With a little help from their fans
Patreon: a crowdfunding platform that makes art profitable
By Vanessa Hua
TWO YEARS AGO, Jack Conte spent more than $10,000 making a music video that features dancing robots, an animatronic head and a starship set he spent three months building by hand. He had planned to launch the video, entitled “Pedals,” on YouTube. But he realized he might make only a couple hundred dollars there from online advertising revenue.
According to Conte, ’06, Google’s video sharing website can be a great place to build an audience. But, he thought, creators — and their creativity — aren’t properly valued there. Only the breadth of one’s audience counts, not the fervency, and there’s no mechanism on the site for devotees to support artists directly.
“Advertisers don’t care that much about a superfan,” said Conte, who majored in music, science and technology at Stanford. “Every fan is worth exactly the same, .0002 cents, even if the superfan has watched every video and been to every show, which is ridiculous.”
It was a pivotal moment. What if such a platform existed, where the art patronage of yore met with contemporary crowdfunding concepts? Could he create the means to sustain himself as an artist not just for the next video or the next album but for years to come?
The answer wouldn’t affect just his solo work. Conte and his girlfriend, Nataly Dawn, ’09, had become an Internet sensation as the duo Pomplamoose, netting 90 million views on YouTube and starring in commercials for Toyota and Hyundai. Their video songs included a whimsical yet haunting version of Edith Piaf’s “La Vie en Rose,” in which Conte plays an accordion and a xylophone while Dawn kneels at a toy piano and sings. They had rejected offers from major record labels in order to retain creative and financial control of their work but still hoped to support themselves with their art. So far, their approach was working.
Conte called his college roommate, Sam Yam, ’06. The son of a Chinese restaurateur, Yam had tech know-how and an enterprising spirit: During his senior year at Stanford, he delivered In-N-Out hamburgers on campus, ordering up to 100 at a time and charging a delivery fee to each of his customers. After graduating, Yam co-founded AdWhirl, a mobile advertising platform that sold its assets to AdMob in 2009; soon after, Google acquired AdMob for $750 million.
Conte and Yam met at Coffee Bar, a popular tech hangout in San Francisco. Conte wanted advice but wasn’t sure how to proceed. Should he first ask Yam to sign a nondisclosure agreement to protect his trade secrets? “Nobody cares about your idea,” Yam told him. Around Silicon Valley, the conventional wisdom is that ideas are a dime a dozen. The value lies in the execution.
But when Conte explained what he wanted to do, Yam saw the potential.
“Don’t tell anyone else. We can do this,” Yam said, and started coding that night. Three months later, in May 2013, the roommates launched Patreon, a crowdfunding start-up that enables thousands of artists to raise a collective million dollars a month. The website welcomes creators of web comics, blogs, indie games, music, animation, illustrations, photography, podcasts, YouTube videos, articles — any content that might attract fans. Conte is chief executive, and Yam serves as president.
The debut featured just three artists. One of them was the lanky and gregarious Conte, with his robot video. Toward the end of it, he makes a shy appeal. “I’m asking for your help bringing this site to life. . . . Please take this step with me into something that I think could help a lot of people.”
Fans — and fellow creators — quickly signed on.
Unlike crowdfunding sites such as Kickstarter or Indiegogo that raise money for one-time projects, Patreon asks fans to subscribe to artists’ work on an ongoing basis. Fans can pledge an amount of their choosing — say, $1 or $10 or $100 per month, or per creation — to help keep their favorite artists producing over time. In exchange, they receive creative rewards that the artists dream up.
Pomplamoose fans, for example, receive downloads of original songs, tutorials on how to play them and how-to sessions on producing the videos. The funding helps them cover living expenses like rent, as well as operating costs, which have included a camera lens, software and the hiring of a string quartet.
Patreon takes a 5 percent cut of the pledges. After creators absorb the cost of credit card transaction fees (around 4 percent), they take in about 90 cents of every dollar pledged. Artists choose to receive their funds on a monthly or per-project basis, and their fans are charged accordingly.
Investors believe in the business model. In just two years, Patreon has brought in $17 million from venture capitalists, including Index Ventures, Thrive Capital and Alexis Ohanian, a partner at start-up incubator Y Combinator, and from the powerhouse talent agencies UTA and CAA.
“Unlike other sites which are project-based, this is career-based. It provides the ability for artists to live off their art,” said Danny Rimer, a partner at Index Ventures. Patreon also appeals to the do-good impulses of the millennial generation, he said. “It’s not enough to have an interesting service. They want to believe in a cause, in the social benefit of what they are supporting.”
