Where is Art?
When I want to see some art, I turn to my museum. I was brought up by a family who regularly took me to the museums in New York City and who asked me to see what was displayed and have something to say about it. I was also consuming art at the movies, in my school, and through books on architecture, art and drawing. I went to plays, acted in school plays and went to broadway to see professional plays. To my young eyes, art was everywhere, it was valued, and most of it cost money. You do realize that I was brought up in the 1960s without access to the internet, right? The largest free resource to me was the Britannica Encyclopedia, a 26-volume shelf monster with knowledge and some pictures. I loved paging through it.
What is The Cost of Art?
So this is a really big, much contested question and I will not be able to reliably resolve this today in this blog. BUT, everything has a cost, even when you see art for free. Part of that cost is the price paid by the artist to create that art and part of the cost is the medium through which it was created, distributed and viewed. I recently saw the exhibition on Georgia O’Keefe at the Peabody Essex Museum (PEM). What were Georgia’s costs in producing the her art, what was the cost of several photographers who documented her life and art and what did it cost the PEM to display this? I have a yearly membership and a car to drive and food to get before I see that art. PEM spent money to mount that exhibit but also spent money on maintenance costs of the building. So one of the lessons to learn is that the total cost may not be direct to you but there is always a cost to view art and we pay for a part of that experience.
Will Artists Ever Get Paid What They are Worth?
So to switch the viewpoint, from consumer to producer of art, who will pay for the artists to do this work? A strict capitalist solution has been elusive, as most artists are not put on retainer, but rather, become valuable enough to be paid by our society through a vague mechanism called reputation. The better the rep, the more we pay. But this system exists because it protects the consumers while preventing the starving artists from getting paid until they produce many good works of art. Now that I have no problem asking really big questions, is the value of creating the art equal to what we pay? I can’t even begin to answer how you might resolve the value of the art and what the creation is worth? How do you value the art, the process and the artist? What are artists worth? Should, artists be paid? Maybe they should just do it for the thrill of doing it, as they have for so many years. All of them dream of finding a patron, but most do it because they find great value in doing it. If they find it valuable, should we find it valuable?
Patron of the Arts: Patreon?
But what if there was an emerging solution, through capitalization of the art process on the internet? I turn to Crunchbase for help on this trend. “Crunchbase was founded to be the master record of data on the world’s most innovative companies” Crunchbase explains: “Patreon is a membership platform that makes it easy for artists and creators to get paid. It operates a platform that enables content creators, as well as artists, to be able to fund their work. Patron.com, a communications platform, enables connection between users and makes various accessible content, including videos, photographs, images, artwork, graphics, audio clips, comments, data, text, software, scripts, projects, other material and information, and associated trademarks and copyrightable works. Patrons pledge to support artists and creators on a recurring basis for each work created, empowering a new generation of creators the ability to make a living off of their passions.” (Crunchbase). So the key idea is that people would pay artists monthly, much like a patron of old would pay an artist.
ATM for Art?
I explained at the beginning of this blog a rather simple idea of how I grew up with art. But notice that my experiences did not include, Dance, Photography, painting with oil, etc. What if the country buys into Patreon’s redefinition of art to include all creators of art including clips of movies, graphics, game play creations, text of writing, and, the traditional art forms, of visual arts, music, theater and dance? And what if that system proposed by Patreon includes all arts forms on media distribution platforms like Youtube, Facebook, Instagram and other platforms that I don’t use or don’t even know? Maybe Patreon is just re-organizing how this works into a system of ATM teller machines for art? So metaphorically, you make art and deposit it in the machine (upload your art to the internet), then someone comes along and withdraws the art by paying for what it is worth, while also paying a small 5% fee to Patreon? My question always is, how would this make a difference to creators and consumers of art? I can see they would get paid, but at what price? And would this expanding product market help or hurt regular artists and consumers of art? Would this really advance the economic and aesthetic cause? Can we monetarize the creation and consumption of all art? Should we? Read on….
