#How to Integrate Substack with Patreon
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Section 15: How to Integrate Substack with Patreon for Growth & Engagement
Summary of my Udemy Course “From Zero to Substack Hero.” Image source from the video location Purpose of this Series for New Readers If you are following this series, you can skip this intro and start from the next section. I have to introduce it to new readers as otherwise it will not make sense to them. This is a new series upon request from my readers. I recently developed a course titled…
#" "How blogs drive traffic to your Substack" "#Benefits of Patreon#Benefits of Sbustack#Do You Want to Go from ZERO to a Substack HERO in 2025?#Education for Substack and Patreon#From zero to Substack Hero on Udemy#How to Integrate Substack with Patreon#Join From Zero to Substack Hero on YouTube for free#Patreon for freelancers#Substack and Patreaon#Substack Mastery#Subtack for Freelancers#Why to Integrate Substack with Patreon
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How Astrologers Are Going Viral: Digital Trends You Can’t Ignore in 2025
Astrology, once confined to the back pages of newspapers and late-night TV, has undergone a digital transformation. In 2025, astrologers are not only gaining visibility but also going viral across platforms. The secret? A powerful mix of digital savvy, storytelling, and understanding their audience’s emotional needs. Here's a deep dive into how astrology is booming in the online world and the Digital Marketing For Astrologer and brands can’t afford to ignore this year.
1. The Rise of Astrofluencers and Micro-Communities
One of the biggest digital shifts in 2025 is the emergence of “astrofluencers.” These are astrologers who have built personal brands and massive followings on platforms like Instagram, TikTok, YouTube, and even LinkedIn. With audiences ranging from thousands to millions, these personalities use a blend of cosmic insights, real-life relatability, and engaging visuals to keep followers hooked.
Micro-communities are also thriving. Instead of broadcasting generic horoscopes, astrologers now niche down to serve specific segments — for instance, Gen Z water signs, working moms with rising Virgos, or entrepreneurs with Scorpio moons. These hyper-targeted approaches allow them to cultivate strong emotional connections and community loyalty, encouraging more engagement and shares.
2. Interactive and Visual Content Is King
Static horoscopes are being replaced by interactive reels, live streams, and visually rich infographics. In 2025, digital content that’s personalized, immersive, and mobile-first gets the most attention.
Tools like Instagram polls, interactive quizzes, and AI-powered birth chart calculators have made it easier than ever for followers to engage with astrology content. Some astrologers now use augmented reality to let followers “see” their planetary alignments or experience retrogrades in a simulated environment.
YouTube Shorts and TikTok are becoming go-to platforms for quick astrology explainers. Bite-sized content like “Mercury Retrograde Survival Tips in 30 Seconds” or “This Week’s Cosmic Energy for Fire Signs” are trending formats that grab attention and encourage virality.
3. AI-Powered Astrology and Personalized Insights
AI has penetrated every industry, and astrology is no exception. Many astrologers and astrology apps now harness AI to generate real-time, hyper-personalized horoscopes and predictive readings. These are not generic blurbs but nuanced, data-driven insights based on birth charts, moon cycles, and even daily moods tracked through app integrations.
AI chatbots that serve as digital astrologers are also on the rise. Users can ask questions like “How will Venus in Gemini affect my career?” and receive detailed responses within seconds. The convenience, speed, and personalization AI brings to astrology content are pushing the trend toward more customized spiritual guidance.
4. Spiritual Wellness Is Now Lifestyle Branding
Astrology in 2025 is no longer viewed as a fringe belief. It's part of the wider spiritual wellness movement. Astrologers have become lifestyle influencers, seamlessly blending cosmic advice with mental health tips, beauty rituals aligned with moon phases, or zodiac-based fashion recommendations.
This crossover into lifestyle and wellness content makes astrologers even more relatable. Collaborations with wellness brands, fashion houses, and digital platforms have also given astrology a mainstream presence. From curated moon ritual subscription boxes to zodiac-themed fitness apps, the integration of astrology into everyday life is fueling its popularity.
5. Monetization Models Have Evolved
Gone are the days when astrologers relied solely on one-on-one consultations. Today’s digital astrologers are diversifying income streams through subscription models, premium content tiers, live workshops, affiliate marketing, and merchandise.
Platforms like Patreon, Substack, and Ko-fi allow astrologers to offer exclusive content such as weekly astro-guides, full moon rituals, or birth chart deep-dives behind a paywall. Some even host digital retreats and virtual astrology bootcamps with hundreds of paying participants.
E-commerce is another trend, with astrologers launching personalized journals, zodiac-inspired candles, crystal kits, and more. By turning cosmic knowledge into tangible, branded experiences, they’re building sustainable digital businesses.
6. TikTok’s Algorithm Loves Cosmic Trends
In 2025, TikTok continues to be a powerhouse for virality, and astrology is one of its fastest-growing niches. Creators are leveraging TikTok’s algorithm to push trending sounds, challenges, and formats — all infused with cosmic relevance. Whether it’s a “Zodiac Sign as Coffee Orders” skit or a breakdown of upcoming lunar eclipses, the platform rewards astrologers who entertain while educating.
What makes TikTok powerful is its ability to catapult micro-creators into viral fame almost overnight. Astrologers who are strategic with hashtags, posting schedules, and audience interaction often find themselves on the For You Page (FYP), leading to rapid follower growth.
7. Data-Driven Astrology Is Here
In 2025, analytics are shaping content strategies for astrologers. With access to robust platform insights, astrologers are analyzing which signs engage the most, what content formats perform best, and even tracking the best time (based on audience location and time zones) to post cosmic forecasts.
Many astrologers are integrating tools like Google Analytics, Meta Business Suite, and advanced CRM platforms to understand customer behavior. By blending intuition with data, they’re able to optimize content and maximize reach.
8. Community-Driven Platforms Are Booming
New platforms focused solely on astrology and spiritual growth are gaining momentum. Apps like Sanctuary, Co-Star, and The Pattern have become digital hubs, offering community forums, guided meditations, live chat rooms, and daily updates. These platforms function like social networks but are rooted in astrology-based identities, enhancing user engagement and retention.
Astrologers using these platforms often gain more visibility within niche audiences and are able to host workshops, Q&As, and discussions that go beyond social media engagement. Community platforms are proving essential for fostering trust and long-term relationships.
9. Collaborations and Cross-Promotion Are Key
Cross-promotion among astrologers, wellness influencers, and even musicians or artists is a powerful trend. Joint Instagram Lives, podcast appearances, or newsletter collaborations expand audiences and reinforce credibility. An astrologer discussing zodiac signs with a fashion blogger or appearing on a wellness podcast offers exposure to new audiences and reinforces the relevance of astrology in everyday life.
In 2025, brands are also collaborating with astrologers during key astrological events — full moons, eclipses, or Mercury retrogrades — to launch themed campaigns and content. These collaborations add cosmic context to brand storytelling and deepen emotional resonance.
Final Thoughts
Astrology has always been about patterns, timing, and insight. In the digital age, it’s now also about platforms, algorithms, and engagement. Astrologers in 2025 are combining ancient wisdom with cutting-edge tools to reach global audiences like never before. They’re building communities, driving conversations, and redefining what it means to be both spiritual and viral.
Ranking Guru was incepted in the year 2015 with one specific goal in mind and that is to bring to life digital experiences that can give your business new heights of success and fame in the online world. Each day we strive to structure and strategize new high-end strategic web solutions to evolve further and earn ourselves the stature of a No.1 Web Design and Development Company.
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How Brands Are Partnering with the Creator Economy to Drive Revenue?

