Hopefully you've noticed that I've really been pushing the production value of what I make over the last few videos. I'm really proud of the video we're putting out, but doing so is fairly costly. If you'd like to support me and my team to make more videos like this then you can do so in a couple of ways: Firstly, you can sign-up to my premium streaming service Nebula (with 40% off an annual plan) at go.nebula.tv/tomnicholas Secondly, you can support the channel whilst getting access to video scripts, early bits and weekly updates on what I've been working on at patreon.com/tomnicholas Thanks so much and I hope you enjoyed the video!

It’s insane that people can mess up what is essentially a money printer.

Me : wait, what happened to Patreon Tom : So, venture capitalists [...] Me : oh no

I don’t understand why Patreon ever had to raise so much money and have so many staff. The company was simply an avenue for us to support creators, we never wanted it to be a replacement for any kind of social media.

I relied on Patreon for income in the early days. Jack Conte used to have monthly live streams to catch everyone up on what Patreon was doing and take questions from creators. I attended all of these because they were fun and candid and a rare event where the CEO was talking to us the creators, not investors. I'm now on Kofi. I'm not mad, just disappointed in the direction Patreon has gone. I will miss you, Patreon, it was great while it lasted.

Saddest thing is that Patreon could've easily been sustainable using the "generous" business model, if they hadn't needed to make billions for investors

It's amazing how investors can ruin anything with this mindset of "everything I invest on must keep growing infinitely", as if a steady, sustainable income was a bad thing.

I’ve used Patreon for a while, and was excited in 2020 when a recruiter for the company reached out to me for a software engineer position. I mentioned how I always appreciated Patreons focus on core competencies, linking to discord and other platforms to manage community and output. He then started talking about Patreon’s plans for future. He mentioned adding chat features and trying to do embedded video, and all I could think was “why bother? Who wants this?” Suffice to say, it sounded silly to me, and in that one phone call I became much less excited about the platform. Nice to see an actual explanation of what they were thinking (and get vindication for my thoughts)

"Oh no, our company isn't as capable of infinite growth as we thought, better start haphazardly cutting costs in a way that hurts our ability to generate revenue and scrambling for new monetization schemes that chase away loyalists, that'll definitely help." Tale as old as capitalism.

I used to think the Goose Who Laid The Golden Egg was such a dumb story as a kid. If you had a magical goose that laid golden eggs every day, I thought literally noone on earth would be so stupid, short sighted and crazed by greed that they would cut the goose open to try to get all the gold at once. I don't think that any more.

I love when my only source of income keeps sabotaging itself for no discernible reason

I remember watching a video a while back in which Jack Conte himself said Patreon would NEVER ask more than 5% from creators. Ever. I'm not surprised at this turn of events but I am disappointed.

It’s ironic how Pateron’s mission was to free creators from corporate gatekeepers, but to build the platform they allied with the most predatory corporations that exist.

If only Jack had believed in his own product. If he really needed all this money to make Patreon as good as it could be, he should’ve just set up a Patreon for it. I bet people would’ve chipped in.

Fellow founder creator here. Honestly all of the new features on patron are ok but can be done elsewhere (Often better). The site for me exists to funnel people onto discord a process that I can already do much easier with UKposts members. The interaction rate with posts is abysmal on patron in comparison to UKposts member/discord posts. I just can't see them doing anything else than doubling down and trying to squeeze more profit with useless bloat features.

I can't believe I've gone from watching pomplamoose videos on early youtube and buying Jack Conte's albums in middle school trying to finesse them onto my MP3 player to watching a video about the ubiquitous platform he created... in my office as an adult in my late twenties. It's just wild

Man, that's crazy. All Patreon served was to facilitate the exchange of money from a viewer to content creator if the viewer wishes to support them (after Patreon takes a small cut). There was no reason to accept investments from venture capitalists outside of sheer greed.

I don't understand why a company where each customer pays for themselves is raising all this funding in the first place. You could literally do nothing and be solvent.

