“Our goal, the reason why Patreon exists," Patreon CEO Jack Conte told Billboard, "is because we want to fund the creative class, the whole creative class, that’s the mission of the company,”
Towards achieving that goal, Patreon announced last month a number of metrics showing the platform’s impressive growth, this includes: a million active patrons up from 500K a year ago; 50K active creators up from 25K during that same period; and, perhaps most significantly Patreon is on-track to facilitate payments of a $150 million to creators in 2017, up from the $100 million the platform helped creators earn in the three years between its inception in 2013 and 2016.
“I think it’s the pent up demand on the creator side for this product,” says Conte when asked what’s fueling the growth. He noted that Patreon takes only 5% of the subscription funding with the majority going back to the creator which he says is far less than platforms like iTunes or YouTube take.
While Conte declined to disclose Patreon revenues, 5% of the $150 million the platform forecasts it will pay creators this year amounts to $7.5 million for company, which currently has 75 employees. According to Crunchbase, Patreon has had three rounds of funding totaling $47.1 million with its last round of $30 million in series b funding closing in January 2016.
Among Patreon’s more well-known musicians are Kina Grannis, Pentatonix, Jacob Collier and Amanda Palmer who reportedly receives roughly $35,000 a month from her fan subscriptions. But there are other creators, including YouTube stars, podcasters and comedians who earn more and, in fact, in 2016 there were 35 Patreon creators who made more than $150,000.
Conte explains the impetus behind Patreon was borne out of his own frustration as a musician and YouTuber. The 32-year-old CEO, who also plays in Pomplamoose with his wife, spent roughly d $10,000 on a dubstep video (below) with robots and a recreation of Star Wars’ Millennium Falcon which took him 3 months to build. Though the YouTube eventually received more than two million views, Conte says he took home only a few hundred dollars for all his time and hard work.
“That’s just so wrong,” says Conte. “It’s such a broken system and it was so clear that the web was not doing a good job in taking artists’ value and converting it into dollars that would go back to the artist. There are a million reasons for this mostly having to do with how online advertising works and its Inefficient transfer of finances from advertisers to creators.” (This is also what is at the core of the music business' frustration with YouTube and how little it pays out to rightsholders commonly referred to as the "value gap.")
Conte says that experience was his eureka moment where he began to think about asking his fans to give him a dollar or two a month much in the same way membership platforms like PBS’ KQED does or SF MOMA does.”They all have wonderful membership platforms where people support the organization and pay monthly recurring fees so imagine instead of Spotify, if each individual creator had their own Spotify with their own subscription revenue business that would come directly from fans with no advertising. That was the idea.”
Conte pitched the idea to Patreon co-founder, Sam Yam (his freshman year roommate) who built Patreon in three months. “ We Launched Patreon and like two weeks later I was making $4,000 month as a creator instead of $150 bucks every few months from ad revenue,” Conte says. “We started launching a ton of new creators on the platform. This idea of membership over the last three years has really started to take-off.”