The creator economy has been a cathartic innovation for many online creators. On the other hand, it has gained commercial business value for brands. Collaborations with online creators have caused a shift from conventional celebrity endorsements to online influencer endorsements. The digital advertising industry has taken the internet by storm & is the sole reason for brands mulling over the idea of engagement rates, expecting higher revenue figures, resulting in adapting creative ways to attract the target audiences.
The Rise of the Creator Economy in Brand Partnerships
The digital content economy consists of content creators, influencers, and digital entrepreneurs who use platforms like YouTube, Instagram, TikTok, and Substack to monetize their expertise and audience. With billions of users engaging daily, brands have recognized the immense potential of partnering with these creators to tap into highly engaged niche communities.
Unlike traditional marketing, where businesses push one-size-fits-all messaging, creator collaborations allow for a more personalized approach. Creators build trust and credibility within their communities, making their endorsements more authentic and impactful than conventional advertising.
How Brands Are Leveraging the Creator Economy?

To drive revenue, brands are adopting several key strategies to integrate with the creator economy:
1. Co-creation of Branded Content
Brands are moving beyond sponsorships and actively co-creating content with creators. This strategy ensures the brand’s message is seamlessly integrated into the creator’s authentic storytelling. Examples include:
Fashion brands collaborating with influencers to launch limited-edition collections.
Tech companies work with YouTube reviewers to showcase product features.
Financial brands partnering with creators to simplify complex topics like investing and cryptocurrency.
2. Performance-Based Influencer Marketing
Instead of flat-fee sponsorships, businesses are shifting toward performance-based partnerships where creators earn commissions through affiliate marketing, referral programs, or revenue-sharing agreements. This approach aligns incentives, ensuring that creators drive actual business results, such as sales or sign-ups, rather than just engagement metrics.
3. Creator-Led Product Innovation
Some of the most successful brands in the creator economy are those that involve influencers in product development. Companies like Nike, Glossier, and Logitech have launched products in collaboration with creators, leveraging their insights and audience feedback to fine-tune offerings. This not only boosts sales but also strengthens brand loyalty.
4. Exclusive Membership and Subscription Models
Brands are increasingly utilizing the subscription-based model of the creator economy by offering premium content, courses, and behind-the-scenes access through platforms like Patreon and OnlyFans (for non-adult content). By providing value-driven exclusive content, brands can create recurring revenue streams while fostering community engagement.
Expanding Revenue Streams Through Creator Collaborations

Beyond direct sponsorships and content partnerships, brands are discovering innovative ways to integrate creators into their business models:
5. Creator-Driven E-commerce Strategies
E-commerce brands are embedding creators into their sales funnels by:
Hosting live shopping events on social platforms like TikTok, Instagram, and YouTube.
Partnering with creators to launch limited-time product drops.
Utilizing creator-led reviews to drive conversions on e-commerce sites.
6. Leveraging AI and Data Analytics for Creator Partnerships
AI-powered tools now enable brands to:
Identify the best-matched creators for their target audiences.
Measure ROI through advanced sentiment analysis and performance tracking.
Optimize influencer campaigns in real-time, ensuring maximum impact.
Case Studies: Brands Winning with the Creator Economy
Nike’s Partnership with Digital Athletes
Nike has successfully integrated itself into the online creator business by collaborating with fitness influencers and digital athletes. Through personalized sponsorships and co-branded training programs, Nike has expanded its reach and enhanced customer loyalty without relying on traditional advertising.
Chipotle’s TikTok Strategy
Chipotle has leveraged TikTok creators to drive viral marketing campaigns, resulting in significant spikes in sales. By engaging influencers to create fun, challenge-based content, Chipotle taps into the organic appeal of the creator economy to make its brand a trending topic.
Adobe’s Collaboration with Digital Creators
Adobe’s approach to the creator economy focuses on providing tools and resources to digital artists and content creators. Through partnerships with leading creatives, Adobe ensures its software remains a staple for professionals and aspiring creators alike.
L’Oréal’s Beauty Creator Program
L’Oréal has taken a strategic approach to the creator economy by building long-term relationships with beauty influencers. Through exclusive training programs and product collaborations, L’Oréal empowers creators to become brand ambassadors, driving sales while reinforcing brand credibility.
Challenges and Considerations for Brands
While the social media entrepreneurship presents enormous opportunities, brands must navigate certain challenges:
Finding the Right Creators: Aligning with influencers who genuinely represent a brand’s values is crucial for authenticity.
Regulatory Compliance: Brands must ensure transparency in partnerships, including proper disclosure of sponsored content.
Measuring ROI: Unlike traditional marketing, tracking direct revenue impact from creator partnerships requires a mix of analytics tools and performance-based metrics.
Brand Safety: Ensuring that brand messages remain consistent across creator collaborations is crucial to avoid misalignment or controversy.
The Future of Brand-Driven Creator Partnerships

As the creator economy continues to evolve, brands that embrace innovation will lead the way. Emerging technologies like AI-driven influencer analytics, blockchain-based creator payments, and decentralized content ownership will further shape how businesses interact with digital entrepreneurs.
Forward-thinking brands will not only collaborate with creators but also empower them—whether through co-branded ventures, equity partnerships, or shared revenue models. By deeply embedding into the creator economy, businesses can cultivate loyal customer communities, drive sustainable revenue growth, and future-proof their marketing strategies.
Brands that integrate creators into product development, customer engagement, and marketing strategies will set themselves apart in the increasingly competitive digital landscape. As Web3 technologies, decentralized content creation, and virtual influencers gain traction, the next wave of the digital content economy will bring even greater opportunities for brands willing to adapt.
Conclusion
The shift toward the creator economy is not just a passing trend—it represents a fundamental transformation in how brands engage with consumers. By leveraging creator partnerships, businesses can drive revenue, enhance brand trust, and create marketing that feels organic and impactful. As more companies embrace this model, those that strategically integrate with the digital content economy will find themselves at the forefront of the next wave of digital commerce and brand storytelling.
With continued innovation, collaboration, and data-driven strategies, brands can fully unlock the potential of the influencer economy and create long-term, sustainable business success.
Uncover the latest trends and insights with our articles on Visionary Vogues
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How to Make Money in 2025: Smart Strategies for Financial Growth
Making money in 2025 is all about adapting to the latest trends, leveraging technology, and building multiple streams of income. Whether you're looking for a side hustle, a full-time business, or passive income, there are endless opportunities to capitalize on. Here are some of the smartest ways to make money in 2025.
1. Build a Personal Brand and Monetize It
In today’s digital world, personal branding is a powerful tool for making money. Whether you’re an expert in a field, a content creator, or a niche influencer, you can turn your reputation into income.
Ways to Monetize a Personal Brand:
Sell digital products like courses, e-books, or templates.
Offer coaching or consulting services.
Launch a membership community or subscription service.
Partner with brands for sponsorships and collaborations.
2. Master AI-Powered Side Hustles
AI is changing the way we work, and those who use it wisely can create new revenue streams. Many businesses are searching for AI-powered solutions to streamline their processes, and you can provide them.
Profitable AI Side Hustles:
AI-powered content creation (writing, graphics, and video editing).
AI automation services for businesses.
Selling AI-generated assets (logos, stock images, voiceovers).
Creating and selling chatbots for customer service.
3. High-Ticket Service-Based Business
Instead of chasing small sales, focus on offering high-value services that generate large payouts. In 2025, many professionals are turning to service-based businesses that cater to high-paying clients.
Examples of High-Ticket Services:
Business consulting and coaching.
Premium web design and branding services.
AI integration consulting.
Luxury travel planning or concierge services.
If you have expertise in a field, positioning yourself as a premium service provider can lead to big earnings.
