They’ve solved a customer support problem by ruining the utility of their platform, though. That’s not even shooting yourself in the foot, it’s cutting off your leg at the knee because you have a hangnail. Even if pro-rating is so mind-numbingly baffling that it’s an impossible-to-implement solution to the problem of theft-or-double-billing, I’ve still got a better one:
When a person pledges, they pay immediately. They then receive access to perks right away and access to the creator’s content for the remainder of the month and the next full month. Pledge on Nov 29th, pay for December and start getting billed January 1st. This still gives the creator exactly the same amount of money that they’re getting right now, it just moves the initial pledge point to the moment of pledging rather than the end of the initial partial month. If Patreon wants to make some money on that pledge, they can hold it in escrow and give it to the creator at the end of the month when it would normally come in.
If Patreon further wants to mitigate the variability of income per month based on how the processing fees worked out that time around, they can just round up their cut to cover the average percentage and give creators a buffer against that variability. They just got $60 million in venture capital, I’m sure they have a few hundred thousand to put into a “bad processing fees month” bucket.
I’ve put literally 10 minutes of thought into this. How did Patreon put an entire year into developing a solution and come up with something so unfathomably terrible?
I do believe I’ve identified the disconnect that both you and the Patreon execs are having. Yes, 500 people pledging only $1 to a single creator means five hundred 38 cent transaction fees, and there’s no way to distribute their impact. But that is an extremely creator-centric view of the platform that treats patrons as exclusive customers who only ever pledge to a single creator. If that were the case, Patreon wouldn’t prominently feature the number of other people you pledge to on your profile page.
Many, many people pledge a dollar to multiple creators. In that context, de-aggregating a single patron’s pledges means that someone splashing $10 around to 10 different people is suddenly paying 38% more for the ability to do that. Creators also understand that these $1 pledges are being made on a strict budget - often because they’re doing the same thing for their friends - and that a 38% increase in the cost of pledging means that 38% of those $1 pledges is going to disappear entirely, and a larger percentage of a pledge that no longer exists is still nothing.
Finally, this change is even harmful to creators who want to help their friends by pledging out of their Patreon income balance. Right now, that money goes directly to the other creator, with no transaction fee applied, so the creator gets a much larger percentage. Under the new structure, though, creators will no longer be able to make those pledges from their Patreon balance, and will be charged transaction fees despite the money already having entered the platform and been dinged once. So there’s another 5 cents in Stripe processing fee premiums that Patreon is creating for themselves where no revenue previously existed.
Apparently, Patreon’s approach to “researching” solutions to this problem was to ask creators if they liked dealing with the platform’s fees, and to ask patrons if they’d have a problem with paying them. Devoid of the context of a solution, I’m sure creators did gripe about fees - it’s an easy pain point - and I’m sure patrons were willing to pick up the tab for the transaction fee for the existing payment structure. This solution mutilates that payment structure, though, in a way that utterly explodes transaction fees for patrons while assuming that this explosion will have no impact on their ability to maintain the same quantity and amount of pledges. It’s idiotic.
https://twitter.com/Featherweight_/status/938947729803399168
https://twitter.com/Featherweight_/status/938771090343522305
