“What most people don’t really understand is that all content creators – people who put things on the internet, and populate the shell of the web with awesome things to enjoy – are all in the same thinking-boat with ad revenue. They’re putting things on the web that hundreds of thousands or even millions of people are enjoying on a regular basis, but then trying to monetise them by stealing people’s focus for advertisers for 15 seconds.”
Jack Conte, musician and founding CEO of crowdfunding service Patreon, is on a verbal roll, in what started as an answer to Music Ally’s question about the breadth of art being funded through his company, but quickly turned into a riff on the bigger picture of how internet business models have affected creators of all stripes.
It’s not that he’s anti-advertising, as such. He just recognises its limitations, and who they tend to affect most. “That has turned out in aggregate to be a very successful model for the companies that serve the ads and the companies who have control of that space. But for each individual creator, it’s just not as lucrative unless they’re getting tens of millions of views,” he says.
“There are people who have an audience of 100,000 fans. Imagine that: 100,000 weekly visitors who are enjoying your stuff. But with modern advertising CPMs, that’s nowhere near enough to make a living. Yet that’s a football stadium full of people! That should absolutely be enough.”
Music Ally is talking to Conte on the eve of the announcement of Patreon’s biggest coup yet: Amanda Palmer has signed up. Yes, THAT Amanda Palmer. Having raised $1.2m on Kickstarter in 2012 – still the largest sum raised by a musician for their own music on Kickstarter, since Neil Young’s PonoMusic falls more into the technology sphere – she’s now trying Patreon’s alternative system of recurring payments from fans.
Palmer’s Patreon goes live tonight, and will fund a stream of new songs, videos and writing. Fans can commit to paying as little as $1 per new item of content to access the patron-only feed, with more rewards if they pledge more. “Keepable, playable, readable downloads” at the $3 tier; extra “random surprise” posts, photos and poetry at $5; a monthly webcast at $10; and “inner circle” access for 30 patrons paying $100 per new item, including guest-list entry to shows, postcards and meetings in-person.
“She’s the perfect paradigm of the kind of thoughtful and intense relationship [with fans] that I think is just incredible. I have so much respect for her as a businesswoman, as a creator, as an artist,” says Conte.
“The fact that she’s going to be communicating with her fans and hanging out with them using Patreon software, more than anything to me, is a tremendous responsibility. She’s going to push the boundaries of our platform, and find the holes where it doesn’t feel like being on-stage. We’re going to have to build things that satisfy her, and that’s a good way for us to step up.”
It’s a big moment for Patreon, although the company’s growth since its launch in 2013 was already impressive. Conte is one half of Pomplamoose, one of the bands that initially came to prominence on YouTube. He saw Patreon as a way for fellow YouTubers – but also other kinds of creators – to look beyond advertising revenues to find a more sustainable income.
“I’ve been a full-time musician for 10 years: I have a million ideas in my little black book that I keep in my laptop case, and one of the pages in that book was ‘what if I charge my fans a buck per video?’,” he says. “To see it now have become this 22-person company, that’s pretty crazy. I was not expecting the rate of growth or company change. It has been one of the most difficult yet joyous times.”
Conte is now walking a fascinating line, given the ongoing tension between the music and technology industries. He’s a working musician who tries to devote Fridays, Saturdays and Sundays to writing and recording, not to mention gigging. On the other hand, he’s the CEO of a startup that raised $15m of funding last year from investors including VC firm Index Ventures and Hollywood talent agencies UTA and CAA, and which by November was paying out $1m a month to creators.
“It’s a difficult balancing act, but it’s important for the business. I don’t want to approach this from a startup’s viewpoint, I want to approach this from a creator’s standpoint,” says Conte, who notes that despite regularly finding himself on business conference calls during supposed studio time, Pomplamoose managed to release 14 videos in 2014, with 12 more planned for this year.
The band currently receive just over $6.7k from nearly 2,000 patrons on Patreon whenever they release a video, while Conte’s solo profile has 1,400 patrons paying $5.4k per video released under his own steam.