4. Monetize Your Knowledge with Online Courses
E-learning is bigger than ever, and people are willing to pay for high-quality educational content. If you have expertise in any subject, you can create and sell an online course.
How to Get Started:
Identify a topic people want to learn about.
Create a course using platforms like Teachable, Udemy, or Kajabi.
Use social media marketing to attract students.
Offer upsells like coaching or exclusive group memberships.
5. Become a Paid Community Builder
More people are moving away from traditional social media and looking for niche communities. If you can create a valuable online space, people will pay to be part of it.
How to Monetize a Community:
Start a paid Discord or Telegram group.
Launch a Patreon or Substack with premium content.
Build a private membership site with exclusive benefits.
Organize mastermind groups or virtual events.
6. Invest in Digital Real Estate
While traditional real estate remains lucrative, digital real estate is becoming a major player in wealth-building. This includes domains, websites, and virtual assets.
Best Digital Real Estate Investments:
Buy and flip domain names.
Invest in revenue-generating websites.
Purchase virtual real estate in the metaverse.
Build and sell authority blogs or niche websites.
7. Create a Subscription-Based Business
Subscription models create predictable income by charging customers on a recurring basis. This can be applied to both digital and physical products.
Subscription Business Ideas:
Exclusive content memberships (newsletters, premium blogs).
Subscription boxes (beauty, fitness, lifestyle).
Software-as-a-Service (SaaS) solutions.
Private community memberships.
8. Leverage the Power of Micro-SaaS
Micro-SaaS is a small, highly specialized software solution that caters to niche audiences. Unlike massive software companies, Micro-SaaS businesses can be launched by a single person or a small team.
How to Start a Micro-SaaS Business:
Identify a niche problem that software can solve.
Use AI tools or hire developers to create a simple software solution.
Offer a monthly subscription for access.
Scale by adding features based on customer feedback.
9. Invest in Alternative Assets
Wealth-building in 2025 isn’t just about stocks and crypto. Alternative assets offer new ways to diversify and grow your money.
Top Alternative Investments:
Fractional real estate investing.
High-value collectibles (watches, rare sneakers, digital art).
Peer-to-peer lending.
Farmland investing.
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510: Cryptolombia? Digital currencies in Colombia and Latin America
This week, Emily Hart is setting out into the Wild West of cryptocurrencies here in Colombia and beyond. Is cryptocurrency the future of finance in Latin America? Is it safe? Is it just another way for rich people to hide their wealth from the tax man? Or for criminals to launder income? Or could it be a way for people to take banking into their own hands, a way for all of us to take control from a global system of banking we have so little say in? To explain all of that, we have on the show today Mat Di Salvo, Colombia-based correspondent covering crypto since 2019 for Decrypt, and two experts from Global Financial Integrity, a Washington DC-based think tank focused on illicit financial flows, corruption, and money laundering. Claudia Helms is the Director of the Latin America and Caribbean Program at GFI, having worked at the Organization of American States; And formerly at the UN, Claudia Marcela Hernández works as Policy Analyst for Central America in Global Financial Integrity. By early 2020, the region had 15.8% of the total volume of bitcoins worldwide, and it has grown exponentially since then. Last year, Mexico, Brazil, and Argentina were in the top 20 for global adoption – Colombia was 32nd in the world. Venezuela was 40th. Looking at crypto in any country requires a close look at the context, unique in every case: this region is turning to digital and virtual currencies for many different reasons, using it to send remittances, invest, and save – especially important in countries that have unstable governments, high inflation, or low levels of trust in institutions. Here in Latin America, levels of poverty and informal employment might create barriers to usage, while technological and educational gaps create unique challenges for users, especially when a new digital revolution of cryptocurrencies and virtual assets arrives without adequate regulation, government oversight, or consumer awareness – particularly around scams and security. This is why GFI started https://criptoabierto.com/ - a set of resources around crypto in Latin America designed for users and policy-makers alike. Basically, regulation of cryptocurrencies in the region does not adequately match its current usage and adoption. Colombia has yet to adopt legal framework, despite a growing number of users, but there is movement around this issue and various institutions have released commentary on it, and President Gustavo Petro has expressed interest in encouraging crypto usage - and mining - in the country. Thanks to the anonymous nature of this universe, it’s difficult to get accurate data on exactly who is using crypto and what for, and though it’s certainly not only criminals using these currencies and assets, they have high potential for money laundering and channelling illicit flows of money, from stolen funds and fraud to payments for illegal goods and funding of terrorist groups. We’ll be talking about the opportunities and risks associated with cryptocurrencies, how their form and use are evolving, plus how (and why) cryptocurrencies can and should be regulated. The Colombia Briefing is also reported by Emily Hart – to get it direct to your inbox or email, you can subscribe to the Colombia Briefing via her Substack substack.com/@ehart or subscribe to the podcast’s Patreon.
Check out this episode!
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Episode 563 - Phillip Lopate
With his new collection, A YEAR AND A DAY: AN EXPERIMENT IN ESSAYS (NYRB), master essayist Phillip Lopate explores the world & himself through the mode of a weekly blog. We get into how he adapted to a short, time-constrained essay form for The American Scholar, how he avoided The Columnist's Curse (limitless curiosity helps!), whether an essayist can truly write about anything, and how he has and hasn't changed since the 2016-17 period in which he wrote these pieces. We talk about Phillip's integration of the private and public self in his writing, how his wife & daughter felt about being included in this book, the question of whether he's fulfilled as a writer, why he hides his journal, and how editing the three Great American Essay collections allowed him to leave something canonical behind for students & readers. We also discuss how it feels when readers thinking they know him from his essays, how his books and essays add up to a fragmentary, lifelong memoir (and why he'll likely never write an actual memoir or autobiography), why his multiple myeloma diagnosis was more of a psychological hit than a physical one, how he found himself working on a biography of Washington Irving, the benefits of a fragmentary unitary self, the career validation of being inducted into theAmerican Academy of Arts & Letters, and a LOT more. • More info at our site • Support The Virtual Memories Show via Patreon or Paypal and via our Substack
Check out the new episode of The Virtual Memories Show
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Tumblr Futures and the Newsletter Revolution
Tumblr could be a platform for newsletter writers and other creators

Photo by Patrick Fore on Unsplash
I've been using Tumblr fairly consistently for many years, here at stoweboyd.com and on other blogs, like workfutures.org. I think I moved to Tumblr sometime in 2007, importing materials I had managed previously on Typepad and Blogger. At any rate, I now have over 14,000 posts here, and (supposedly) 163,000+ followers.
I am dug in.
In recent years, with the rise of the newsletter revolution, I have tried many newsletter platforms, including Patreon, Medium, Revue, and Substack. At the present time I am publishing the Work Futures newsletter on Substack.
Substack is certainly the best of the various platforms I have tried. I want to like Medium, but they keep shifting their approach and plans, and have not been very fast at implementing various improvements they've discussed (such as importing subscriber lists). Substack simply works at what it aims to do. However, Substack lacks a feeling of community of the sort that Medium and Tumblr have.
I can envision a version of Tumblr that would include newsletter support: subscriber registration, subscription fees, emailing, stats, and so on. Much of this could build on the Tumblr follower model, extended to include subscribers.
I have no idea whether the Tumblr folks are intending anything of this sort. But why not?
Tumblr was acquired by Automattic -- the folks behind WordPress -- in August 2019, and has been letting Tumblr be Tumblr, aside from continuing the ban on adult content that Verizon imposed. There is work afoot to move Tumblr onto a WordPress backend, but no grand strategy has been disclosed about Tumblr and newsletters.