At first, the founders ran Patreon out of their two-bedroom apartment in Noe Valley, on the south side of San Francisco. After the latest round of venture capital last summer, the start-up moved into an office in the city’s South of Market District. It plans to double its staff to 40 by the end of the year. Fragrant with fresh paint, the office has an industrial but playful atmosphere, with polished concrete floors, a rope swing, table tennis and three pianos (grand, upright and toy).
For now, Conte doesn’t draw a salary from Patreon; he wants to make a living as an artist, share common footing with his fellow creators and show his faith in the business model.
“If we update a settings page or change a reward, I want to feel it as hard as everyone else,” Conte, 30, said recently from a conference room at Patreon, where he sat with Yam and Dawn. The room was furnished with drum kit stools and art inspired by the Millennium Falcon, an iconic spacecraft from the Star Wars movies.
Dawn isn’t an employee but drops by the office occasionally. On weekends, she and Conte escape to their studio in Sonoma to record new video songs.
Conte grew up in Corte Madera, Calif., the son of a doctor and a nurse. Both jazz musicians, his parents instilled a love of music in Conte and his sister and supported their creative interests. At 17, Conte started a Claymation video, “Black Hat White,” that he worked on for four summers — an experience that became invaluable when he shot the videos that made a name for Pomplamoose. On the Farm, he played in bands, performed improv and served as equipment manager for the Stanford Film Society.
Long before Conte founded Patreon, he considered himself an entrepreneur. “As an independent creator, I did everything as a business owner. Doing a start-up, it’s like being a musician, but a little easier because people help you,” he said.
He and Dawn met at the CoHo, the campus coffeehouse, in 2005, when she opened for his band. (Nataly Dawn is her stage name; at Stanford, she was known as Natalie Knutsen). A gamine pastor’s daughter, Dawn grew up singing in the choir and also plays piano and bass guitar. Conte, who has a formidable lumberjack’s beard, appears on drums, piano and guitar in their videos.
“I’m good enough to record, to learn my part,” Conte says modestly. “I hack at everything.”
They formed Pomplamoose — a play on pamplemousse, the French word for grapefruit — in 2008.
On Patreon, Pomplamoose takes in $6,541 per video, an amount that places the duo among the site’s top quarter of earners. The funding accounts for roughly 60 percent of Pomplamoose’s revenue; the remainder comes from online music sales and licensing deals.
The most popular creators on the site include veteran journalist Tom Merritt, who earned $13,600 per month, as of mid-January, for his smart yet conversational take on the tech zeitgeist. A capella singing group Pentatonix made $18,971 per video performing covers of pop songs with the flavor of a Gregorian chant. Cartoonist Jeph Jacques brought in $9,717 per month for his comics featuring a mopey protagonist and his sociopathic robot buddy.
In January 2014, Merritt launched the Daily Tech News Show podcast after working for years as a journalist. “I haven’t had to change my lifestyle. I was able to replace the salary with crowdfunding,” he said. “It was a gamble, but I was shocked at how quickly we got to our goals. People feel good about helping to keep things going.”
In a survey of listeners, he asked what they thought about donating via Patreon. Responses included “positive, simple, feel good about myself,” “very easy and transparent” and “great to see how Tom’s monthly goals are doing.”
Last fall, Pomplamoose went on a 28-day, 23-city tour, which included stops at the Fillmore in San Francisco and The Bowery Ballroom in New York. To Conte, the tour was emblematic of the importance of Patreon. In a December blog post discussing the tour’s finances, he said the band sold nearly $100,000 in tickets and still lost money. It survived thanks to subscribers on Patreon and music sales from iTunes and Loudr, he said.
Critics online questioned the group’s tour expenses, claiming they spent too much on the tour crew and equipment rentals. Some called the post a promotion for Patreon, whose success benefited Conte even as he complained about the hardship of artists.
Conte said he has learned success brings out hatred. “Part of achieving some level of success is learning to tune out the rage,” he wrote in a follow-up post.
Running a media company is challenging. So is life as an indie musician. “It’s like pushing a boulder up the hill, seven days a week,” Conte said. “But it’s been wonderful learning how to do it. We want to make music the rest of our lives.”
Dawn says she’s excited to be at the forefront of the music industry’s transformation. “We caught the wave, in the first years of YouTube. Now we’re catching another wave, with Patreon. Both changed my life as an artist. It’s a huge part of how we’ll plan for the future.”
Vanessa Hua, ’97, MA ’97, is a freelance writer in San Francisco.
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