I was wondering just now, has anyone here been following the Patreon changes? It strikes me as to how what they’ve done is a very clear contrast to how Monzo do this.
If you’re not already aware, they changed their fee structure with no warning, and the new one shifts the charges from the creator to the donator (until now, dontating $1 meant you have the creator $1 and the charge was cut from that, to give the creator $1-charges. The revised structure results in the donator paying the charges, so their payment increases to $1+charges. There’s more complexity, but that’s the nutshell).
Part of the problem appears to be that Patreon weren’t open about the changes, and dropped them out of the blue with no transparency. The other part is the fact that they have and still seem to be lying about the reasons for the changes. Originally it was “to improve things for the creators”, most recently it’s that they need more money to “keep the lights on”.
The former is a flat-out lie, as it doesn’t improve anything for creators. The latter is implausible, given the amount of VC funding that they’ve received.
I’ve seen two suggestions for the real reason:
Their VC funding has overvalued the company, and they need to increase their revenue. Shifting charges to the donator and unbundling them is the easiest way to achieve that.
They’re concerned that bundling charges means that they’re effectively a bank and should therefore be subjected to increased regulation, and most of the mess is a result of avoiding this.
Bundling: Up til now, if you donate $1 to ten creators, Patreon will take $10 from you in one transaction, and then distribute it among the creators for you. Unbundling means that Patreon won’t hold the money themselves as instead ten $1 donations will be processed a ten separate transactions direct to each creator - so you can see where the increased fees are now, ten fees instead of one in this example.
I find this an interesting situation on two levels. One, it’s an example of how original aims can run up hard against laws and regulations around the handling of money. Two, it’s an example of how making one bad PR move can massively damage a brand, perhaps critically.
We’ve seen some of the former here in how Monzo found that foreign ATM transactions were costing them too much, and again in how card top-ups have hidden costs. The difference being that in both cases so far, Monzo have been open and transparent and not just dropped any changes on us. We haven’t yet seen the latter, as while some people so far seem to have been unhappy about some changes, they don’t seem to have been in the majority. But how long can this last? What if Monzo does make a brand-killing mistake at some point? How possible or likely is it that this could happen?
Anyway, I was wondering if any people had any thoughts, especially those (if any) who use Patreon.