Automattic acquired Atavist in 2018, with the goal of integrating Atavist publishing model, including newsletters, into the company's existing LongReads product. LongReads is a reader-supported project to fund long format writing, and the feel is something like Medium: subscribers pay $5 per month to supporth the site.
In recent days, Facebook, Twitter, and LinkedIn have announced plans to get into newsletters, Twitter by acquisition of Revue. I am a heavy user of Twitter, and see that the Revue deal could work for them.
What I really want is a souped-up, newsletter-supporting Tumblr, where I can get the social media community of Tumblr with the addition of a newsletter community something like Substack, all in one package.
I hope they are working on it.
I forgot that I had written about this idea two years ago. See A New Direction For Tumblr:
For a few months, I have been advocating a major addition for Tumblr, something that might offer a new path for the more-or-less stagnant property: add the functionality to allow Tumblr 'creators’ to make money on the site. This would mean
Subscriptions for access to material behind a paywall (this would mean integration with Stripe or some other money platform)
Newsletter tools that integrate with Tumblr existing publishing workflow
Creation (or acquisition) or podcasting and video capabilities
Possible Medium-like publishing schemes so that creators can get paid for popular content.
Advertising opportunities based on tags?
I also happened upon this post by Richard MacManus from Sep 2019, How blogs, newsletters & Tumblr can fight back against social media - Cybercultural, in which he makes a similar argument:
In my view, there’s potential to build a significant new form of networking with blogs, Tumblr and email newsletters, this time built around cultural content.
The current wave of email newsletters proves there is demand for thoughtful media content, while Tumblr shows that this content can include more multimedia than we typically see in email newsletters. Naturally, multimedia is best viewed on the Web - not in inboxes. So I’m hoping Automattic can find a way to direct readers back to the Web, with the help of its latest acquisition.
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I agree with @mens-rights-activia . There are big concerns about this product, but I actually think it's a worthwhile experiment. The concerns I see most often about this product are the following:
1. Fanfic is going to be a disaster. Tumblr seems to be either uninformed or unconcerned about the legal ramifications of folks putting fanfic behind a paywall.
I agree with this concern and Tumblr should figure it out. I'm sure with all the hububb (and their own legal team), they'll realize that if they're making a cut off of our subscriptions, they can't wash their hands of the issue. Plus, Disney is absolutely brutal. Many of these big companies are. They need to come up with clearer guidelines. And also perhaps consider what kind of monetization best suits fandom creators. If they can have guidelines so we can still support those folks safely, that would be great.
I know folks are concerned that it's going to take all of Tumblr down, but I'm less concerned of that because Redbubble has figured out a semi-happy medium where they aren't dead. Redbubble's approach isn't going to work for Tumblr, but it does give me hope that there is a happy medium somewhere.
I would also ask Tumblr @staff to consider something a little more like Brave's tipping system (or integrating with Brave's tipping system) where you can load the browser up with money and then based on how long you spent on different sites, it recommends who you might want to tip. Their lawyers can determine if that's just as risky as putting content behind a paywall. It's possible that the "posts+" concept is safer because you can clearly legally point to the fact that "Yes, I draw fan art, but everything behind my paywall is an OC". I don't know. That's for lawyers to determine. But if tipping is less risky from a fanfic perspective, then that might be a better fit for the style of content Tumblr tends to create.
2. There's so much broken with this site, you shouldn't trust them to run this and/or they need to fix other stuff before it's worth trying this.
I disagree. Predominantly because: (a) WordPress just took over and they have a whole plan to revamp the backend. I trust that that's in progress, and therefore (b) I have faith that a company can do multiple things at the same time. The team is 200 people. The infrastructure folks are not the same as the product folks (speaking from experience working in tech companies).
I can kinda see the trust thing when it comes to "hey if you're paying, you'll want a functioning experience". But I think the trust thing about "DON'T LET THEM HOLD YOUR MONEY" is overblown. They're using Stripe. They're not building fintech infrastructure. If you trust Stripe, then you're probably fine.
3. Tumblr's cut is too high, how dare they
This is a misunderstanding. Folks see the 30% cut on mobile (which a cut set by and going to Apple and Google) and think it's Tumblr's cut. But it's not. It's demanded by Apple and Google and there's nothing Tumblr can do about it. Except maybe decrease their cut from 5% to 2% on mobile, but that's not gonna do much for you. Just don't pay for anything through an app ever. In a lot of cases you're paying a surcharge because of Google and Apple. Check out the Epic v Apple lawsuit for more.
Furthermore, Patreon's cut is 8-12%, Substack is 10%. Tumblr's 5% is cheap by comparison. Some might say you're paying less because they have so many little things to work out.
4. How dare they try to monetize, we will go down with this ship!!! I hate the people who run this!!!
I know this has been a really deep rooted culture here. And it's fine and it's funny. But I think it's a little silly here because this is literally the best philosophical approach (NOT execution, per se) to monetization we could have asked for. Like oh...Tumblr wants to be a sustainable business by allowing creators to make money??? Instead of just ads where they're the only ones making money?? We're... we're upset about this? We're upset about the opportunity to support creators without having to go to YouTube or Twitter or something? Do you know how much cooler WordPress is compared to Google or Twitter?
(I've also noticed that folks don't know WordPress owns Tumblr now. Please read the "Julia Alexander: The Tumblr community has watched as executives from Yahoo and Verizon came in and tried to grow something that they really didn’t understand" section here to get a sense of them).
I can name writers that I enjoyed on Tumblr that left years ago because they had no way to further their career here. It was better for them to be on Twitter, etc. Allowing followers to pay for your work is actually a feature folks were asking for years ago.
Also, we talk a good game about wanting to be here when Tumblr dies. But I've seen the way we talk about Twitter. We'd lose our fucking minds if Tumblr actually had to shut down.
5. What about the porn???
First, I think it's important to update folks that the ones who got rid of the porn and the ones who own Tumblr now are completely different companies. It doesn't change anything practically, I think some people just don't know that.
I agree that this matters to folks. And Post+ doesn't solve for that issue. I recommend folks keep asking for it, and hopefully if it's important enough to enough people, Tumblr will jump through the infrastructure hoops to figure out how to allow it. If you want to read more of the Automattic CEO's thoughts on why porn is complicated, check out this interview. You want the "Nilay Patel: Obviously, Verizon decided that adult content was going away. You tweeted last night, “If people want big policy changes here, put pressure on the app stores of Apple and Google, no one else has any leverage.” What did you mean by that?" section and the one below.
Furthermore, allowing people to pay for NSFW content is even more complicated than serving it for free. Stripe is the one that labels "adult services" as a restricted business that cannot use their service. Even if Tumblr supported NSFW content well right now, Stripe wouldn't let them allow that on Post+.
If this is important to you, keep asking Tumblr about it. If they know it's worth it, maybe they'll figure something out. But just know that it's not going to happen in a day.
In conclusion, I think this is a worthwhile experiment. It has issues that need to be worked out. But it's a worthwhile experiment. It's also going to be a huge test of if WordPress can execute better than any of the previous Tumblr overlords. (Which is funny because I don't think the staff of actual Tumblr has changed that much, but it's still going to be seen as a test of WordPress' process). I know some of you disagree with me and I think that's great. That's what keeps Tumblr interesting: different view points. And your concerns are going to push staff to make the product the best it can be. Just remember to be constructive in your feedback.
If you got all the way here, here's a gold star: ⭐
Y’all, they aren’t saying the entire site will be monetized, just the people who choose to use the feature
but we could literally use this post plus thing to get porn back on the site among other things
also tumblr as a site is not generating money, I guarantee you this is a way to get revenue for the site which is much needed and could actually get more people hired to actually run the site better.
need I remind you, this site lost close to 1 billion in worth and it has billions of posts and millions of accounts so think about the sheer cost of running a site like this. Those laughable ads they’re running sure ain’t bringing much revenue either.
