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Patreon cuts deep inside creators’ pockets

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Re: Patreon cuts deep inside creators’ pockets

#311

Post by unity1001 »

busterarm wrote: post #152
tpurves wrote: post #105

What many people don't realize is that the operational and customer service costs of payments don't scale with payment amount. Customers will cost almost just as frequently dispute, have questions, have problems, ask for help, attempt to defraud etc with a $1 transaction as they will a $100 or $1000 transaction. This is the real killer with micro payment schemes. Customer service costs scale more with number of payme…

Yeah, all of the other payment processors have settled on somewhere between 2-4% fees to handle fraud. See PayPal. So either Patreon has an order of magnitude more fraud going on or is massively wasteful in its business operations. Probably both.

Patreon handles EU VAT and similar digital VAT for its users. Otherwise each and every one of those donations will need to be handled and filed by the creators.

To illustrate how bad it can get - in EU VAT, if your yearly sales are over 30,000 Euros (it may even be 10k, I don't know the latest limit), you have to charge your customers/patrons the appropriate tax rate of the country that they are in. And if you don't, you may end up having to deal with the tax authority of that particular country.

People take this lightly, but as many are finding out, its serious business.

...

And - fraud is not handled by Paypal. Any chargeback, fraud, refund is your responsibility. You can even get your Paypal suspended for those reasons.

Re: Patreon cuts deep inside creators’ pockets

#312

Post by unity1001 »

lalopalota wrote: post #169
rglullis wrote: post #157

Earlier quoted context omitted.

Ethereum is moving to PoS in less than two months. Can we please drop this BS excuse of an argument? (Before you reply with the usual "Ethereum devs have been promising PoS for years" line, I will tell you this: I pledge to drop all work on Hub20 if Ethereum doesn't complete the transition by the end of the year.)

How is this a "BS excuse of an argument"? Is proof of work being used?? Hmmm, yes it is. Thus, the argument stands.

Environmental cost is a BS argument because nobody talks about the environmental cost of the already existing technologies that they are using. Everything we plug into power in our houses comes from the same power sources which the crypto miners also use. They dont come from elsewhere. So there is no difference in between using an electric car and crypto in that regard - you are still using carbon-producing energy. All energy needs to be green. Crypto, EV, gaming, this or that technology or application of technology cannot be targeted specifically.

Re: Patreon cuts deep inside creators’ pockets

#313

Post by unity1001 »

fartcannon wrote: post #137
krnlpnc wrote: post #86

15% is not a deep cut. That’s a totally a reasonable cost for smoothly running the infrastructure necessary to support a creator with a monthly subscription model.

That's about 10x more that I'd consider reasonable for what is effectly hosting a static website and bulletin board. I think we've all just had our expectations blown out of the water by Steam (and the subsequent app stores).

Does your static website and bulletin board also process the digital international tax schemes like EU VAT and liberate you of the legal and financial responsibilities of processing and filing each of the payments that you receive one by one?

Re: Patreon cuts deep inside creators’ pockets

#314

Post by unity1001 »

lazypenguin wrote: post #62

I never understood Patreon taking a % of money earned from creators. Seems unreasonable to me. I use Ko-Fi which has an optional “gold tier” with a fixed monthly price for more features. It also has an option for you to contribute a % of proceeds to Ko-Fi if you want. I happily paid for gold. https://ko-fi.com/

> I never understood Patreon taking a % of money earned from creators

Possibly because you are not processing and remitting EU VAT and other digital international taxes which you should. Actually, its doubtful that a lot of people who engage in such creator activities are even aware that they should need to file taxes for that kind of income in the first place, leave aside process digital tax.

Patreon handles all of that and reports and pays it to legitimate authorities, removing all the legal and financial responsibilities from the creators' hands. As international digital tax schemes proliferate (Japan already has one or planning one, other OECD countries also), this is going to become even more important. Not that its not important right now.

This is before the fact that all chargeback, fraud etc are handled by Patreon.

...

A lot of these people, including you, confuse Patreon and similar platforms with payment platforms like Paypal. They aren't the same. At Paypal, Stripe etc, not only they don't handle digital tax for you, but also you are on your own regarding chargebacks, fraud and refunds. And if you have more than 5% of them, they can just disable your account.