It’s a problem with the obsession with infinite growth. The scare started when the slope started to level off, they weren’t loosing money they were just not getting exponentially more money. For some reason investors can’t seem to understand that there’s only a finite number of people, it’s a natural curve for a service like this to acquire a large number of people in the beginning and then slowly level off as you’ve already acquired the majority of your audience and supporters

Big tech destroyed the old internet. I remember how pleasant and exciting it was to be online in 2010, like there was a world of possibilities... I had a Deviantart with 3k followers and I already was monetising my UKposts page for around 80$ a month while still in college. Nowadays it's so much harder to do that even if you're a full-time creator! The amount of commitment for social media is atrocious, new creators have a super hard time and all websites say is "omg we're starving so much lmao! now pay" all for corporate greed because they're making more money than ever 😡

The company literally printed money off the backs of creators. They barely had to advertise because the creators themselves would plug Patreon in all their videos. Insane that they essentially fucked the company up by chasing after that VC money. I guess all the higher-ups probably don't care because they lined their pockets on the way out.

It's mind boggling to me that Patreon can say "since less than 1/20 creators are growing with goals, we're discontinuing goals." as if they don't understand that it's orders of magnitude easier to [ ask ] for money than it is to [ actually receive ] money. Rather, it's infuriating that people in high positions at businesses with access to and the ability to act on the analysis of business related statistics have consistently shown an complete ineptitude on the front of properly parsing what the numbers actually mean. I feel like we're forever doomed to be controlled by out-of-touch suits that think that because they see funny charts they have a god's-eye-view of their entire business while having no clue what's actually going on, ruining everything along the way.

I seriously don't understand what they were raising all that venture capital for in the first place. All they had to do was maintain their functionality and sit back and collect their processing fees while the site grew organically from all the word of mouth from its creators asking people to subscribe.

The ultimate lesson is that if a firm has investors it will eventually be broken like a piggy bank to give those investors money.

Patreon's entire job was to be a middleman between creators and patrons. All they needed to do is meditate when someone acts in bad faith. That's it, otherwise they needed to sit back and they would have money. Because they kept pushing for a bigger cut each time, the discontent opened a market for competition and people left for better deals. They over reached and thus compromised what would otherwise be a very simple, constant source of money.

Founder creator here. It's no exaggeration that my channel would not exist without Patreon and the patrons who supported me there. For the first year or so of my channel's existence, I had 7 patrons giving me a total of $50 a month. Enough to buy equipment and editing software. It still is a huge part of my revenue, and the site's enshittification scares the shit out of me. A lot of creators will go out of business if they collapse.

Patreon is such a bizarre business to fuck up on. All it has to do is maintain a functional platform and they will make money hand over fist by being a middleman. It's literally free money!

I used to have a Patreon to support various creators with about $45/mo in monthly subscriptions. Had an account for years, never posted or logged in (save for maintenance). About 6 months ago my account was deleted without warning and all I got was the email stating it was deleted and my premium podcasts stopped working. After time with CS I was eventually told that they won't tell me why my account was deleted, they won't reinstate it because the data is gone, but they would like me to make my account again using the same email and set everything up again. I was so irritated I will never again let Patreon take a free from my creator support. Unfortunately most of those who I support ONLY have Patreon, so they will no longer receive support from me. I look forward to when they collapse and force creators to look elsewhere like Subscribe Star.

I've been a creator on Patreon for 3 years, and I've had a personal meeting with one of their research teams. I was extremely vocal with my ideas and critiques for the website on the creator forums, which were deleted and completely shut down last year. It eliminated one of the few ways to express ourselves to Patreon itself. I've sent several emails about real issues on the creator's end, issues that have made my Patreon sometimes unbearable to manage (I actually use Patreon to send physical items). I have a fair amount of Patrons, but Patreon takes a huge cut while not offering a lot. If you're not a creator or don't need to keep track of Patrons and addresses, you might not be aware how dysfunctional it is. Not to mention how slow the website and app are...

Imagine a bizarre situation where, rather than venture capitalists, Patreon's founding was *funded via Kickstarter*

I support 2 creators on Patreon. I rarely ever login, only if there is a payment issue or something. Patreon tried too hard and lost focus of its mission. If those 2 creators go elsewhere, so will I. Patreon need to learn that nobody goes to Patreon for Patreon.

