Check out my analysis of the podcast market and predictions for 2020 on TechCrunch >>
Listen to me discuss my research on Patreon and assessment of the company with Connie Loizos of StrictlyVC on the TechCrunch Equity podcast.
Read my post on TechCrunch: https://techcrunch.com/2019/03/06/podcasts-smart-speakers-soar-as-social-media-stalls-based-on-new-survey/
(This was originally published as a section within today’s Monetizing Media newsletter. Sign up here.)
Patreon: the definitive report
I wrote a 20,000+ word analysis of Patreon and monetization strategies by independent content creators. Patreon is a platform that creators use to run membership businesses (monthly payment in exchange for special access) with their superfans. Think CRM + CMS + payment processing.
The report dives into the company’s founding story, product development, business model & financials, core thesis, competition, and potential exit scenarios. I also added a syllabus for further reading.
Some quick takeaways:
- Patreon has undergone a strategy shift from being a marketplace / social platform to a SaaS company making business tools for creators. The goal seems to be to provide all tools & services a creator needs, including small business loans.
- Patreon’s rake is too low, but they’re about to roll out new premium features. I suggest pricing tiers as a path forward, which is the norm for B2B SaaS.
- The product needs to put creators’ brands first and Patreon’s second.
- 70% of revenue comes from creators who make $1k+ per month. That’ll be $35M+ this year.
- The key question is how big this market size is. The % of creators who make even $1k per month is tiny…but is that 10s of thousands or 100s of thousands of them?
- Last valued at $450M in 2017, I expect Patreon to close a Series D in the next few months that makes it a “unicorn”.
- An IPO in a few years is possible, but I think it will get acquired first. Facebook and YouTube are obvious candidates. I make the argument that Endeavor should buy them though.
Read my post on TechCrunch: https://techcrunch.com/2018/10/25/whats-next-for-podcasting-subscriptions-and-exclusives/
According to an IAB/PwC report, the market size for podcast advertising in the US was $314M in 2017, an incredible 86% yoy increase from $169M in 2016. It predicts the market will reach $659M in 2020.
One stat of note: 38% of podcast ad spend in 2017 was via annual upfront buys (compared to 27% in 2016).