It’s not ideal, it’s an imperfect idea(legal issues with fanwork has to be sorted out) but realistically tumblr as a website, with its current model, will not be around for long unless it can find a way to sustainably make revenue and this is the model that a lot of sites are headed towards
No one wants this but I’d rather not be able to have access to certain posts than to lose the entire site
Just wanted to properly make a post because I don’t think people are fulling considering the “why”
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Good News for New Writers & Bad News for Established Ones
But Both Can Be Winners with a Strategic Approach I am pleased that my new account, with 100 followers, now gets more visibility than my old account, with 101835 followers. Here is what new and established writers could do to adapt. Today, I experienced a mix of emotions when I discovered that my new Medium account, created out of necessity after being targeted by scammers, organically gained…
#Boost program on Medium#Building your own platform for grwoth#business#Freelance writing strategy#Growing audience on Medium#How to build an audience without Medium#How to integrate Substack and Patreon#Medium#Medium publication growth#Medium vs. Substack#Network distribution analysis#No network distribution on mediim#Organic growth on Medium#Paid subscribers on Substack#stories#Substack success tips#Why not to trust Medium#Writer community insights#writers#writing#Writing strategy for established writers on Medum#Writing strategy for new writers on medium#writingcommunity
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Patreon’s future and potential exits
Through the Extra Crunch EC-1 on Patreon, I dove into Patreon’s founding story, product roadmap, business model and metrics, underlying thesis, and competitive threats. The six-year-old company last valued around $450 million and likely to soon hit $1 billion is the leading platform for artists to run membership businesses for their superfans.
As a conclusion to my report, I have three core takeaways and some predictions on the possibility of an IPO or acquisition in the company’s future.
The future is bright for creators
First, the future is promising for independent content creators who are building engaged, passionate fanbases.
There is a surge of interest from the biggest social media platforms in creating more features to help them directly monetize their fans — with each trying to one-up the others. There are also a growing number of independent solutions for creators to use as well (Patreon and Memberful, Substack, Pico, etc.).
We live in an economy where a soaring number of people are self-employed, and the rise of more monetization tools for creators to earn a stable income will open the door to more people turning their creative talents into a part-time or full-time business pursuit.
Membership is a niche market and it’s unclear how big the opportunity is
Patreon’s play is to own a niche category of SMB who it recognizes has particular needs and provide them with the comprehensive suite of tools and services they need to manage their businesses. A large portion of creators’ incomes will need to go to Patreon for it to someday earn billions of dollars in annual revenue.
The market for content creators to build membership businesses appears to be growing, however, membership will be only one piece of the fan-to-creator monetization wave. The number of creators who are a fit for the membership business model and could generate $1,000-500,000 per month through Patreon (its target customer profile) is likely measured in the tens of thousands or low hundreds of thousands right now, rather than in the millions.
To get a sense of the revenue math here, Patreon will generate about $35 million this year from the 5,000-6,000 creators who fit its target customer profile; if you believe this market is expanding at a fast clip, capturing 10% of the revenue (Patreon’s current commission) from 20,000 such creators could bring in $140 million. And that’s without factoring in the potential success of Patreon implementing premium pricing options, which is a high priority. If Patreon can increase its commission from 10% to 15%, it would need around 47,500 creators in the $1,000-$500,000/month range (9.5x its current number) to reach $500 million in revenue from them.
There is a compelling opportunity for a company to provide the dominant business hub for creators, with tools to manage their fan (i.e. customer) relationships across platforms and to manage back-office logistics. At a certain point it taps out though.
That’s one of the reasons why Patreon’s vision includes extending into areas like business loans and healthcare. For companies targeting small and medium businesses like Shopify, Salesforce and Dropbox, there is so much more growth tied to their core products that there is no need for them to consider such unrelated offerings as business loans. Patreon has to both expand its market share and also expand the services it offers to those customers if it wants to reach massive scale.
Patreon faces serious competition but is evolving in the right direction
Patreon is the leading contender in this market, and there’s a role for an independent player even if Facebook, YouTube, and other distribution platforms push directly competing functionality. Patreon will need to make three important changes to compete effectively: more aggressively segment its customers, make the consumer-facing side of its platform more customizable by creators, and build out more lightweight talent management services.
What’s next for Patreon?
Having raised over $100 million in funding over the last six years, what is the path to a liquidity event for investors and employees?
In a worst case scenario, it is unlikely the company would go out of business even if it fell into disarray because it would be strategic for several large companies to takeover at a discount. Patreon may be on the path to IPO (as CEO Jack Conte hopes), but I find it more likely that the company gets acquired sometime in the next couple years.
Path to IPO?
If a public offering is in Patreon’s future, it’s several years out. It now defines itself as a SaaS company and has a plan to earn a higher blended commission on the sales of its customers through premium pricing options. It is a frequently misunderstood company, however, and needs to prove that a big market exists for mid-tail creators building membership businesses.
According to a summary by Spark Capital’s Alex Clayton, SaaS companies who went public in 2018 typically:
had $100-200 million in revenue over the prior twelve months,
were 14 years old,
had an average year-over-year revenue growth rate of ~40%,
earned 90% of revenue from subscriptions,
had a median gross margin of 73%,
ranged from roughly 500 to 2500 employees,
had a raised a median of $300 million in VC funding,
and IPO’d with a median market cap of $2 billion
Public market companies to benchmark it against will be Shopify (as SaaS infrastructure for small businesses selling to, and managing payments from, consumers) and Zuora (Patreon can be viewed as a media-specific SMB alternative to Zuora’s “Subscription Relationship Management” system). Compared to Shopify, whose market of SMB e-commerce businesses globally is easily understood to be enormous, Patreon would face more skepticism from public investors about the market size of mid-tail content creators.
Patreon’s gross margins can’t be much more than 50% given that almost half of revenue is going toward payment processing. Patreon mirrors Shopify’s topline revenue growth in the run up to its 2015 IPO: Shopify reported $23.7 million for 2012, $50.3 million for 2013, $105 million for 2014 and I estimate Patreon brought in $15 million for 2017, $30 million for 2018, and will hit $55 million for 2019. Most of Shopify’s revenue came from subscriptions, however, with only 37% coming from the “merchant solutions” services where Shopify had to pay out payment processing fees. Patreon’s revenue net of payment processing fees is closer to $7.5 million for 2017, $15 million for 2018, and $27 million (predicted) for 2019.
There’s a lot of capital chasing late-stage startups right now. How long that remains the case is unknown, but Patreon can likely raise the funding to operate unprofitably a few more years — getting topline revenue closer to $150-200 million, proving creators will adopt premium pricing, and showcasing its ability to compete with Facebook and YouTube in a growing market. In that case, it could become a strong IPO candidate.
The acquisition route
The other scenario, of course, is that a larger company buys Patreon. In particular, one of the large social media platforms building directly competitive features may decide it is easier to buy their expansion into membership than build it from scratch. Patreon is the dominant platform without any noteworthy direct competitor among independent companies, so acquiring it would immediately put the parent company in a market-leading position. Competing social platforms wouldn’t have another large Patreon-like startup to acquire in response.
There are three companies that jump out as both the most likely acquirers. Each of these M&A scenarios would be mutually beneficial: advancing Patreon’s mission and providing strategic value to the parent. The first two companies are probably obvious, but the last one may be less known to TechCrunch readers.