I think Nebula is rad, and it also misses the lesson you learned by examining Patreon’s business. The thing creatives need is a banking service that harnesses the patron cultural movement, not another paid video service.

As a creator spawned during the pandemic, there's such a palpable sense of secondhand anxiety/dread in that part where Jack and co misdiagnosed the obvious (I would say obvious even in its moment, without hindsight) bubble of the attention economy and free time and all that as some kind of new dawning. This video is great for how it articulates the why that I've always had in my head every time I get an email about Patreon doing something weird. I mean, I knew it was probably VC, but this is a great answer to "wait shouldn't Patreon just be raking it in? how are they having all these weird struggles?"

Patreon is the perfect example of a business that should have gotten traditional loans instead of pursuing VC money.

It sucks because Patreon IS a really great way to directly support creators you love (or at least, it used to be). I love the idea of fans collectively pitching a few bucks to their favorite creators every month as a way to supplement the less reliable streams of income internet creators have to rely on. Of course capitalism had to ruin everything with the whole "infinite growth" mantra.

I truly believe "enshittifaction" is going to be the word of the era that defines this era of ephemeral service capital. This is my first video of yours, and I love what I'm seeing!

I wish we lived in a world where basic payment processing like Patreon (and to some extent Uber, Lyft etc.) could be run as a non-profit coop - without someone immediately running off with the money...

It's absolutely buckwild to me that nobody (not just patreon but investors and businesses in all sorts of sectors) stopped to ask themselves if the circumstances during a pandemic might not be indicative of future trends? Like I work for a trucking company that decided 2022 was the perfect time to move to a 10% year over year growth model. It....I mean it seems like we're fine...for now. My friends in the office only seem slightly more frazzled than usual. The increase in an already pathetic turnover rate isn't worrisome at all!

You can see the enshittification of the internet on Tumblr too. In trying to be more profitable, they're dropping what made the site so great and useful--the blogging and tagging aspect--to try to chase after Twitter's UI and blurring its unique identity. It sucks. I wish Patreon the best

Something to note is that Google and Apple actively bar competition in their app stores against Patreon; see the fanhouse issue where Apple insisted on enforcing their 30% fee on Fanhouse, but not on Patreon.

Patreon's only use for me as a subscriber was that I could have all my pledges go out at the same time as a single payment. Once that was lost, there was no reason to keep using it. Sites like this need to remember that their customers aren't just the creators, but also the patrons. As a creator, the fact they list a possible option for rewards to patrons being high quality versions of images but downgrade the quality of images uploaded in the app... pretty much sums up the experience for me.

The 2017 backlash of a flat fee cost is so stupidly funny in this moment with how unity just killed itself by anouncing a similar fee

You completely missed the 2018 purge of creators, which led to many people, both creators and fans, abandoning the platform. Conti has been his own worst enemy for years!!

Let's be honest, here. Greed and ambition caused the CEO of Patreon to run out and get VC money in the first Place. Patreon's business model would have been able grow naturally just fine. Might have taken a but longer, but it could have gotten there.

I have a Patreon account and must admit I don’t know any of this - or even any of these “extra” features - great video!

"Subbable was a walled garden, inaccessible to the general public and therefor had no chance against the broader, more open alternatives... Anyway, this video is brought to you by Nebula!"

It feels like every time these different sites go "family friendly" with their content, they shut down shortly afterward. They want to impress their creditors, but in the end they end up not making anyone happy.

This is very specific but I love how you added Shaun saying "Patreon" at 4:09 because that's the first thing I imagine when the platform comes to my mind. The odd and charming way he pronounces it.

Patreon succeded in doing what most start-ups bank their entire business case and hope of future profitability on. They managed to create a new market and gain a full monopoly. Things that many startups like Netflix, and Uber tried and failed to do and are now struggling because they will never get the dominant market share that their investors hoped for. Patreon got that almost monopoly market share but they had raised so much from investors who now expected a Facebook or Amazon level of return for something that's always going to be a niche market. People who are willing to pay voluntarily in a world of infinite free content.

If i had a nickel for every bald and bearded tech CEO named Jack who is disorganized and exploitative and somehow manage to fumble an essentially ubiquitous platform, id have two nickels. Which isnt a lot but its weird it happened twice!

