Recently the creative subscription service Patreon announced that they were changing their fee structure- instead of creators paying a single calculated fee out of their total received pledges for the month, patrons would be charged a per-pledge fee. It was necessary, they said, to cover the increasing cost of card processing & such.
Now, on the surface, this doesn’t seem that horrifying, many services charge the buyer/backer the financial transaction fees. But when people dug deeper, they found that the proposed fee structure, and the fact that it was per individual pledge, meant that people who pledged small amounts (in the $1-$5 range) to many creators (rather than larger amounts to one of two creators) were going to take a large financial hit. Almost 35% increase in their monthly costs. And Patreon wasn’t giving creators the option to keep the costs coming out of their pockets, instead of their backers.
The outcry from creators & backers, was immediate, vocal, and dramatic. No one thought this was a good idea, and because many of the $1-$5 backers are on limited budgets, they suddenly found themselves having to decide who they wanted to support. Creators reported that they were basically hemorrhaging low level backers- loosing hundreds and hundreds of dollars of expected income in a few hours.
What does this have to do with Basic Income? Think about it- many of those creators rely on Patreon for a large chunk of (if not all) of their stable monthly income. Many of them have some high level backers, and hundreds of $1-$5 backers. And one decision by the corporation in charge of the service suddenly threw people’s budgets and livelihoods into doubt. People were afraid of not being able to make rent payments, not being able to buy needed medicines, having to hit the food bank. The move was fundamentally devastating, and equal, in many ways, to suddenly being laid off.
If we had a Basic Income, a citizen’s stipend, then there’s a few things that would have happened differently:
- Patrons who back at lower levels, would be less likely to have their monthly budgets impacted by such a change, and less likely to drop pledges.
- Creators wouldn’t have found their monthly income suddenly threatened.
- People would have more financial flexibility to back creative projects- meaning those $1 pledges that cause Patreon such consternation become less of a backbone of Creator income.
- Creators would have less of a need to produce-for-pledges to make ends meet, so they could focus on larger or more detailed projects.
Now, the good news is that Patreon heard the outcry, and has walked back their decision to change the fees. They say that they sill need to deal with the increased processing charges, so there’s still big question marks in the air, but the sense of impending doom has lifted. The bad news is that many Creators still lost backers, which means lost income. Not all of those backers will jump right back on board; they may wait and see what happens, or they may not see the news that the fees aren’t changing, or they may have moved on. Creators will need to actively re-engage and solicit backers to regain what they’ve lost. So even though Patreon isn’t going forward with the train wreck they created, their user base, the Creators, are still going to be dealing with the cleanup.