PSA: the $1 support tier will be going away later this year - but ONLY for new Patrons!

Hello all.

This is a brief post and PSA to explain a bit about the economics of Patreon and why at some point in the not too distant future, I will have to increase the price of the $1 support tier up to $3 instead. I will explain the reasoning for that further down in the post, but first, the most important things to say ARE:

1. NOBODY WHO CURRENTLY SUPPORTS ME WILL BE FORCED TO PAY ANY MORE THAN THEY CURRENTLY DO

2. I AM NOT ASKING ANYONE TO INCREASE THEIR PLEDGES OR PAY ME MORE MONEY

If you are currently signed up at $1, you will stay signed up at $1, whether monthly or annually, until you cancel or edit your subscription yourself. If you want to subscribe at $1 a month you can subscribe now and stay at that level for as long as you want. Later in the year, the price will increase to $3 a month, and the $1 will become unavailable to new patrons, but everyone who was already signed up at that level will stay unaffected.

If you want to stay subscribed at the $1 tier, I would also like to encourage you to consider switching to the annual billing plan instead of the monthly one, but only if you have the option to do so. I know money is tight and it's getting tighter, so please do not feel obligated or pressured to give me any money that you can't comfortably afford to part with.

I am not happy about any of this, and I would much rather not need to do it, but I'll explain below in a bit more detail why I'm going to do it all the same.

The economics of it all

I created this Patreon in, oh god, 2014 with the $1 support tier, in part because I wanted to charge people as little money as possible to support me, and in part because one dollar was just worth a lot more money back then. But now it's been a decade of inflation, with a recent rampant inflation and cost of living crisis, and the value of a dollar just... isn't what it used to be. On top of that, with the world economy going topsy-turvy from trade wars, the value of the US dollar is becoming rather badly unstable as well.

And then on top of THAT, there is the additional and much bigger problem of transaction fees. Basically, when you pledge to me on Patreon, whatever payment method you use takes a cut of the money you pledge before the payment goes through, usually around 2%, plus a flat fee of around $0.30.

What that means is that the flat processing fee of $0.30 takes a full 30% out of the value of that single dollar, and that 30% cut stacks with every individual transaction. So if 100 people pledge $1, every single one of those transactions gets cut by about 30%, and I get approximately $64 actually paid out after all is said and done. By contrast, if one person pledges $100, I get $97 of that money actually paid out.

In other words, a $100 donation is taxed at only 3%, instead of the 30% tax that's slapped on every single $1 donation. It's a really annoying set of fees that are designed to nickel-and-dime and punish people for small transactions, and because of this the conventional wisdom in the influencer and content creator business for many years now has been to encourage people to make more large donations and fewer small donations, in order to minimize the amount of money lost to transaction fees.

And it's not just financial greed motivating that conventional wisdom, either. If you sign up to give me $1 of support, presumably you're doing that because you want that money to actually give me $1 worth of support, instead of a full third of it being siphoned away by a faceless middle-man. Philosophically and ethically, both you and I are probably in agreement that we aren't doing any of this in order to put money in the pocket of a payment processing corporation.

So why didn't you raise prices earlier?

1. I didn't want to

2. I didn't really need to

For one thing, I don't really like maximizing revenue streams and optimally exploiting income sources. I don't like taking any more of people's money than I have to. I occasionally get messages from people apologizing that they can't support me financially, which is genuinely f'ing heartbreaking. Nobody should ever feel bad that they can't afford to pay me money, and so I have always preferred to leave the $1 option open.

Even with the 30% tax I was losing on every $1 transaction, the 65 cents that were left of that still added up to an okay amount of money in aggregate, and Patreon was never my main source of income. I was (and still am) making most of my money from ad revenue on YouTube. But a dollar just isn't worth what it was worth ten years ago anymore, and I'm not sure I can rely on ad revenue in the future as much as I do now, either.

Because the global economy is entering a period of chaos, and because the value of the US dollar, which is also the currency that is used to pay my income from ad revenue, looks set to start becoming historically unstable, I have to start thinking about ways to make my income more stable and predictable and secure.

I'm doing a number of things to try and get ready for this. I'm cutting my costs of living as much as I can, I really want to try and make the merch store more attractive and viable as a source of income, and I'm slowly working on trying to make all of my YouTube channels more consistent in their output so I have multiple sources of income on that front as well.

But I also need to look at updating my Patreon. I've been running this thing for ten years without ever increasing the prices, and much though I f'ing hate to do it because I hate commerce and I hate charging people money and I hate business and I hate finances and I hate rent and bills and capitalism, I just want to make goddamn videos

... much though I hate to do it, I do have to Be Economically Responsible and think about my future, and try to reduce inefficiencies in my business. Inefficiencies like for example losing 30% of my income on a lot of transactions to payment processing fees.

So. The $1 support tier is probably going to be replaced by a $3 sometime later this year, and again, if you want to subscribe at $1, you can subscribe now and you will be able to stay subscribed at that price for as long as you want.

If you want to do a small thing to help me out without pledging any more money, instead of subscribing at $1 a month, consider subscribing (or editing your subscription) to the $10 per YEAR option instead. That way, a lot less of your money gets taken by payment processors and actually gets used to support the thing you wanted to support when you signed up.

Anyway. Thank you for reading this post to the end, and sorry to have to give you another goddamn thing to have to think about right now.