(2024-02-05) Westenberg The Creator Economy Can't Rely On Patreon

Joan Westenberg: The creator economy can't rely on Patreon. I've been thinking about a friend who used to run a cooking channel on YouTube.

She was able to quit her office job and do her channel full-time.

Eventually, her viewers were asking for more recipes, more elaborate productions, and fancier kitchen gadgets to review. Suddenly, she needed some serious cash to keep it all going. She started taking on sponsors, then product placements, then brand deals.

She felt like she had no creative freedom or joy in her creations. And the only answer had been a pivot to direct financial support. But despite racking up tens of thousands of views per video, she struggled to convert more than a tiny fraction into paid subscribers.

From Ghost to Patreon memberships and everything in between, there are more options than ever for artists, musicians, writers, and video producers to get paid directly by their audience. It's the 1,000 true fans theory that we've all been sold for the past 15 years - that all you need is a strong mailing list of people who give a shit, and a healthy living will follow. Unfortunately, a theory is all it is.

Data from Patreon and Substack suggests the average conversion rate from follower to paying fan is about 5%. This means a creator would need a total fanbase of 20,000 followers to yield 1,000 paying supporters.

Relying solely on organic user payments rarely provides reliable and adequate income.

creators are more often stranded in the discouraging and disappointing gap between audience reach and monetisable support.

The supply of content creators hoping to profit from their work directly outstrips demand. This is the fundamental reality that I don't think can be hacked (at scale).

And even when virality strikes, all forms of content rely on easily substitutable free alternatives

The transactional ask inherent in requesting money damages community trust and goodwill. Turning fans into individual revenue streams backfires, breaking the genuine parasocial relationships creators build with their audiences. The shift from viewing fans as community members to income sources changes social dynamics in ways many find unpalatable. ("genuine parasocial" is self-contradictory)

This is not to say achieving direct fan funding is impossible

it remains the exception rather than the norm.

More commonly, independent creators utilise audience monetisation to supplement other incomes. Partnering crowd-funding models with advertising revenue, part-time work, freelancing, grants, merchandising, or institutional funding helps mitigate the uncertainty of relying purely on consumers.

And that's a good thing. Hybrid income streams hedge against the risk of inconsistent audience support drying up.

Baldur Bjarnason: Media needs more than subscriptions and streaming.

Joan Westenberg wrote the following in The creator economy can’t rely on Patreon.:

Subscriptions are the hardest media or cultural product you can sell. The difference in effort it takes to sell a subscription versus a regular product such as an ebook is dramatic, and once you have the subscriber it’s a struggle to keep them.

The choice for most creators in a subscription- and streaming-dominated marketplace is to either get peanuts (sell your own subscription) or peanuts (Spotify-style royalties).

You can’t live on peanuts when you’re starting out and developing your craft.

We need active markets for single-sale products (books, VoD, Bluray, CDs, vinyl, etc) if we want sustainability for new entrants to the field

But these kinds of products are threatened everywhere. Amazon has several genres of ebooks and audiobooks locked down and is starving them with inattentiveness. I'm not sure what that means.

Music is almost entirely streaming

Video is also almost entirely streaming

Most of the weird and inventive movies that came out of the late eighties, nineties, and early 2000s didn’t make their money in the cinemas. They earned their money through VHS and DVD video sales.

Unfortunately, the only way to counteract this in a capitalist society is though consumerism. Buy those books, ebooks, albums and movies and try to buy them either direct or through artist-friendly venues.