Alternative video title: "This is why we can't have nice things" As someone who's been donating to webcomics, ect, via PayPal before Patreon was even a thing, this bothers me so much. While you do point out how Patreon's % take increase is backward from economies of scale, I think you let your/everyone's desensitization to the insanity of capitalistic thinking mute your critique, when it really should have been hammered louder. The idea that Patreon willing took 105 Million in VC loans, when it had only 25 Million in annual revenue is fu*king insane! You would have to be actually dislodged from reality to think the platform could ever grow fast enough, long enough, to pay just that much back. More importantly, WHAT THE F*** ARE THEY SPENDING THE VC MONEY ON!? Patreon was as pure of a really great concept of a trusted middleman service provider as can be conceived. It needed a small dev team to keep the website always up to date, and it needed to scale its backend and customer service to keep up with any increased demand. *Patreon is the PERFECT service for a lightweight, high cash flow business.* It did not need to "evolve" to add entirely new products/services! It's just that capitalist, cancerous, growth at all costs mindset. Could not be satisfied even with a fu*king 25 mil cashflow in 2019! For a 0 physical, purely online, website! *Instead of making a new company for a new service, like Patreon itself once did, it now must grow, and grow. Patreon either must take over the online world, and soon, or it will rot, wither, and die.* Really sucks that Subbable was bought, meaning it can't be scaled up as an alternative. My most realistic hope is that Nebula (as a creator owned platform) can launch a Patreon-equivalent sub feature. Because guess what Patreon? The implementation of your idea is absurdly easy, it was just the first mover, *brand trust,* and inertia that kept people attached to the platform. . Migrating response-reply over here: "(and worth saying that it's an investment rather than a loan, which might seem pedantic!)." Not pedantic at all! I purposefully said "VC loan", as I think 99% of people would get a better idea of the reality w/ that word. The idea behind a VC "investment" is the same as any conventional loan. It is indirect, done via the increased "worth" of the invested company, but the whole point for the capitalist is the exact same. Investment of capital is always the same. They invest X dollars, and expect a certain % increase on that investment, however long of a game, or at whatever odds they are willing to play. If they think that % increase will be higher somewhere else, be it a diversified stock portfolio, bonds, ect, *the capitalist has no reason NOT to move their capital over there and get MORE money*. That's the rub. Any VC investment is temporary, and the "~loan" comes due when they cash out of the company. Sure, the company's value can drop, but that's the same risk carried in a traditional loan. . Still, the idea that Patreon thought they needed EVEN MORE VC money after that 105 mil in 2019 is beyond infuriating. As we are reminded every time there's a crash, that VC money IS NOT THE PERSONAL WEALTH OF BILLIONAIRES. It can, and does, come from all sorts of places. Financial institutions play the lottery with other people's money, and we ALL pay the price when these tech companies promise the moon and never even break the stratosphere.

I was a huge fan of Jack Conte and his music back in the day, so I still remember clearly when the "Pedals" video dropped. I remember hearing his pitch for Patreon and thinking "that's a cool idea" but NEVER for a second guessing it would be as big as it is. The greatest irony was that Conte, if I remember correctly, said that he wouldn't take a salary as CEO and would instead rely on his Patrons so he could continue making music. So much for that, eh?

The problem is that every site and service wants to form a monopoly. Get everyone on and rely on friction to keep them there as you rent seek. Start enforcing anti anti competitive regulations and the behavior will change.

And this is a great example of the difference between entrepreneurship and late stage capitalism. Instead of having a good idea , working hard for a good income venture capitalism is a system that sucks every cent out of everything and everyone until creativity dies.

There is a game that patreon played several years ago called "Getting rid of adult content" in 2017 and it's degrading since then. It does not help that their creditors are perhaps the most regressive portions of the financial industry you could imagine. Their financial advisors & investors have all been.... kinda horrid.

tfw you hear a video essayist start pitching nebula but you've been subbed to it for ages - and you realize you've been watching on youtube by accident. long live nebula.

Wasn't it Patreon that deplatformed users deemed "problematic" and kept all the money donated to them instead of refund it?

