Patreon CEO Says Creators Have ‘Incredible Leverage’ Right Now

Even in a post-pandemic world, celebrities with millions of fans, as well as those with just a few hundred fans, are turning to platforms where they can control their relationships, data, and the content they create. Patreon, which has amassed a $ 4 billion valuation in just eight years, is a platform to do just that.

“This is a great time to be a creative person,” said co-founder and CEO Jack Conte in an appearance on CNBC’s “Closing Bell” on Wednesday. “Creators have an incredible advantage now that they haven’t had for many years because these platforms were so focused on driving content production rather than getting paid.”

The company, ranked 48th on this year’s CNBC Disruptor 50 list, allows illustrators, authors, podcasters, musicians and other independent creators to receive crowdfunding directly from their audience.

“I think now people are starting to realize ‘oh, these are real businesses and creators should be making money like everyone else,'” Conte said. “We are very focused on providing the business infrastructure that enables creators to be successful in growing and managing their businesses.”

While social media influencers like Instagram and YouTube stars can get a lot of money, for the vast majority of creators, a new model was needed to connect directly with a paying audience. Platforms like Patreon free brainstormers from reliance on the internet’s trillion-dollar gatekeepers like YouTube parent Alphabet and Instagram parent Facebook, which keep most of the revenue generated by the Internet. advertising.

“A lot of the distribution platforms are starting to realize this and see that creators have great profit potential,” Conte said. “All distribution platforms, be it Spotify, YouTube, Twitter or Facebook, are creating ways for creators to earn subscription income from their fans.”

Twitter recently made the decision to start experimenting with a “tip pot” for individual accounts.

Patreon was, in fact, founded by former YouTube creators. The company is part of a broader trend influencing many creative endeavors, including journalism, where Substack has emerged as a way for journalists to be rewarded for their work through subscriptions and to leave larger media organizations behind. . Clubhouse and Discord, two internet communications platforms that made the 2021 CNBC Disruptor 50 list, provide new ways for people to share ideas and discover and engage with new audiences.

“Now I think the change that we are starting to see is that these platforms are realizing that creators need to be paid,” Conte said. “Ultimately, our competitive advantage is that we are the most creative company on the planet.”

Based on their business model, Patreon creators receive the majority of the revenue from their content, while Patreon gets a 5% cut in monthly revenue and a fee for transactions. It also has Pro and Premium tiers with more business support on the platform, but higher fees (8% and 12%, respectively).

Last month, the company raised $ 155 million in the new round led by new investor Tiger Global Management, with participation from Woodline Partners and previous investors Wellington Management, Lone Pine Capital, New Enterprise Associates, Glade Brook Capital and DFJ Growth. .

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