You don't have those issues with Patreon.

Re: Patreon cuts deep inside creators’ pockets

#315

Post by onetokeoverthe »

cowtools wrote: post #258
deanCommie wrote: post #240

Earlier quoted context omitted.

https://news.ycombinator.com/item?id=9224

I mean, he's right. all these file-sharing services like dropbox merely exist because the general public doesn't know how to use something like bittorrent. Maybe you can grift off of that ignorance for a while, but that doesn't mean it's a sustainable business model.

No post body was provided.

Re: Patreon cuts deep inside creators’ pockets

#316

Post by busterarm »

unity1001 wrote: post #311
busterarm wrote: post #152

Earlier quoted context omitted.

Yeah, all of the other payment processors have settled on somewhere between 2-4% fees to handle fraud. See PayPal. So either Patreon has an order of magnitude more fraud going on or is massively wasteful in its business operations. Probably both.

Patreon handles EU VAT and similar digital VAT for its users. Otherwise each and every one of those donations will need to be handled and filed by the creators. To illustrate how bad it can get - in EU VAT, if your yearly sales are over 30,000 Euros (it may even be 10k, I don't know the latest limit), you have to charge your customers/patrons the appropriate tax rate of the country that they are in. And if you don't,…

And every other payment processor modeled VAT without raising their fees. Your software developers only need to model it once and make updates. You don't have armies of humans dealing with this to necessitate 10-20% fees.

And no payment processor or retailer deals with fraud. They all suspend your accounts for chargebacks. The fee is the built in fee to cover _losses due to fraud_, not for "handling" it.

Re: Patreon cuts deep inside creators’ pockets

#318

Post by unity1001 »

stevenjgarner wrote: post #125

So the article criticizes Patreon for having "additional charges for non-US PayPal payments as well as separate currency conversion fees that are mysteriously high at 2.5%", offering donorbox.org as a respite, yet no-where can I seem to find what donorbox charges for non-US PayPal payments and currency conversion?

Donorbox doesn't even seem to process international VAT. It seems to be geared for non-profits, which I really doubt the author's writing gig qualifies as. So basically he is just dodging tax and all legal responsibilities.

Re: Patreon cuts deep inside creators’ pockets

#319

Post by unity1001 »

Barrin92 wrote: post #148
eterevsky wrote: post #135

YouTube takes 30% for "joining" the channel.

Youtube is also a genuine platform that gets you an audience and discoverability, gets you ad revenue, and hosts your content (which in the case of streaming video is very much non-trivial technically). Patreon is a donation button with a feed. It's effectively a payment processor and in most of the world the margins in that industry are a fraction of a percent. This is Youtube vs Patreon ( https://www.pymnts.com/sub…

That's Vimeo, not Patreon. I heard that Patreon already solved that issue by working with Vimeo.

And you can't post member-only videos at Youtube. Also, Youtube is just Youtube - you can't monetize your presence in other platforms with it.

Re: Patreon cuts deep inside creators’ pockets

#320

Post by unity1001 »

egypturnash wrote: post #19
tootie wrote: post #2

Apple take 30%. You have to understand that you're not paying just for the service, but the reach. You can DIY your donation platform and the tech side isn't rocket science, the issue that platforms like Patreon and Apple have access to orders of magnitude more users than you can ever generate on your own.

I make my living off of Patreon and I can confirm that they do jack shit to promote your work unless you are already one of their top earners. “Paying for the reach” is a bullshit excuse for the amount of money they’re sucking off of creators to try and make an immense payout for their VC. My spreadsheet says the total cut of my take that goes to Patreon and payment processing is about 10-15%, but I am an Early Adopt…

> this dude who doesn’t have this deal and has their usurious international fees on top of it, it’s definitely a bad choice.

That dude writes as if he is unaware of the existence of the government and tax laws. He is on a platform that is built for non-profits despite obviously not being a non-profit. And he does not seem to have heard of any kind of thing like international digital tax or the like.

When you just ignore the existence of such things, of course ~14% looks like a lot.

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