It's impressive how even during pandemic times they were still asking for investor money to do what is a glorified forum with payment processor integration.

The whole 'venture capitalists want 10 times the return' explains _so_ much about so called successful businesses going under, or turning to exploitative practices.

I can't help but wonder if Enshitification comes hand in hand with a company going public. Public companies change their point of interest from making a good product to making money from shareholders.

In positive news, we'll probably get a new CEO video from Collegehumor

they had the golden goose, it was a company that prints money without doing anything. how could they mess this up

I think an explanation of Nebula’s business model with the same skepticism would be interesting. It doesn’t appear to be very aspirational.

“Nebula” is such a counterproductive name for a creator hub. Interesting to see how a company with a good idea loose track of the importance of “customer perception “.

I've always thought it was ridiculous how slow the patreon is on both mobile and desktop (especially desktop), and equally ridiculous is the inability to explore or index exactly who is actually on patreon and explore your related interests

It really is one of the worst things about capitalism that once a company has investors the profit motive is no longer about making money but about making all the money all the time. The wants and needs of the customers and staff become secondary to the wants of the investors.

Having Nebula as the sponsor of this video makes it feel like a hit piece of a video as opposed to a well thought out and balanced observation of Patreon

This is particularly well-timed given the horrible new UI they just pushed through. It's so bad that it has all but destroyed the value Patreon had for me as someone who supported a large number of creators, and I can't imagine they talked to anyone that actually used the site before pushing it out. Plus the terrible new logo doesn't inspire confidence that they have any idea what they're doing.

I’ve noticed a big increase in creators mentioning ko-fi along side patreon in their calls to action recently. I don’t really remember it being a thing at all at the start of this year. Let’s hope it or something similar can grow to at least compete or take over if patreon does continue down the enshitification pipeline

How the hell could a company with seemingly such small costs associated with it be in financial crisis, they're just middlemen. What I don't get is just how AWFUL patreon pages are to navigate! Good god, they could not make browsing them less user friendly if they tried

It's really cool how you're able to explore a topic in such depths and still keep it easy to understand! Keep up the good work!

And, today, just three days after this video was posted, I got an email message from Patreon with the subject “Introducing the New Patreon” and thought, “Jeez, it really _is_ circling the drain.”

This is what happens when Corporations care more about making their shareholders happy, rather than their customers.

If you look at the mockups of merch, any Printful user will tell you that Patreon is just abstracting Printful's service and probably marking up, as a middleman, to a service that is essentially another middleman. And, as a fellow "grandfathered" 5% user, I feel like Patreon is constantly trying to trick me into switching into a different tier using aggressive/confusing language.

Patreon is the perfect example that shows capitalism doesn’t mean the best ideas survive. It just destroys everything. “Success” just means it’s destroying you slower than everything else

I've been a patron almost from the very start and used to be subscribed to like 5-6 creators at a time with small 1-2$ donations. Then they started cranking up the fees and all those creators made minimum pledges of 5-8$ so I could support only one at best. Now I just shuffle through a few of my fav creators on a monthly basis subscribing every couple of months and binging the content they made during the time I was following someone else. It must be frustrating to the creator to see such a turnover but there is no way to afford it otherwise. I used to be a Pomplamoose fan back in a day and Conte always struck me as a cool creative guy but successful businessman he is not. The platform is already sold to those VC. For now the only thing that really holds it above water is that it's the only platform ok with Adult content. And with poor platform management that is always one bad scandal away from payment systems getting nervous and banning it altogether. Then it will implode Tumblr style.

if only Hank Green didn't sell Subbable to Patreon 9 years ago...

Let's not forget Patreon pulled a Tumblr and lost lots of creators to OnlyFans for scaling down support for adult entertainment (with OF losing a lot to other subscription services when they stopped supporting extreme content and threatened to stop supporting more).

I love your videos, Tom. Eager for more!

It's about time someone (with more subs than me) said it. Patreon has always been lying about their fees too, like really badly. Even when people talk about the hidden fees, they don't seem to actually catch how many there really are. I pay over 30% most months. Going through their maths is like going through a Norwegian tax statement. "2% process processing fee / 4.5% Trans-Pacific Fee + 6% AUD fee". They are just making s*** up.

