Funding the Content Creating Middle Class

Increasingly, middle class people are leaving their stable jobs to start their own ventures, often funded through crowdsourcing. Photo courtesy of causevox.com.
Increasingly, middle class people are leaving their stable jobs to start their own ventures, often funded through crowdsourcing. Photo courtesy of causevox.com.

On January 5, Greg Miller and three of his cohorts quit their jobs at IGN to pursue a YouTube series they had been doing on the side called “Kinda Funny.” Miller was one of the higher-ups for one of the biggest entertainment websites and the top gaming website. The other members, Colin Moriarty, Nick Scarpino and Tim Gettys, were also hosts and video producers for the web giant. They left their fairly safe and stable positions with good pay and other benefits for what at the time was essentially a YouTube show where the group discussed everything from politics to Oreo cookie flavors.

In the last few months, Miller and company’s story isn’t that unique. Jim Sterling, formerly of Destructoid, also quit his rather stable job in games journalism and went on to focus solely on his own web series. Tom Merritt, a veteran journalist and podcaster, left jobs at CNET and the TWiT to create his own daily show discussing big stories in the technology industry. What all these ventures have in common is twofold. The first is that all of these ventures paint a picture of the future of creative content. The second is the platform they turned to: Patreon.

Patreon is the latest crowdfunding platform and immediately draws similarities to Kickstarter. While the mechanisms of the two are fundamentally identical, the aims are different. Kickstarter primarily funds big, fairly long term projects. In 2014, $529 million was pledged through the site, with the majority of the money going to projects in technology ($125 million), design ($96.7 million) and game development ($89.1 million). These projects included things like big budget video games or entrepreneurial ventures that required close to a few hundred thousand dollars worth of funding. Patreon, on the other hand, focuses on funding creative content: musicians, web comics, video hosts, podcasters, etc. Rather than Kickstarter’s one-time pledge system, Patreon supporters, aptly named patrons, choose an amount to give to the content producer per month or per creation. This is in contrast to Kickstarter’s singular lump sum model. Content producers can then provide rewards, such as early access to content or other perks, based on how much supporters pay. The amount of money raised on the fledgling site is much smaller than compared to Kickstarter with about $1 million being paid out to content creators per month. However, this balances out with smaller product offerings on a more frequent schedule as content producers put out something on a monthly, weekly or even daily basis.

This marks a shift from traditional revenue streams for these types of mid-level content creators. Traditionally, YouTube and other streaming services have been the bastion for content creators sporting large audiences and potential income through advertisements or sponsored content. The reality is that advertising often isn’t lucrative enough to be sustainable for many people. For example, Patreon’s founder, Jack Conte, singer of the band Pomplamoose, used to release music and videos through YouTube. In the span of a typical month, his band’s videos were viewed 3.5 million times, which seems like it would bring in good ad revenue. In actuality, the YouTube check only amounted to $149. With Patreon, his band currently makes over $6,000 from almost 2,000 patrons for each piece of content that it puts out.

Currently, Merrit receives around $14,000 per month for his show. Miller and his friends are getting over $17,000 per month for their videos, podcasts and livestreams. Sterling is bringing in close to $10,000 per month. A Capella group Pentatonix has been able to use the platform to get money from their fans in order to create music videos, raising almost $20,000 per video.

Perhaps the most important aspect to what Patreon and any future similar service do is to bring content creators closer to their audience. With the prevalence of ad blockers, content creators have had to turn to things like sponsored content, which is essentially masking an advertisement as an article or video. While occasionally this can work, it is disingenuous and fogs the credibility of the creator. With something like Patreon, the content creator is not dependent on outside influence for money, giving them more integrity which is crucial for something like news or entertainment reviews.

Plenty more of these “middle class” content creators are still coming out of the woodwork, and tools like Patreon will be the future alternative to traditional advertising, providing a balance of giving fans what they want, limiting outside influence and maintaining financial stability.

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