is not an advertising supported platform, so it can't be from advertisers. Onlyfans has no problem accepting credit cards; and Patreon is certainly at the scale where they negotiate with payment facilitators. I'm curious why they made the decision... moral superiority? If it's a brand perspective, then I think the biggest regret of Patreon in the coming years is going to be not spawning off their o…

Patreon has always had its hands dirty in enforcing their definition of "morality" -- while I almost completely agreed with their decisions, banning "anime" was the last straw for me. https://www.reddit.com/r/patreon/comments/fho2ii/patreons_ba... Each choice they made to ban an "influencer" in the name of morality was a massive hit to their business because by definition, not only was said influencer banned, but als…

I'm guessing Patreon is reacting to the changes in the legal landscape. The same ones that made Craiglist close its Personals section (or however it was called): the increased liability for the platform for whatever behaviors the public at large might find objectionable. Or find an excuse to take an issue with, really.

From what I know, the anime genre creators were a fairly popular niche (with the associated income stream), so they probably weren't taking these changes lightly.

I'd say write your congressmen (I'm not from US myself), but at this point it seems futile.

Re: Patreon lays off 13% of workforce

#258

Post by GaryNumanVevo » Wed, Apr 22, 2020, 8:55 PM UTC

BurningCycles wrote: post #199

zerm778 wrote: post #83

Patreon became successful mostly because of the girls charging money for their nudes. Then they've started to ban these girls because they wanted a clean platform. Guess what, these girls have now moved to onlyfans and they won't come back. Patreon has lost the money bringing members thinking that failed musicians/youtubers would bring them the big bucks.

>Patreon became successful mostly because of the girls charging money for their nudes. Do you have any numbers to back this up with ? I think you are likely right but if there is any data on this then I would love to see it. I remember seeing an article where the Patreon CEO said it wasn't sustainable a year or so ago, was this after they started banning nudes ? Also I recall that Sam Harris, Jordan Peterson and othe…

I would also love to see these numbers. The highest earning group on Patreon is a leftist podcast, and they're only doing it with singular $5/month patrons.

Re: Patreon lays off 13% of workforce

#259

Post by chipotle_coyote » Wed, Apr 22, 2020, 9:11 PM UTC

dannyw wrote: post #115

chipotle_coyote wrote: post #105

Patreon's problem, I think, is that they've taken enough VC money to be at a kind of "half-unicorn" status -- and there's no possible way for them to return on that investment unless they start wooing megastars to their platform. The majority of creators are always going to be way back in the long tail, but the folks at the top of the curve need to be bringing in a lot. Like, a lot. A million a month or more. And I c…

A middleware that can be described as Wordpress with access control and Stripe integration, but worse in terms of performance and UX; somehow takes on $165 million in funding [1] and describes their business model as "not sustainable" [2]. Patreon is a low touch SaaS platform that charges up to 12% PLUS payment processing fees. They do not provide any meaningful level of discoverability: you must build your audience…

I'm going to push back a little on this. I've run a Patreon and have a pretty good idea of what they provide for creators, and I've also looked into how I could replicate their services on my own -- and it turns out it's not really that trivial.

- I want something that handles tiered membership levels with paid access control.

- I also want something that keeps track of "goals" for donation drives (e.g., "if I bring in $500 a month, I'll do this thing for everyone").

- If I have rewards at different levels (which I did), it's nice to have something that keeps track of when I need to send those out and who I sent them out to.

- It's nice to have what amounts to a basic CRM, keeping records of who paid me what at what points. If I say "maintain the membership at the $9/month level for at least six months and I'll send you this widget at the end of the year," I want my membership platform to be able to tell me who was at that level for six months even if they're not at that level at the end of the year.

- It's nice to have a built-in mailing list if I need it.

- While Patreon is very up front about not being a discoverability platform, aggregation of creators still matters: it is way easier to support a half-dozen or more creators monthly when you get one monthly charge instead of many monthly charges, and in fact people do occasionally discover new creators by discovering who creators they follow are supporting. If I were running this on my own, I wouldn't get that benefit and I probably couldn't have a "just pay me a little because you're nice" tier: it's no problem to pay $1 or $2 a month to somebody if it's part of that bundle, but it's not worth the hassle if it's standalone. (This was why everyone on Patreon screamed bloody murder when they proposed unbundling charges a few years back.)

- Last but not least, not every creator is going to be comfortable putting together a Patreon-esque platform on their own. The more friendly the solution is, the more likely it is to cost money, and Patreon's pricing structure ends up being more competitive than you might think. WordPress membership management plugins that don't suck are often commercial, some with fees of $100+ per year; Memberful is free for limited use, but $25 per month otherwise; Substack charges 10% of your revenue and, like Patreon, doesn't cover processing fees that way.

Obviously none of these give Patreon a "lock-in" and it might make sense for creators to jump ship anyway; I'm certainly keeping my eye on alternatives. But I'm kind of a control freak. I genuinely don't think "anyone can build their own Patreon over a weekend" is true, and I don't think the amount of money they charge over and above processing fees is super unreasonable.

Re: Patreon lays off 13% of workforce

#260

Post by patrickyeon » Wed, Apr 22, 2020, 9:21 PM UTC

hammock wrote: post #102

patrickyeon wrote: post #64

> In March, Patreon wrote in a blog post, “Not only are patrons not leaving the platform, we’ve even seen many of them upgrade their tiers to support their favorite creators during this challenging time.” Additionally, the average income for creators was 60% higher in March than in previous months, according to the company. > Around that same time, however, Patreon said it saw patrons exiting the platform more than u…

The key to reconciling is seeing that "due to financial hardships" is a dependent clause. When patrons leave, they are asked to give a reason why. The % of those leaving who give "financial hardships" as a reason, is increasing. However, as also noted, the total churn rate (people leaving for any reason) is stable. They're not saying that more people are leaving than usual. They are saying that of the people leaving,…

Mmmm yeah I would believe that. I guess it could've been better written with something like "even so, some users are leaving and the ones doing so due to financial hardships..."

Thanks