There’s never been a better time to be a creator. Now, with abundant internet bandwidth, cheap creation tools and millions of people willing to pay for exclusive content, and a growing number of platforms like Patreon emerging, the barriers to creation should be near zero. But stakeholders from businesses to governments around the world are asking: how do we help creators turn their artistry into lifelong, sustainable careers?
Earlier this fall, Patreon submitted evidence to the British Parliament’s Communications and Digital Committee’s Inquiry on A Creative Future. In our submission, which you can read in full below, we elaborate on what we’ve learned working with creators over the past near-decade including how creators monetize their work, what barriers they face and what skills will help creators build thriving businesses.
Patreon, Inc. response to the Communications and Digital Committee’s Inquiry on A Creative Future
Patreon is grateful for the opportunity to submit evidence to the Communications and Digital Committee on the future of the UK’s creative industries. Patreon is a membership platform that empowers creators and artists to earn sustainable income and build a community with their biggest fans. The platform, which was started in 2013 by musician and video creator Jack Conte and his college roommate Sam Yam, has become a top income-generating solution for over 200,000 creators. To date, creators around the world have earned about £3 billion pounds ($3.5 billion US dollars) through Patreon’s subscription-style payment model, including over £50 million this year in the UK alone. In this evidentiary submission, we will focus on what we believe to be the best way to help creators monetize through membership with their fans and the skills creators need to do so.
At Patreon, we strongly believe in building strong connections between creators and their fans. Membership in particular is a clear driver of growth in the creator economy, particularly as these creators continue to be let down by ad-supported business models. We believe that creators do best, both financially and creatively, when they own the relationship with their fans. Patreon’s goal is to provide the tools that allow creators to connect with their biggest supporters and directly monetize their work, allowing them to build long term sustainable incomes.
Today, there are more ways than ever for creators to earn money. We have heard a great deal about advertising and affiliate marketing. But increasingly, platforms have emerged to support creators offering services or interactions, products, community engagement and subscriptions to exclusive content. The umbrella term for these pathways to monetization is “building a membership business.” Patreon is a place for creators to build memberships by providing exclusive access to their work and a deeper connection with their communities.
Creators on Patreon have chosen to monetize for different reasons and at different stages in their lifecycle as creative businesses. In May 2022, Patreon released a Creator Census to share our learnings about the diverse and dynamic community of creators who earn an income on Patreon. Relevant to this inquiry, we wanted to understand the mediums by which creators on Patreon produced content, finding that video is by far the most popular with 38% of respondents saying it was their primary medium, followed by writing at 17% and audio at 14%. Of course, how these users built their audiences varied by medium, with most video focused creators utilizing YouTube, while podcasters for instance, reported that platforms such as Facebook and Twitter were more useful. Despite these platforms being the drivers for audience building, what became apparent was that ad revenue generally made up only a very small portion of most creator’s income at only 7%. These same creators reported that Patreon made up 41% of their income, with another 7% being from subscriptions on services other than Patreon, meaning that membership was the driving force for building the majority of a creator’s income.
Patreon contends that membership will increase in importance and value to creators in the UK and around the world over the next 5 to 10 years. The technology and tools provided to creators will allow them to increase the amount and the depth of their engagement with their biggest fans, which will in turn provide more opportunities to monetize on their own terms. For instance, UK artist Bat for Lashes talks about how she “joined Patreon to connect more closely with fans” which allows her to provide a myriad creative content and benefits to her members and her “incentives are to have a more direct connection and be creatively fulfilled.” Another British musician, Beardyman, launched a Patreon to offer the opportunity to earn a producer credit, a one-off vinyl dubplate, and a share of the master rights on a new track. He notes that this project is “a new alternative to seeking record label funding.” As Gee Linford-Grayson, Patreon’s UK & Ireland Creator Partnerships Team Lead, said: “Beardyman is the epitome of what Patreon was built to do: give creators a platform to create on their own terms and bring their loyal fans closer to the process.”
This aligns closely with our submission to the British Parliament’s Digital, Culture, Media, and Sport Committee in November of 2020 in response to its inquiry on the economics of music streaming. We explained in detail why we believe that the current music streaming model fails to fairly compensate artists for the value they give the world. We also provided evidence to explain why artists need other revenue streams and business structures that give them more control over their careers, and ownership of their creative output. In addition, it is highlighted how user-centric models that promote membership for artists, like Patreon, are more equitable alternatives for compensating artists.
Patreon exists to serve creators to help them build business and community with their most loyal fans. When looking to partner with a creator, the number one thing we consider is if membership works for them and their desired outcomes. Aligning on the membership model helps ensure the creator’s success on our platform. So it’s crucial that creators understand what it takes to maintain that business model and develop their audience.
We applaud the UK government for considering development in this sector and urge you to recognize that being a creator is a full-time business, requiring not simply skills of creativity, but of entrepreneurship as well — like project management, finance, and marketing. For instance, as we think about skills such as marketing, in the previously mentioned Creator Census, we asked creators what they aspire to most over the next couple years, with 90% of creators replying that growing their audience was their priority. Patreon helps creators navigate this intricate tightrope, bolstering them with the tools they need to launch businesses and forge life-long careers out of creative pursuits.
Our Creator Census also notes that 80% of creators work alone, so the work involved is intensive and varied. Patreon truly believes that creators are some of the hardest working people, and that’s why we support government policies that provide creators with more benefits and certainty. For instance, British broadcaster and author Hannah Witton, who is also a creator on Patreon, talks about the challenges of claiming any sort of maternity allowance in the UK as a creator. She notes how it isn’t possible to claim any allowance if she plans to post any content during that time as it’s all categorized as work. So in reality, sharing any of her experiences as a new parent would exclude her from receiving maternity benefits, different from a standard worker who receives paid leave from their company. As the creator economy continues to grow, finding ways to make sure that independent creators are able to access benefits, whether it’s for parental leave or even something like mental health, will support the health of the creative industries as a whole.
Other governments have also taken steps to provide further income certainty for creators. France has a long standing unemployment program for those working in the arts to provide fixed income based on the amount of hours someone works in creative industries. In addition, Ireland has recently launched a pilot scheme called Basic Income for the Arts, that seeks to address the earnings instability that can be associated with the intermittent and sometimes project-based nature of work in creative industries. This program will provide guaranteed income for creators and attempts to place real value on the work that goes into developing creative projects. At Patreon, we’re working to move creators towards more sustainable incomes, but government support can help to open people up to more opportunities in this space without extreme anxiety about their ability to make ends meet.
Overall, we at Patreon are excited that the Committee is exploring how the creator economy can thrive in the UK over the medium to long term. We stand committed to advocating on behalf of creators to cultivate an environment where creativity is valued and creators are compensated accordingly. Most importantly, Patreon wants to see creators have more control over their creative output and provide them with the tools they need to pursue careers in this space on their own terms. We believe that guided by the right policy environment, creators in the United Kingdom could benefit immensely from expanded economic models and concepts that allow creators to build sustainable incomes. At the Committee’s request we are willing to provide additional background, information, and insights into this matter in the future.