Facebook
I highlighted Facebook as the top competitive threat to Patreon. This is also why it’s a natural acquirer. Patreon would bring fan relationship management to the Facebook ecosystem and particularly the company’s Creator App with CRM and analytics specifically fit for creators’ needs. It would also bring a stable of 130,000 creators of all types to make Facebook the primary infrastructure through which they engage their core fans.
Facebook is prioritizing human relationships more and clickbait content less. A natural replacement for the flood of news articles and viral videos is deeper engagement with the creators that Facebook users care the most about.
Since the annual churn rate of Patreon creators who earn $500 per month or more is under 1%, the ~9,200 creators who fit that category would likely stick around as Patreon’s infrastructure integrates with Facebook’s; the vast majority probably already have Facebook pages and possibly use the Creator App.
Facebook’s data on who fans are, what they like, and who their friends are is unrivalled. The insights Facebook could provide Patreon’s creators on their fans could help them substantially grow their number of patrons and build stronger relationships with them.
Like all major social media platforms, Facebook has partnership teams vying to get major celebrities to use its products. Patreon could lock the mid-tail of smaller (but still established) creators into its ecosystem, which means more consumer engagement, more time well spent, and more revenue through both ads and fan-to-creator transactions. Owning and integrating Patreon could have a much bigger financial benefit than solely revenue from the core Patreon product.
As a Facebook subsidiary, Patreon would stick more closely to being a software solution; it wouldn’t develop as robust of a creator support staff and the vision that it may expand to offer business loans and health insurance to creators would almost surely be cut. Facebook would also probably discontinue supporting the roughly 23% of Patreon creators who make not-safe-for-work (NSFW) content.
Given Patreon’s mission to help creators get paid, it may make a bigger impact as part of Facebook nonetheless. Facebook’s ecosystem of apps is where creators and their fans already are. Tens of thousands of creators could start using Patreon’s CRM infrastructure overnight and activating fan memberships to earn stable income.
A Facebook-Patreon deal could happen at any point. I think a deal could just as likely happen in a few months as in a few years. The key will be Facebook’s business strategy: does it want to build serious infrastructure for creators? And does it believe paywalled access to some content and groups fits the future of Facebook? The company is experimenting with both of those right now, but doesn’t appear to be committed as of yet.
YouTube
The other most likely acquirer is Google-owned YouTube. Patreon was birthed by a YouTuber to support himself and fellow creators after their AdSense income dropped substantially. YouTube is becoming a direct competitor through YouTube Memberships and merchandise integrations.
If Patreon shows initial success in getting creators to adopt premium pricing tiers and YouTube sees a strong response to the membership functionality it has rolled out, it’s hard to imagine YouTube not making a play to acquire Patreon and make membership a priority in product development. This would create a whole new market for it to dominate, making money by selling business features to creators and encouraging fan-to-creator payments to happen through its platform.
In the meantime, it seems that YouTube is still searching for an answer to whether membership fits within its scope. It previously removed the ability for creators to paywall some videos and it could view fan-to-creator monetization efforts as a distraction from its dominance as an advertising platform and its growing strength in streaming TV online (through the popular $40/month YouTube TV subscription).
YouTube is also a less compelling acquirer than Facebook because the majority of Patreon’s creators don’t have a place on YouTube since they don’t produce video content (as least as their primary content type). Unless YouTube expands its platform to support podcasts and still images as well, it would be paying a premium to acquire the subset of Patreon creators that it wants. Moreover, as much as a quarter of those may be creators of NSFW content that YouTube prohibits.
YouTube is the potential Patreon acquirer people immediately point to, but it’s not as tight of a fit as Facebook would be…or as Endeavor would be.
Endeavor
The third scenario is that a major company in the entertainment and talent representation sphere sees acquiring Patreon as a strategic play to expand into a whole new category of talent representation with a technology-first approach. There is only one contender here: Endeavor, the $6.3 billion holding company led by Ari Emanuel and Patrick Whitesell that is backed by Silver Lake, Softbank, Fidelity, and Singapore’s GIC and has been on an acquisition spree.
This pairing shows promise. Facebook and YouTube are the most likely companies to acquire Patreon, but Endeavor may be the company best fit to acquire it.
Endeavor is an ecosystem of companies — with the world’s top talent agency WME-IMG at the center — that can each integrate with each other in different ways to collectively become a driving force in global entertainment, sports and fashion. Among the 25+ companies it has bought are sports leagues like the UFC (for $4 billion) and the video streaming infrastructure startup NeuLion (for $250 million). In September, it launched a division, Endeavor Audio, to develop, finance and market podcasts.
Endeavor wants to leverage its talent and evolve its revenue model toward scalable businesses. In 2015, Emanuel said revenue was 60% from representation and 40% from “the ownership of assets�� but quickly shifting; last year Variety noted the revenue split as 50/50.
In alignment with Patreon, Endeavor is a big company centered on guiding the business activities of all types of artists and helping them build out (and maximize) new revenue streams. When you hear Emanuel and Whitesell, they reiterate the same talking points that Patreon CEO Jack Conte does: artists are now multifaceted, and not stuck to one activity. They are building their own businesses and don’t want to be beholden to distribution platforms. Patreon could thrive under Endeavor given their alignment of values and mission. Endeavor would want Patreon to grow in line with Conte’s vision, without fearing that it would cannibalize ad revenue (a concern Facebook and YouTube would both have).
In a June interview, Whitesell noted that Endeavor’s M&A is targeted at companies that either expand their existing businesses or ones where they can uniquely leverage their existing businesses to grow much faster than they otherwise could. Patreon fits both conditions.
Patreon would be the scalable asset that plugs the mid-tail of creators into the Endeavor ecosystem. Whereas WME-IMG is high-touch relationship management with a little bit of tech, Patreon is a tech company with a layer of talent relationship management. Patreon can serve tens of thousands of money-making creators at scale. Endeavor can bring its talent expertise to help Patreon provide better service to creators; Patreon would bring technology expertise to help Endeavor’s traditional talent representation businesses better analyze clients’ fanbases and build direct fan-to-creator revenue streams for clients.
If there’s opportunity to eventually expand the membership business model among the top tiers of creators using Patreon.com or Memberful (which Conte hinted at in our interviews), Endeavor could facilitate the initial experiments with major VIPs. If memberships are shown to make more money for top artists, that means more money in the pockets of their agents at WME-IMG and for Endeavor overall, so incentives are aligned.
Endeavor would also rid Patreon of the “starving artist” brand that still accompanies it and could open a lot of doors in for Patreon creators whose careers are gaining momentum. Perhaps other Endeavor companies could access Patreon data to identify specific creators fit for other opportunities.
An Endeavor-Patreon deal would need to occur before Patreon’s valuation gets too high. Endeavor doesn’t have tens of billions in cash sitting on its balance sheet like Google and Facebook do. Endeavor can’t use much debt to buy Patreon either: its leverage ratio is already high, resulting in Moody’s putting its credit rating under review for downgrade in December. Endeavor has repeatedly raised more equity funding though and is likely to do so again; it canceled a $400M investment from the Saudi government at the last minute in October due to political concerns but is likely pitching other investors to take its place.
Patreon has strong revenue growth and the opportunity to retain dominant market share in providing business infrastructure for creators — a market that seems to be growing. Whether it stays independent and can thrive in the public markets sometime or whether it will find more success under the umbrella of a strategic acquirer remains to be seen. Right now the latter path is the more compelling one.
source https://techcrunch.com/2019/02/23/patreons-future-and-potential-exits/
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Patreon’s future and potential exits
Through the Extra Crunch EC-1 on Patreon, I dove into Patreon’s founding story, product roadmap, business model and metrics, underlying thesis, and competitive threats. The six-year-old company last valued around $450 million and likely to soon hit $1 billion is the leading platform for artists to run membership businesses for their superfans.