Patreon raises big round at ~$450M valuation to get artists paid
In an era where art is shared and streamed for free, Patreon offers new hope for turning content creation into a career. Illustrators, comedians, game makers, and musicians use Patreon to let fans pay a monthly subscription fee for special access to their work. In exchange, Patreon takes only a tiny 5% cut.
With 50,000 creators and 1 million subscribers on board paying an average of $12 per month for early and exclusive looks at their content, Patreon is on track to pay out $150 million in 2017. That means Patreon will only earn about $7.5 million this year despite doubling in size.
But investors are betting that if enough artists sign on and bring their fans, Patreon could grow into a pillar of the new creator economy. TechCrunch has learned that Patreon has closed a big Series C round of funding, three sources confirm. Two say it values the startup at around $450 million and that Index Ventures participated in the round but didn’t lead it. Patreon declined to comment for this story.[Update: Patreon now confirms that it’s raised $60 million in a Series C led by Thrive Capital. Read our writeup of the official funding announcement here.]
The cash should give Patreon the muscle needed to compete with other big platforms that help creators monetize, including YouTube and Facebook’s new Watch tab of original video. While those two have massive user bases and teams to court artists, they only pay out 55% of the ad revenue earned off a creator’s content. With some more marketing to boost awareness that Patreon pays out 95%, and that direct payments from fans deliver many orders of magnitude more revenue that ad views, Patreon could gain ground.
To Fund The Creative Class
Musician and videographer Jack Conte had struggled to earn enough from his work, and found one-off project crowdfunding platforms like Kickstarter didn’t provide the steady capital artists need to focus on creativity. So in 2013 he co-founded Patreon, “whose mission it is to fund the creative class” he told me in June. “Advertising? It doesn’t pay enough. Consumer payments has to be come a bigger portion of the financial mechanics that support art.”
Patreon had raised $47.1 million to date up through its January 2016 $30 million Series B led by Thrive Capital and joined by Index that also participated in the Series A. But this big infusion of new capital could boost the confidence of creators in the platform. If they know Patreon isn’t going to run out of money any time soon, they may be more enthusiastic about building a subscriber base for the long-run on the platform.
Deeper pockets could also allow Patreon to build out its suite of bonus tools for creators, some of which it could charge extra for. “There’s going to be new opportunities to build revenue streams into the product” Conte has promised me. He suggested that could include selling event tickets or merchandise, or better helping creators understand and communicate with fans. That could grow Patreon’s take beyond the 5% rake it takes that seems paltry compared to what platforms like iTunes or Spotify earn.
To its advantage, Patreon is relatively lenient about what types of content are monetized on its platform. Erotic drawings, adult games, and marijuana-related news and entertainment are all attracting subscribers on Patreon. Much of this isn’t even allowed on Facebook or YouTube, or can’t be monetized with ads following YouTube’s Adpocalypse crack down after the PewDiePie scandal or the new rules Facebook published this week.
Though this is a double-edged sword. Patreon has seen some right-wing political pundits raise money through hate speech. It kicked off several, leading to the creation of its alt-right clone Hatreon. More funding will bring more scrutiny, and Patreon will have the tough job of walking the free-speech-without-filth tightrope in codifying what exactly is allowed and enforcing those rules.
So far, Patreon hasn’t been too focused on helping people discover new creators to fund. That’s a massive opportunity for it to grow its revenue and assist artists. But it would also produce challenges. How much should Patreon promote already-popular creators who might have better conversion rates even if it makes the site into a bit of an echo chamber? Making editorial decisions about who to spotlight could also leave Patreon vulnerable if any of those creators end up offending people.
It’s all worth the risk, though, as a mission and as a business. Content distribution is moving online. Creators beyond video-makers and Indiegogo inventors want a steady paycheck. Ad platforms are proving to be restrictive, stingy, and just don’t bring in enough cash. Automation threatens old professions. The Internet is able to connect niche artists with niche audiences. And with all the new ways to forge bonds with your favorite creators, consumers are increasingly willing to pay for enhanced access to the personalities they love.
Patreon sits at the center of all these trends. Not every artist has to be starving.