Crowdfunding is one of the areas fintech has quietly revolutionized in the last couple of years. According to the infographic from Carsurance, this funding practice is the third-most impactful trend in the financial services industry in 2018 – only next to AI-driven chatbots and P2P lending. Crowdfunding even beat Blockchain technology in terms of influence in that period.
YouTubers are some of the biggest beneficiaries of crowdfunding’s growth. Many creators are using Patreon, a fan membership website, to earn revenue from their content. Unlike other crowdfunding platforms, though, it does not require campaigns to have certain goals and time limits.
How Does It Work?
A YouTuber needs to create a Patreon account. The creator can promote it through their YouTube channel. If fans love their content, they can pledge money per month or per project or video in support of the creator.
The paying supporters, or patrons, can achieve different membership levels depending on the amount they give, earning them entitlement to certain rewards the YouTuber decides to offer.
Creators can provide patrons exclusive access to content, send invites to private YouTube live sessions, or express gratitude through shout-outs. The imagination is the only limit.
Of course, branding helps, but patience, perseverance, and reliability are the keys to success on Patreon.
Is It Legal?
The legality of this scheme is sometimes less controversial than its ethics. Many creators produce original content and use YouTube only as a launching pad for their careers to build some following.
However, some creators tend to utilize copyrighted material. They often get away with it by using the fair use doctrine, and YouTube usually can’t do anything as long as it is strictly observed.
The videos of creators who are blatantly or recklessly committing privacy are typically taken down upon the request of the content’s legal owner. But even when the pirated content of a creator is removed from YouTube, it may still exist on Patreon for the consumption of patrons.
How Successful Are Creators?
YouTubers use Patreon in the first place to maximize their profit, for many of them struggle to meet the video-sharing website’s monetization rules. After all, a creator’s channel must attract over 1,000 subscribers and have 4,000 public watch hours in 12 months in order to qualify for the YouTube Partner Program.
Clearly, new creators are at the disadvantage because they need to spend a lot of time and energy before making enough noise on YouTube to gain revenue streams at the onset of their careers.
Patreon offers a convenient solution to help YouTubers, especially the less established ones, get some financial boost from the supporters who believe in them.
Although many rights-holders cry foul because of such a “piracy” scheme, not all creators who use copyrighted material manage to convince supporters to pay.
Patrons, in general, demand a high level of quality from YouTubers. In the end, creators who are in the business of recycling content and offer no added value to fans are not incentivized whatsoever.
The rise of crowdfunding has certainly forced YouTube to rethink its policies to protect its own interests and those of legitimate owners of copyrighted content. While this fintech solution opens new doors to young creators, the Patreon community has its own natural way of rewarding talented YouTubers while punishing those who do not deserve attention, let alone funding.
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