As a conclusion to my report, I have three core takeaways and some predictions on the possibility of an IPO or acquisition in the company’s future.
The future is bright for creators
First, the future is promising for independent content creators who are building engaged, passionate fanbases.
There is a surge of interest from the biggest social media platforms in creating more features to help them directly monetize their fans — with each trying to one-up the others. There are also a growing number of independent solutions for creators to use as well (Patreon and Memberful, Substack, Pico, etc.).
We live in an economy where a soaring number of people are self-employed, and the rise of more monetization tools for creators to earn a stable income will open the door to more people turning their creative talents into a part-time or full-time business pursuit.
Membership is a niche market and it’s unclear how big the opportunity is
Patreon’s play is to own a niche category of SMB who it recognizes has particular needs and provide them with the comprehensive suite of tools and services they need to manage their businesses. A large portion of creators’ incomes will need to go to Patreon for it to someday earn billions of dollars in annual revenue.
The market for content creators to build membership businesses appears to be growing, however, membership will be only one piece of the fan-to-creator monetization wave. The number of creators who are a fit for the membership business model and could generate $1,000-500,000 per month through Patreon (its target customer profile) is likely measured in the tens of thousands or low hundreds of thousands right now, rather than in the millions.
To get a sense of the revenue math here, Patreon will generate about $35 million this year from the 5,000-6,000 creators who fit its target customer profile; if you believe this market is expanding at a fast clip, capturing 10% of the revenue (Patreon’s current commission) from 20,000 such creators could bring in $140 million. And that’s without factoring in the potential success of Patreon implementing premium pricing options, which is a high priority. If Patreon can increase its commission from 10% to 15%, it would need around 47,500 creators in the $1,000-$500,000/month range (9.5x its current number) to reach $500 million in revenue from them.
There is a compelling opportunity for a company to provide the dominant business hub for creators, with tools to manage their fan (i.e. customer) relationships across platforms and to manage back-office logistics. At a certain point it taps out though.
That’s one of the reasons why Patreon’s vision includes extending into areas like business loans and healthcare. For companies targeting small and medium businesses like Shopify, Salesforce and Dropbox, there is so much more growth tied to their core products that there is no need for them to consider such unrelated offerings as business loans. Patreon has to both expand its market share and also expand the services it offers to those customers if it wants to reach massive scale.
Patreon faces serious competition but is evolving in the right direction
Patreon is the leading contender in this market, and there’s a role for an independent player even if Facebook, YouTube, and other distribution platforms push directly competing functionality. Patreon will need to make three important changes to compete effectively: more aggressively segment its customers, make the consumer-facing side of its platform more customizable by creators, and build out more lightweight talent management services.
What’s next for Patreon?
Having raised over $100 million in funding over the last six years, what is the path to a liquidity event for investors and employees?
In a worst case scenario, it is unlikely the company would go out of business even if it fell into disarray because it would be strategic for several large companies to takeover at a discount. Patreon may be on the path to IPO (as CEO Jack Conte hopes), but I find it more likely that the company gets acquired sometime in the next couple years.
Path to IPO?
If a public offering is in Patreon’s future, it’s several years out. It now defines itself as a SaaS company and has a plan to earn a higher blended commission on the sales of its customers through premium pricing options. It is a frequently misunderstood company, however, and needs to prove that a big market exists for mid-tail creators building membership businesses.
According to a summary by Spark Capital’s Alex Clayton, SaaS companies who went public in 2018 typically:
had $100-200 million in revenue over the prior twelve months,
were 14 years old,
had an average year-over-year revenue growth rate of ~40%,
earned 90% of revenue from subscriptions,
had a median gross margin of 73%,
ranged from roughly 500 to 2500 employees,
had a raised a median of $300 million in VC funding,
and IPO’d with a median market cap of $2 billion
Public market companies to benchmark it against will be Shopify (as SaaS infrastructure for small businesses selling to, and managing payments from, consumers) and Zuora (Patreon can be viewed as a media-specific SMB alternative to Zuora’s “Subscription Relationship Management” system). Compared to Shopify, whose market of SMB e-commerce businesses globally is easily understood to be enormous, Patreon would face more skepticism from public investors about the market size of mid-tail content creators.
Patreon’s gross margins can’t be much more than 50% given that almost half of revenue is going toward payment processing. Patreon mirrors Shopify’s topline revenue growth in the run up to its 2015 IPO: Shopify reported $23.7 million for 2012, $50.3 million for 2013, $105 million for 2014 and I estimate Patreon brought in $15 million for 2017, $30 million for 2018, and will hit $55 million for 2019. Most of Shopify’s revenue came from subscriptions, however, with only 37% coming from the “merchant solutions” services where Shopify had to pay out payment processing fees. Patreon’s revenue net of payment processing fees is closer to $7.5 million for 2017, $15 million for 2018, and $27 million (predicted) for 2019.
There’s a lot of capital chasing late-stage startups right now. How long that remains the case is unknown, but Patreon can likely raise the funding to operate unprofitably a few more years — getting topline revenue closer to $150-200 million, proving creators will adopt premium pricing, and showcasing its ability to compete with Facebook and YouTube in a growing market. In that case, it could become a strong IPO candidate.
The acquisition route
The other scenario, of course, is that a larger company buys Patreon. In particular, one of the large social media platforms building directly competitive features may decide it is easier to buy their expansion into membership than build it from scratch. Patreon is the dominant platform without any noteworthy direct competitor among independent companies, so acquiring it would immediately put the parent company in a market-leading position. Competing social platforms wouldn’t have another large Patreon-like startup to acquire in response.
There are three companies that jump out as both the most likely acquirers. Each of these M&A scenarios would be mutually beneficial: advancing Patreon’s mission and providing strategic value to the parent. The first two companies are probably obvious, but the last one may be less known to TechCrunch readers.
Facebook
I highlighted Facebook as the top competitive threat to Patreon. This is also why it’s a natural acquirer. Patreon would bring fan relationship management to the Facebook ecosystem and particularly the company’s Creator App with CRM and analytics specifically fit for creators’ needs. It would also bring a stable of 130,000 creators of all types to make Facebook the primary infrastructure through which they engage their core fans.
Facebook is prioritizing human relationships more and clickbait content less. A natural replacement for the flood of news articles and viral videos is deeper engagement with the creators that Facebook users care the most about.
Since the annual churn rate of Patreon creators who earn $500 per month or more is under 1%, the ~9,200 creators who fit that category would likely stick around as Patreon’s infrastructure integrates with Facebook’s; the vast majority probably already have Facebook pages and possibly use the Creator App.
Facebook’s data on who fans are, what they like, and who their friends are is unrivalled. The insights Facebook could provide Patreon’s creators on their fans could help them substantially grow their number of patrons and build stronger relationships with them.
Like all major social media platforms, Facebook has partnership teams vying to get major celebrities to use its products. Patreon could lock the mid-tail of smaller (but still established) creators into its ecosystem, which means more consumer engagement, more time well spent, and more revenue through both ads and fan-to-creator transactions. Owning and integrating Patreon could have a much bigger financial benefit than solely revenue from the core Patreon product.
As a Facebook subsidiary, Patreon would stick more closely to being a software solution; it wouldn’t develop as robust of a creator support staff and the vision that it may expand to offer business loans and health insurance to creators would almost surely be cut. Facebook would also probably discontinue supporting the roughly 23% of Patreon creators who make not-safe-for-work (NSFW) content.
