Facebook is gunning for creator-subscription service Patreon’s business—but on much less generous terms.
According to TechCrunch, a “policy document” shows that its Fan Subscriptions feature, which has only been made available to a tiny number of creators so far, shows that Facebook wants up to a full 30 per cent cut of subscription revenues (minus processing fees). That’s far less generous than Patreon, which takes a five per cent cut. Additionally, TechCrunch added, the payouts will be further reduced by the “15 to 30 per cent tax Apple and Google levy on iOS and Android in-app purchases.”
More troubling, Facebook wants the rights to all of a creators’ work if they sign up for Fan Subscriptions, TechCrunch wrote:
Facebook also reserves the right to offer free trials to subscriptions that won’t compensate creators. And Facebook demands a “non-exclusive, transferable, sub-licensable, royalty-free, worldwide licence to use” creators’ content and “This licence survives even if you stop using Fan Subscriptions.”
As the Verge noted, Facebook previously offered the service to “just 10 creators across the US and UK,” but began emailing offers to set up a $7-a-month per subscriber service to more select creators on Monday. For now, Facebook is foregoing its cut — likely as part of a plan to get creators in the door — but its terms allow the tech giant to take up to 30 per cent of all subscription revenues with just 30 days notice. And while Patreon and other similar services do also request licenses to use creators’ work, the Verge wrote, it’s typically for promotional purposes and said usually licenses expire when the service is no longer in use.
Facebook told TechCrunch that while the licence does include all of a creator’s content, it’s for purposes such as allowing them to create things like stickers that can be integrated into subscribers’ posts. At the end of the day, though, the licence grants Facebook the power to do pretty much whatever they want with said content in perpetuity.
According to creator terms provided to Gizmodo by The Hard Times founder Matt Saincome, Facebook also wants the right to give free or discounted trial subscriptions to users at their sole discretion, with the lost revenue not being paid out towards the creators.
Saincome, whose satirical website was among those impacted by changes to the Facebook News Feed algorithm that killed web traffic to many publishers, told the Verge he expected the company to lure in creators and then jack up their cut. He added, “It feels like they have no idea how much publishers distrust them. They just burned us! Why in the world would we build another audience there, ESPECIALLY if it includes money?”
Facebook told TechCrunch that it has not finalised the terms of the service, with 30 per cent being more of a ceiling. But that means it’s asking creators to start making revenue on their platform without any clear expectation of how much it will gobble up later.
Some big platforms do take larger cuts than Patreon, TechCrunch noted, like YouTube (30 per cent, but no fees) and streaming service Twitch.tv (a whopping 50 per cent). Facebook also has billions of users already integrated into its walled garden, which could conceivably allow creators to reach far larger audiences. Still, this seems like a raw deal, especially given that — as the Outline reported in 2017 — it’s already tough for many creatives to scrape by much income on Patreon’s more generous terms.
Facebook isn’t the only tech platform asking for a huge slice of the revenue generated by creators. Apple recently offered several major newspapers onerous terms on a planned news subscription service. In exchange for selling unlimited, multi-paper subscriptions to Apple News users at a planned bargain-basement price of $14 a month, Apple reportedly wanted half the resulting revenue and for publishers to split the rest based on readership.
Patreon itself angered its community in 2017, when it announced changes to its payment model that it quickly rolled back after pressure from users.