U.S. Markets open in 1 hr 4 mins

Patreon Launches Tiered Pricing for Creators, Introduces Rates for Micropayments

Janko Rottgers

Membership services platform Patreon is growing up: The company announced Tuesday that it is moving away from its one-size-fits-all pricing model for creators, introducing two new tiers in the process. In addition, Patreon is also standardizing its payment processing fees, and introducing a new dedicated rate for small-donor transactions.

Patreon’s cut of the membership fees for the tier most closely resembling the current model is being raised by 3 percent, but existing members are grandfathered in to keep the existing pricing as well as payment processing fees. “Nothing changes for existing creators,” promised senior vice president of product Wyatt Jenkins.

Related stories

Ben Folds Launches Patreon Page With Exclusive Live Streams

Patreon Now Has Over 3 Million Patrons, Expects to Pay $500M to Creators in 2019

Reddit Teams Up With Patreon to Bring Paid Memberships to the Masses

There are quite a few changes for anyone signing up for Patreon going forward though: Most creators will be able to choose between two plans: A Lite plan that comes with just one membership tier, meaning all of your members pay the same amount every month. The second option is a Pro plan, which offers membership tiers, analytics, app integrations and more.

Patreon keeps 5 percent of any membership fees collected by creators on the Lite plan. For Pro creator, that cut is now 8 percent. Both Lite and Pro creators have to also pay payment processing fees for each transaction.

In addition to these two plans that are open for everyone, Patreon is also debuting a Premium plan for creators with a sizeable base of supporters, which includes an option for merchandise, and access to a dedicated partner manager. Patreon’s cut from this plan is 9 percent plus payment fees, and there is a $300 per month minimum base fee. At least for now, this plan is also only available on an invitation basis.

Alongside with these changes, the company is also standardizing its payment processing fees. Previously, it charged creators anywhere from 2 to 10 percent per month to account for fees from payment processors. Now, it is introducing a new payment processing fee of 2.9% plus $0.30 for each transaction for any charge of $5 or more. For smaller amounts, say a $1 a month monthly membership, the company is introducing a new micro-payment fee of 5% and $0.10 for each transaction.

“Patreon has grown a lot, we have really different types of creators,” Jenkins said talking about the new tiered model. The company now serves both small painters with a few dozen supporters, and independent media organizations with multiple paid staffers, he said. In light of these differences, it didn’t make sense to treat everyone the same.

That’s especially true for smaller creators. Jenkins said that Patreon had noticed that many of them actually drop off during the sign-up process as soon as they are asked to choose multiple supporter levels and rewards. “It was almost like we tried to speak to 2 audiences in the same way, and it wasn’t working,” he said.

However, Jenkins also acknowledged that the move to tiered pricing, and the increase in fees that goes along with it, was meant to assure creators that Patreon will be around for the long haul. “We are able to create a long-term, sustainable, viable company,” he said, adding that Patreon could have chosen to turn itself into an acquisition target instead. “What we are saying to the market with this move is: We are going to stay independent,” he said.

Jenkins joined Patreon in late 2017, just days before the company attempted its last major pricing change. Back then, Patreon announced that it would charge payment fees to consumers going forward, leading to a rebellion of creators who feared that they would lose supporters over those added fees.

Patreon quickly reversed course, and Jenkins said that the company learned a lot from the fiasco. “Creators don’t want us between them and their fans,” he said, which is why the company decided to continue to charge payment fees to creators. This time around, the company also got more feedback from its creative community, with Jenkins saying that it talked to over 1000 creators about the new changes.

Still, Jenkins fully expects some creators to resist the change, even though existing members will be able to keep their 5 percent split going forward. “There is this natural tension between art and capitalism,” he said.

Sign up for Variety’s Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.