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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.

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.

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.

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

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 2021):

Patreon has a revenue model that makes money in three (3) ways.

#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.