(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.