He hopes that being his own user will ensure Patreon always keeps creators as its focus, although he admits to mistakes – recent criticism over how the company is handling new European VAT regulations, for example. “We’re working on some really awesome solutions, but we were behind the curve on that,” he says. “It’s just so important that we’re always thinking about creators and the creator’s perspective here.”
Conte is keen for Amanda Palmer’s decision to use Patreon not to be seen as a rejection of Kickstarter. In fact, he points out that several creators use Patreon for their monthly, ongoing funding, but combine it with one-off Kickstarter campaigns for specific projects.
Examples include Julia Nunes, who makes $2k a month from nearly 500 patrons on Patreon, but who also recently raised $134k on Kickstarter to mix, master, commission artwork and hire a PR company for her new album. Outside music, there’s web-comics creator Zach Weiner, who makes nearly $8.9k a month on Patreon, but whose latest Kickstarter campaign raised $384k for book project Augie and the Green Knight.
“People are realising there are different things. Patreon is a way to connect closely with fans and to be there for them all year long, no matter if you have a CD, a book or a movie coming out,” says Conte. “It’s a way to make a living doing what you love, and then Kickstarter is an awesome way to raise funds for a huge project. We’re seeing people use both successfully, at the same time.”
Mention of Weiner and the burgeoning community of web-comic creators on Patreon is what leads us to Conte’s riff on advertising-supported art, and how many musicians, illustrators, filmmakers, writers and vloggers alike are facing exactly the same challenges in turning their online reach into liveable incomes.
“We’re all in the same boat of trying to monetise our stuff with ads, which in the end is not as lucrative for each individual as allowing the people who enjoy the stuff to pay for it,” he says.
This, in turn, leads on to a discussion about how the defence of new, digital business models often focuses on aggregate figures – how much money they’ve paid out in total to rightsholders or artists – rather than tackling the specific questions about the impact on individual creators.
In music teams, it’s the now-familiar sight of a songwriter complaining about their paltry streaming royalties cheque, and a streaming company responding by telling them about its total payouts. “We often hear this from the streaming companies: a third of label revenues are coming from streaming, or they paid out this much to artists this year. Yeah, that doesn’t solve the problem,” says Conte.
“The problem is for a person who has 15,000 fans, which by the way, is a shitload of fans! We don’t think it is because we’re used to hanging out on YouTube, but a person who has 15,000 fans, that’s a shitload of fans and it should be enough. That’s a basketball stadium full of people! And if you have 15,000 people who love the things you make – and watch them or read them or listen to them regularly – and you’re not making a living, that’s not your fault. It’s technology’s fault.”
Conte certainly can’t be written off as a luddite, carping from the sidelines without understanding the technology that he’s criticising. But perhaps the key to Patreon is that it’s not just about fans paying money to creators. It’s about creating communities, and in that it’s certainly not alone: Bandcamp and PledgeMusic are the other two obvious examples of platforms where the creator-fan dynamic is as much about deeper relationships as it is about money.
This, at least, is where Patreon is heading: in the short-term, there’s an iPhone app coming in the summer. But in the long term, Conte wants to shake up the way fans and creators interact. “Community management is a baby. An absolute baby. It is in a primitive, disgustingly simple form right now, and 10 years from now, community management is going to look so different to the way it looks today,” he says.
“It’s ridiculous: you don’t know anything about cross sections of your fans: which like to communicate with you more often, which just want to hear from you once a month. You don’t know who wants to pay you, and you don’t know why.”
For all the industry interest in Facebook and Twitter as platforms for fans and creators to get closer, Conte thinks there’s a lot more improvement to be made over the coming decade.
“The most you can get now is ‘engagement’ – a like, a comment – which is a very binary thing. That’s hardly social: it doesn’t feel like real community. At the end of this next decade of community management evolution, it’s going to feel way more naturally connected and actually social. Not the tech company version of social,” he says.
“That’s something we’re totally focused on. These are the people paying for your life: they’re making you able to be a professional artist. How does Patreon as a company allow them to feel intimate with the people they love, and how can we give creators the tools they need for that?”