nav
Business Operations Business Models

How Does Patreon Make Money (Business and Revenue Model)

The Patreon business model

How Does Patreon Make Money?
Here’s what you should know:
  • What is Patreon, and how does Patreon work?
  • How does Patreon make money?
  • Percentage of Creators Monthly Revenue (Platform Fees)
  • Currency Conversion Fees
  • Payout Fees
  • What is the Patreon business and revenue model?
  • Patreon’s funding and valuation
  • Patreon’s profit and revenue

How does Patreon make money? Here is a full, in depth, breakdown of their three (3) revenue streams and the different products and services they offer, as well as the Patreon business model, their year over year revenue, and how Patreon works.

What is Patreon, and how does Patreon work?

Patreon is a platform that provides an infrastructure for creators to have their own subscription service with their fans, or “patrons” as Patreon calls them.

Founded in 2013 by Sam Yam and Jack Conte, Patreon now has more than 200,000 creators on its platform with a valuation of $4 billion.

The founders say they started Patreon with one idea in mind — “to get creators paid,” and they are delivering on that promise thus far by paying out over $2 billion, since 2013, to creators.

How Patreon works is: Creators start a Patreon page, upload content, get fans to subscribe monthly to the content they offer, and then Patreon pays the creators and takes a percentage for themselves.

Some of Patreon’s competitors include GoFundMe, Kickstarter, FundRazr, Wefunder, Indiegogo, and other crowdfunding platforms.

Patreon App in Apple App Store | Patreon Business Model | How Does Patreon Make Money?
Source: Apple App Store | Patreon

How does Patreon make money?

According to Patreon, they have more than 200,000 creators on the platform with over 6 million subscribers paying monthly to access creator content.

So how does Patreon make money off of all creators and subscribers on the platform?

Below is a breakdown of how much money Patreon makes and its revenue model. Including their main revenue streams and how much they charge for their services.

Here are the 3 ways of how Patreon makes money (in 2022):

Patreon has a revenue model that makes money in three (3) ways – platform fees, currency conversion fees, and payout fees.

#1. Percentage of Creators Monthly Revenue (Platform Fees)

Patreon makes money by taking a percentage fee of each creator’s monthly revenue earned through Patreon.

Creators can choose from the three subscription tiers: Lite, Pro, or Premium. The tier they choose will determine how much Patreon will take each month from their earnings.

Patreon Percentage Fees:

  • Lite: 5% of the monthly income
  • Pro: 8% of the monthly income
  • Premium: 12% of the monthly income
Patreon Cost | Patreon Business Model | How Does Patreon Make Money?
Source: Patreon

Note: To date, there are more than 200,000 creators on the platform with over 6 million fans paying monthly to access the creator’s content.

#2. Currency Conversion Fees

Whenever a subscriber pays in a different currency than the creator is paid via Patreon – Patreon charges a 2.5% fee to convert the currency to the creator’s preferred currency.

Patreon supports eight (8) different currencies on the platform: USD, EUR, GBP, CAD, AUD, SEK, NOK, and DKK. Creators cannot have multiple currencies in their account balance.

Patreon Conversion Fees:

  • 2.5% conversion fee

Note: The average currency conversion fee across credit cards is around 1% – about 1.5% less than Patreons conversion fee.

#3. Payout Fees

Whenever a creator transfers funds from their creator account to their bank, PayPal, or Payoneer account – they will incur a small payout fee each time.

Fees differ depending on the creator’s currency and withdrawal method. But the most common is direct deposit to a bank account in USD. These fees are $0.25 USD per payout.

What is the Patreon business and revenue model?

Patreon makes money through a few revenue models that they combine within their company, they are:

  • Commission based business model
  • Subscription business model
  • Mergers & acquisitions (M&A) business model

Patreon’s funding and valuation

According to Patreon’s Crunchbase profile, Patreon raised $413.3 million over 8 rounds and has a valuation of $4 billion according to the Wall Street Journal.

Patreon’s profit and revenue

Although Patreon does not release their annual revenue publically, their estimated revenue was estimated to be around $80 million in 2020 according to backlinkothis has not been confirmed by Patreon.