Given Patreon’s mission to help creators get paid, it may make a bigger impact as part of Facebook nonetheless. Facebook’s ecosystem of apps is where creators and their fans already are. Tens of thousands of creators could start using Patreon’s CRM infrastructure overnight and activating fan memberships to earn stable income.
A Facebook-Patreon deal could happen at any point. I think a deal could just as likely happen in a few months as in a few years. The key will be Facebook’s business strategy: does it want to build serious infrastructure for creators? And does it believe paywalled access to some content and groups fits the future of Facebook? The company is experimenting with both of those right now, but doesn’t appear to be committed as of yet.
YouTube
The other most likely acquirer is Google-owned YouTube. Patreon was birthed by a YouTuber to support himself and fellow creators after their AdSense income dropped substantially. YouTube is becoming a direct competitor through YouTube Memberships and merchandise integrations.
If Patreon shows initial success in getting creators to adopt premium pricing tiers and YouTube sees a strong response to the membership functionality it has rolled out, it’s hard to imagine YouTube not making a play to acquire Patreon and make membership a priority in product development. This would create a whole new market for it to dominate, making money by selling business features to creators and encouraging fan-to-creator payments to happen through its platform.
In the meantime, it seems that YouTube is still searching for an answer to whether membership fits within its scope. It previously removed the ability for creators to paywall some videos and it could view fan-to-creator monetization efforts as a distraction from its dominance as an advertising platform and its growing strength in streaming TV online (through the popular $40/month YouTube TV subscription).
YouTube is also a less compelling acquirer than Facebook because the majority of Patreon’s creators don’t have a place on YouTube since they don’t produce video content (as least as their primary content type). Unless YouTube expands its platform to support podcasts and still images as well, it would be paying a premium to acquire the subset of Patreon creators that it wants. Moreover, as much as a quarter of those may be creators of NSFW content that YouTube prohibits.
YouTube is the potential Patreon acquirer people immediately point to, but it’s not as tight of a fit as Facebook would be…or as Endeavor would be.
Endeavor
The third scenario is that a major company in the entertainment and talent representation sphere sees acquiring Patreon as a strategic play to expand into a whole new category of talent representation with a technology-first approach. There is only one contender here: Endeavor, the $6.3 billion holding company led by Ari Emanuel and Patrick Whitesell that is backed by Silver Lake, Softbank, Fidelity, and Singapore’s GIC and has been on an acquisition spree.
This pairing shows promise. Facebook and YouTube are the most likely companies to acquire Patreon, but Endeavor may be the company best fit to acquire it.
Endeavor is an ecosystem of companies — with the world’s top talent agency WME-IMG at the center — that can each integrate with each other in different ways to collectively become a driving force in global entertainment, sports and fashion. Among the 25+ companies it has bought are sports leagues like the UFC (for $4 billion) and the video streaming infrastructure startup NeuLion (for $250 million). In September, it launched a division, Endeavor Audio, to develop, finance and market podcasts.
Endeavor wants to leverage its talent and evolve its revenue model toward scalable businesses. In 2015, Emanuel said revenue was 60% from representation and 40% from “the ownership of assets” but quickly shifting; last year Variety noted the revenue split as 50/50.
In alignment with Patreon, Endeavor is a big company centered on guiding the business activities of all types of artists and helping them build out (and maximize) new revenue streams. When you hear Emanuel and Whitesell, they reiterate the same talking points that Patreon CEO Jack Conte does: artists are now multifaceted, and not stuck to one activity. They are building their own businesses and don’t want to be beholden to distribution platforms. Patreon could thrive under Endeavor given their alignment of values and mission. Endeavor would want Patreon to grow in line with Conte’s vision, without fearing that it would cannibalize ad revenue (a concern Facebook and YouTube would both have).
In a June interview, Whitesell noted that Endeavor’s M&A is targeted at companies that either expand their existing businesses or ones where they can uniquely leverage their existing businesses to grow much faster than they otherwise could. Patreon fits both conditions.
Patreon would be the scalable asset that plugs the mid-tail of creators into the Endeavor ecosystem. Whereas WME-IMG is high-touch relationship management with a little bit of tech, Patreon is a tech company with a layer of talent relationship management. Patreon can serve tens of thousands of money-making creators at scale. Endeavor can bring its talent expertise to help Patreon provide better service to creators; Patreon would bring technology expertise to help Endeavor’s traditional talent representation businesses better analyze clients’ fanbases and build direct fan-to-creator revenue streams for clients.
If there’s opportunity to eventually expand the membership business model among the top tiers of creators using Patreon.com or Memberful (which Conte hinted at in our interviews), Endeavor could facilitate the initial experiments with major VIPs. If memberships are shown to make more money for top artists, that means more money in the pockets of their agents at WME-IMG and for Endeavor overall, so incentives are aligned.
Endeavor would also rid Patreon of the “starving artist” brand that still accompanies it and could open a lot of doors in for Patreon creators whose careers are gaining momentum. Perhaps other Endeavor companies could access Patreon data to identify specific creators fit for other opportunities.
An Endeavor-Patreon deal would need to occur before Patreon’s valuation gets too high. Endeavor doesn’t have tens of billions in cash sitting on its balance sheet like Google and Facebook do. Endeavor can’t use much debt to buy Patreon either: its leverage ratio is already high, resulting in Moody’s putting its credit rating under review for downgrade in December. Endeavor has repeatedly raised more equity funding though and is likely to do so again; it canceled a $400M investment from the Saudi government at the last minute in October due to political concerns but is likely pitching other investors to take its place.
Patreon has strong revenue growth and the opportunity to retain dominant market share in providing business infrastructure for creators — a market that seems to be growing. Whether it stays independent and can thrive in the public markets sometime or whether it will find more success under the umbrella of a strategic acquirer remains to be seen. Right now the latter path is the more compelling one.
Via Eric Peckham https://techcrunch.com
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Substack Mastery Book: Chapter 15
Why and How to Integrate Substack with Patreon for Compelling Reasons Based on Experience and Observations of Bestselling Freelance Writers and High Earning Content Entrepreneurs I have a deep appreciation for Substack, which is why I wrote this Substack Mastery book. But before discovering Substack, I had already been using Patreon for quite some time, finding it incredibly versatile for…
#business#Content marketing for creators#grow your audience on Substack#Integrating Substack and Patreon#Monetize your writing on Substack and Patreon#Patreon#Patreon for content creators#Patreon for writers#Self Improvement#stories#substack#Substack content strategy#Substack monetization tips#Substack newsletter growth#Substack vs Patreon#technology#writers#writing#writingcommunity
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Episode 546 - Rian Hughes
Writer, graphic designer, typographer, illustrator, comics writer/artist, and photographer Rian Hughes rejoins the show to celebrate the US release of his fantastic novel, The Black Locomotive (Pan Macmillan). We talk about how he wanted to follow up 2020's XX with something more plot-driven & less philosophical and wound up celebrating his love affair with London while getting in touch with his inner JG Ballard. We get into his integration of prose, typography, and graphic design in the new book, what he's learned about writing (and the new novel he's working on), the nature of font-design (and the real difference between sans-serif & serif fonts), and what he thinks about AI image-generation and its impact on creative fields (and what it says about popular tastes). We also discuss Rayguns & Rocketships, the recent book of his collection of vintage science fiction book cover art, the collector impulse and how to short-circuit it, the fun of writing the song for a fictional club of train aficionados & having his sister set it to music (and then hearing it remixed by Scott Hoffman), his fear of accidentally kicking off a flamewar among stream-train enthusiasts, and a LOT more. Follow Rian on Twitter and Instagram • More info at our site • Support The Virtual Memories Show via Patreon or Paypal and via our Substack
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