Facebook Inc. (FB) is moving into territory of Patreon, a San Francisco, California-based crowdfunding platform that encourages fans to give financial support to artists for their work. After a year of testing, the social network has now reached out to its users about a similar tool, offering page owners the chance to start supplying content to their subscribers in exchange for a monthly fee, according to TechCrunch.
What Is Patreon?
For years, artists and creators have been using the internet to share their work and build exposure, without any means of generating revenue. YouTube musician Jack Conte and his college roommate Sam Yam hoped to change that in 2013 by creating Patreon.
Artists that sign up for the service are offered the opportunity to earn recurring revenues from their followers. On its website, Patreon explained that fans are given the chance to donate money to their favorite artists each month in exchange for “additional access, exclusivity, and engaging experiences.”
The plan was to give people the opportunity to make a living out of being an artist. So far, it has gone down a storm: Patreon claims to have over 3 million monthly supporters that have paid over 100,000 artists, comedians, models and makers more than $350 million.
Facebook Clone
Patreon’s rising success hasn’t gone unnoticed. Facebook has spent the last year investing in a similar tool for creators to generate revenue directly from their fans.
Fan Subscriptions has so far only been made available to just 10 content creators across the U.S. and U.K. Then on Monday night Facebook went into expansion mode, sending out emails inviting other content creators to test out the tool.
The social network offered creators the chance to get a $4.99 monthly subscription from their fans, in exchange for exclusive content, live videos and a profile badge for paying customers. For now, the plan is to let page owners keep that subscription fee, although that is expected to change once the feature is officially launched.
Cashing In
TechCrunch, citing a policy document, claimed that Facebook has big plans to cash in on artists making money from their work. The social network reportedly aims to take up to a 30% cut of subscription revenues minus fees, compared to 5% by Patreon. Alphabet Inc.’s (GOOGL) YouTube takes 30% including fees, while Amazon.com Inc.’s (AMZN) streaming service Twitch.tv. charges 50%.
Facebook is hopeful that its huge platform and offering of global exposure will tempt Patreon members to jump ship, regardless of the costs. Other than taking a 30% cut, the social network reserves the right to offer free trials and discounts to fans whenever it wants at the creator’s expense. The tech giant also plans to own all the rights of creators that sign up for its Fan Subscriptions service.
