Are 80% of Patreon Pledges Hidden?
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Categories: Modern, Not an expert

Are 80% of Patreon Pledges Hidden?

a screenshot from the Graphtreon website with charts and statistics about total creations and pledges on Patreon
Graphtreon is awesome! Patreon is awesome! But Patreon is also another giant institution which we are are asked to trust but don’t have a way to verify

Patreon is essential for funding many types of digital creations. Patreon is not the best at processing payments or building and running websites. So a lot of us are very interested in them as a business because they offer an alternative to surveillance advertising and creating merchandise or face-to-face services to sell, but they seem kind of flimsy. Because they are a private business, we have to guess a lot. One of the things we have to guess about is whether they are a $24 million / year business or a $120 million / year business. (All sums in this post are in US dollars).

A service called Graphtreon pings Patreon’s API and website and collects information on pledges (payments from patrons to creators). On Graphtreon you can see that they paid about 14 million pledges for $24 million in December 2023 and 6 million pledges for $12 million in December 2019. Their goal is to keep 5-12% of the money pledged in addition to the fees they pay for payment processing. If we assume an average of 8% to allow for other revenue (it is the rate which new accounts since 2019 pay), then Graphtreon thinks they processed around $313 million and kept about $24 million in 2023 and processed around $157 million and kept $12 million in 2019.

But in January 2019, Patreon expected to process $500 million of pledges in 2019. They announced that they had reached that goal in November 2019. In 2024, a person familiar with the company’s finances told a journalist that they processed $1,500 million in 2023. That would mean they kept about $120 million in 2023! That puts their 470 employees in September 2022 and their $400 million of debt to firms like Joshua Kushner’s Thrive Capital in a different light.1

People close to Patreon imply that Graphtreon only recorded a third of their business in 2019, and a fifth of their business in 2023.

Graphtreon tells you that they can’t count pledges to creators who hide their earnings, and that they will unlist specific creators if asked. So they don’t cover every pledge. But do they really show only 20% of all pledges? And if so, what do the 80% ‘dark matter’ look like? Are they creators of sexy or angry partisan things who can exist on Patreon as long as only fans know they exist? Are they pledging more than the customary $1 to $5 per month for ‘supporting a cool free thing on the Internet’? The average pledge size on Graphtreon has always been around $1.50 or $2 but are the creators they don’t track different? Some of the complaints on TrustPilot suggest that some creators are using Patreon in different ways than I or the creators I support use it (asking for pledges in the tens of dollars for something substantive). Their Benefit Guidelines and Community Guidelines show what ways people have tried to use the site.

If I understood their business better, I might understand why they keep pushing creators to offer exclusive content through Patreon, rather than byproducts of the creative process like ‘a longer version of our podcast’ or ‘one of my sketches per week.’ These days Patreon’s new sleek corporate voice is always begging creators to know that it listens to them and their concerns, but they have never been frank and precise about how they understand their business and why they think creators should see it their way.

Can any of my gentle readers comment? I never knew anyone face to face to talk about things like this. (Ancient historians with small hobby blogs don’t have conventions and talk shop at the bar in the evening). I am intrigued by business as an intellectual problem2 but I never created online content that thousands of people were willing to pay for. I make more money and reach more people by writing for magazines (and in the near future from my second book).

Edit: Tom at Graphtreon points out that Patreon creators can hide either the existence of a pledge, or the value of their pledges, or both (Patreon Help Center). About 40% of the creators who they can see hide their earnings. So not every pledge which is counted as a Paid Membership appears in Estimated Monthly Payouts, and the average value of a pledge could be higher or lower than dividing estimated monthly payouts by paid memberships in Graphtreon.

PS. some other statistics: Patreon told Wired it had 200 employees in June 2019 (“bright pennants indicating whether the workers listed below (200 of them in all) work for the legal team or for ‘community happiness.'”), and stated in a press release that 80 employees were 17% of its workforce before layoffs in September 2022. So it had about 470 employees at that date.

(scheduled 19 May 2024)

  1. TechCrunch listed $165 million in debt from founding to July 2019. TechCrunch mentioned $90 million of funding in September 2020 and $155 million in April 2021. 165 + 90 + 155 = 410 The last round treated Patreon as worth $4 billion which would be 33 times their maximum estimated revenue in 2023. If we assume that revenues are proportional to pledges recorded on Graphtreon, the 11 million pledges in July 2021 compare to 13 million in July 2023, their revenue was about 100 million in 2021, and valuation was 40 times revenue (10 to 20 times is a conventional rule of thumb). ↩︎
  2. eg. The Fourteen Twenty Nine Hypothesis by Siderea or random redditors who explain “Patreon is as safe as any platform for creators which is basically not safe at all. That is not a dig at Patreon it is just the truth of being an online creator. If you are serious about having an online presence get your own personal website and bonus points if you have an email newsletter.” ↩︎
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