Thanks for reading out headlines. As a listener (who only occasionally actually watches), it's much appreciated.

Mission or not, this echoes the previous video about the gig economy so hard that I really got flashbacks. The lesson we learn once again is to never go to the venture capital. I always admired Gabe Newell for keeping Valve private to the bone; he really gets to do whatever he wants with the economy he created whether these are shitty ideas or genius ones (the latter being rather more common).

An excellent and informative rundown - much thanks ❤

This video was so impressive. Granted, my ADD requires me to listen to it on a faster speed, but it's still a gripping listen and I'm absolutely wowed by your ability to reference the VC problem so well and to explain it without any issues for non-finance/economics-fluent viewers.

The most depressing thing about the ongoing enshittification of platforms is how it's revealed the incuriosity and inertia of the majority of any given platform's users. They'll eat shit sandwiches for months rather than rouse themselves to find any other way to do what they're doing. Great vid, thank you very much.

"Investments should make a 10x return or they're not worth it" - It's industry standards like this and the demand for exponential profit growth year after year that are causing products to get worse and prices to get higher every year. Where does this all end aside from the rich owning the air and the poor paying to breathe?

I've heard of nebula before but putting it as a competitor to patreon and less as just another streaming service changes my perspective a lot.

Great job sir! I learned a lot. Informative!

TL:DR: venture capitalists are evil + never sellout your company

it's honestly a shame that the nonprofit alternatives to patreon (liberapay and opencollective) never took off as much as patreon did

Thanks for bring this to our attention Tom.

Man your delivery is so good. Idk how many takes it, well, takes to get footage up to your standards but this shit is *CRISP*

One thing that might be worth mentioning with Patreon's decline is the exodus of NSFW/Adult content creators. Back when Patreon was in its early years, adult content was encouraged with little moderation and very loose guidelines. The larger it grew - and the more 'mainstream' it became - the more those NSFW creators got (or felt) sidelined. I think it was some time around 2018/2019 that a bunch of NSFW Patreons were suspended for having adult content in 'public' posts. And, even recently, pressure from payment processors has forced Patreon to start enforcing a photo-ID verification requirement for NSFW creators. When alternatives like OnlyFans, Fansly, etc exist, it's easy to see why some would decide to switch platforms when they're uncertain about their longevity on Patreon. While NSFW creators were never the bulk of Patreon's income, it's undeniable how lucrative they could've been for the platform if that trust hadn't been spoiled (just look at success of OnlyFans). As a side note; I wouldn't be surprised if Patreon introduced a 'pay to unlock post' feature at some point - similar to the system those other sites have.

Have they considered that the reason why (almost) no one interacts with content posted directly to Patreon is because the website and app are both excruciatingly slow?! I only ever go to Patreon if there is no other way to access something and even then, I try to leave the site as soon as I can and it still takes me ages. (It's not my internet connection, other sites are fast.)

This makes so much sense and finally sets the changes I saw over the past years into context. I am glad I dont have rely on patreon, but I am sad to see the direction it is going.

i love how this can be read as a 39min ad for Nebula XD

The Machine of Capital consumes everything, unfortunately. We can't just have nice things in this system, when everything is controlled by a handful of oligarchs, "venture capitalists"...

Why they would even consider hosting videos while struggling to find income streams is baffling. The sheer cost of running a video hosting site is insane on it's own without even a thought to how to set it up in the first place. Did they think they could somehow beat UKposts without them noticing? UKposts pays more running their service than Patreon is valued in its entirety. If they aren't going to do massively better, it won't even be a blip and would be enough to take them out.

Many creators on the "gun-o-sphere" (for example Forgotten Weapons) have exited Patreon or at least have alternatives going for fear of being deplatformed - this HAS happened in the past. Same with UKposts.

Love your videos great work. The ad at the end made me ask myself why I'm not watching it over there on nebula. I do hope something like patreon continue. Honestly it'd be good if there was a real competitor. I hope one day I'll have enough followers to be on a platform like that . The nebula class was great as well I need to re watch it .