Sad news about Patreon

Some sad news out about Patreon recently from this article.

To supplement that, here’s a great deep-dive video that digs into the full company history of Patreon, the underlying economics of the platform, and some of the same concepts as you’ll see in the article, for fans of long-form video.

The written article gets into some complex legal minutia, and the video is great but also super long, so I’ll summarize.

Current issues with Patreon

It appears Patreon has been taking legal action to overturn an older law originally applied to VHS tape distribution. This law prevents them from being able to share the data associated with video views on their platform. Patreon is claiming, basically, that this VHS privacy law is antiquated and didn’t anticipate the modern Internet, so that should allow them to share whatever user data they’d like.

I think we all know what’s really going on here. Patreon took a bunch of venture capital money to try to grow bigger as fast as possible, and is now taking that poor business decision out on their own users and creators by attempting to sell their own user data to make money.

When Patreon comes across a law that’s meant to protect user and creator privacy, instead of innovating their technology (which would be too expensive), they instead choose to spend even more money on legal fees to try to overturn existing common-sense laws, and find a workaround.

Why this is happening (enshittification strikes again)

Always remember the steps to the gradual enshittification of large online platforms:

1) First, the platform is good to their users, and offers an amazing product at a fantastic deal, to get a bunch of people to sign up. This shows venture capital investors that a platform is both widely popular and potentially a valid business model. But, it’s all an illusion, because the platform is actually losing money hand over fist on every sale they make.

2) So, next, the platform starts being good to their business customers at the expense of their original users, to try to get profitable. This would be where we’re currently at with Patreon: attempting to sell their user data to other businesses, and then getting whiny when the law prevents that from happening easily for them.

In step 2, the platform might get a little bit worse, but it still works great for most people, most of the time, and maybe the business does get profitable.

In traditional capitalism, when it’s working properly, this would be the happy ending to our story: a nice, sustainable little business that works out well for everyone involved.

Maybe the users have to see a few ads here and there to keep the business going, but maybe they’re also mostly relevant, helpful, and infrequent ads, so no harm no foul.

Unfortunately, nowadays that’s not good enough for gross venture capital investors, who need to see endless business growth at insane margins and an eventual IPO so they can cash out.

3) So, finally, in an attempt to appease their venture capital overlords, the platform starts squeezing all of the juice out of the lemon. The platform becomes a useless pile of shit as it stops caring about everybody: the original users, the business customers, and everything else that’s not an ad. The whole house of cards comes crashing down, and poof! No more platform.

4) Rinse and repeat with the next platform. Hey, venture capital only needs 1 out of every 100 of their investments to work out to make money for themselves, right?

Perhaps a better way to do this might also be a simpler way. Maybe just build a better product, sell it to people at a fair price, and don’t take any outside investment at all? Wouldn’t a $500 million business be something that’s OK to build? Why does it need to be a $5 billion business?

This was what Bandcamp as an artist platform really got right for a long time: its original founders saw value in staying small as a company, intentionally.

Where Patreon goes from here

How this all shakes out remains to be seen. Let’s hope this isn’t the beginning of the end for Patreon. It’s been a great platform for getting smaller creators paid for a good long while now.

Geez, what a great run, and the core idea of subscription-based crowdfunding directly to the people who’re making the stuff really has really been an innovative and helpful new business model.

Unfortunately, any new business model that ends up turning into yet another venture-capital funded corporate middleman over time also ends up being just more of the same.

Here’s another article telling the story of yet another creator trying (and failing) to make a living using Patreon.

I’m hoping this platform finds a way to right the sinking ship, because I think we all agree that their original mission of supporting art and artists is something to get behind.

Where art fans and artists go from here

Art fans: the best option to support your favorite artists is always by paying them directly, as often as you can afford to do so.

Artists: be your own platform.