As YouTube Stars Invent Their Own Ways to Get Paid, Patreon Raises $2.1M

“There was this weird hundred-year period where content was distributable but not digitized, from the 1900s, when the phonograph was invented and sound recording was first released. It was the age of physical media with artificial scarcity. But now that recorded media as a product is basically worthless, the idea of paywalls and charging for content is just starting to seem outdated and old fashioned.”

That’s the history of the media industry according to Jack Conte, a musician and video creator, and now co-founder of a new crowdfunding startup.

“So, how did artists make a living before the 1700s and 1800s?” Conte asked rhetorically. “Basically, all great art — Michaelangelo’s David, Da Vinci’s Mona Lisa — has been because of patronage.”

And having labeled the age of advertising as a hundred-year blip, Conte is ready to bring patronage back. Goodbye ads, hello automatic tip jars.

Conte himself now makes precisely $6,153 for every video he posts to YouTube, with 835 loyal fans pledging between $1 and $100 per item. That’s about a hundred times more than what he had expect to make from the same video with YouTube advertising, he said. (Here’s his latest from this week, a dance-y tune made with a music controller set on top of a sideways television displaying custom animations, captured with a camera phone on a robotic crane.)

“I don’t think ads really properly value content, because they don’t take into account whether a user cares about that content,” Conte said. “It’s a binary rubric; they’re either watching or not.”

Since launching in May, Conte’s Patreon has attracted 2,300 creators, starting with him and his friends, like his Pomplamoose bandmate Nataly Dawn and ukulele player Julia Nunes.

Many Patreon creators come from YouTube, where they collectively have more than eight million subscribers with more than 1.25 billion video views. But there’s also a pod of indie gamers who make paper games and physical games, and a graphic novelist releasing his latest work page by page. Together, they are making more than $100,000 per month, with Patreon taking a five percent cut.

On the back of that early positive momentum, Patreon has now raised $2.1 million from tech investors SV Angel, Charles River Ventures, Freestyle Capital, Alexis Ohanian, Garry Tan, Atlas Ventures, Rothenberg Ventures and Tyler Willis.

Patreon also has a new competitor, Subbable. Launched last week, it’s another recurring fan support platform for YouTube stars, also built by YouTube stars.

Subbable is the latest project from the prolific Hank and John Green, known as the VlogBrothers, who have developed all sorts of popular video shows and also the YouTube convention, VidCon (which is happening this week in Anaheim).

The big difference between Subbable and Patreon is that Subbable fans commit to pay on a monthly basis, rather than on a per-item basis, which is a better fit for content like the Green brothers’ show Crash Course, a series of animated educational video lessons that YouTube had previously funded through its grant program.

In less than two weeks, fans have committed nearly $20,000 per month for Crash Course.

Hank Green tells a story very similar to Jack Conte’s. “Subbable solves a problem that’s much bigger than YouTube, it’s Internet-wide … even society-wide,” he wrote in an email.

“Advertising values all views the same way. Whether you were momentarily distracted or just had your life changed for the better, that’s still just one impression to an advertiser. We want a system that rewards creators for making content people love.”

Green said that after VidCon he hopes to add more projects to Subbable, which itself is self-funded. “We’re starting off, of course, with nerdy YouTube channels, because that’s the world we know. But I think anyone who has an engaged audience and creates content that people love will fit right in on Subbable, whether they’re YouTubers or podcasters or musicians or artists or whatever.”

Conte and Green say they’ve talked to each other, and agree that their approaches overlap, but they may also complement each other.

Okay, but what about the crowdfunding giants, Kickstarter and Indiegogo? Why do we need yet more crowdfunding platforms? Currently, the big two are set up for one-time projects — like independent movies — where creators raise money once. Will they introduce recurring support?

“I’d never say never, but it’s not something we’re considering,” said Kickstarter spokesman Justin Kazmark. “Currently, Indiegogo does not offer any type of subscription model,” said spokeswoman Rose Levy. But she didn’t rule out a future product, “if the desire was there.”