Patreon: How Freemium Is Working For Games Journalists

Games journalism in a more traditional form has reached something of a financial crisis point. The collapse of web advertising revenues, inflationary pressures in the wider economy and the continued circumvention of the major sites in favour of powerful new channels (Youtube almost literally being one of those channels), has had a serious effect on the industry.

In the past year alone, dozens of journalists have traded the insecurity of games journalism for the security of work within gaming related industries. Long serving publications such as Computer and Video Games have closed, while newer digital sites like Joystiq have felt the fall of the executioner’s axe in the past 12 months.

Yet as we say that, the past year has seen the rise of a service that seems to offer a lifeline for writers. Crowdfunding subscription service Patreon has grown significantly over the past two years and, importantly for the industry, has helped a number of journalists sustainably fund seemingly unsustainable niche projects continuously and successfully.

And the reason why it has done so well is that it has offered journalists their first real opportunity to intelligently make money from a free service. Patreon works well for games journalists because it opens them up to a world of money making freedom that many game developers, particularly in mobile, have entered in the past few years. The evidence I’ve gathered below hopefully sheds light on how it has worked for them and why it might be worth more content creators considering it.

“Well in theory it works…”

Before I dive into the numbers, I wanted to slide you through a bit of theory to help ground you in my thinking. In particular, I want to hand hold you through the basic principles that game developers follow when monetising using a free model and why journalists, theoretically, are well placed to exploit it too.

If I was to describe how the free model has worked well for most mobile gaming companies, I’d say its success has been based on four principal pillars. They are:

Lower the barrier to entry as far as possible – By trading off an upfront payment for a free ride, developers have acknowledged that they can build a big audience and encourage sharing to grow the audience further.

Gain value AFTER the download – At the same time, developers strive to gain value from free users after the event. It could be through advertising, encouraging sharing, getting a review or paying, but the model only works if someone pays for it in the end.

Accept that only a handful will ever pay in cash – Even though you’ll have a big audience, only a small percentage will ever cough up much cash. As Eric Seufert said on MobileDevMemo, low conversion from download to paying customer is a feature of the free model across all sectors; meaning that usually only 3-5% will ever spend in a free service

But those who do pay love what you do – This is really important. Despite the fact only a few will ever pay, those who do tend to be happy to pay are usually happy to pay lots (if not continuously). Some in the gaming sector disparagingly and disgracefully call them whales, but Nicholas Lovell in The Curve terms them more accurately and fairly as super fans. Because, ultimately, these people love what you do and are willing to pay more to support you doing more in the future.

So, if you look at everything we’ve learnt so far, you can see that if you can build a big audience of people and come up with stuff that 3-5% of your user base will pay for, then you can make decent returns as long as you keep the service up.

This model should be perfect for games journalists then. Content has been distributed for free for years, meaning there is a large audience in general for gaming content. Social media, and particularly Twitter, has helped writers, video producers and podcasters to build up an audience to call their own who they can directly market to. And the mentality and professional approach of most of those creators to produce work continually, and communicate it effectively, makes them suited to providing an on-going service of stuff to that minority of hard-core fans.

The problem thus far then has been how to monetise that audience. Web advertising in the past few years has, truth be told, sucked. And other routes, such as merchandising, is hard going for someone not familiar with how it works. Therefore, journalists have needed a platform flexible enough to allow them to get their fans to pay for them.

Patreon and paying out

Which is where Patreon has jumped in very usefully for creators who have an audience and a service. Acting partly as a billing platform and as a marketable landing page, it has allowed a wide variety of creative types within the space to use the free model to fund their ambitions.

To show this, I’ve taken a look at ten Patreons created by games journalists. Examining their social media follower numbers and their revenues, I believe that there is enough here to suggest that Patreon has an enormous amount of value for journalists considering side projects.

Before I reveal the figures, a little bit of housekeeping is necessary. First, I have simply picked a spread of Patreons that I know about and I am aware that the sample size I’ve selected is small (not everyone has a Patreon, contrary to Twitter snark). Second, I know that using Twitter follower counts to gauge audience base is fraught with potential problems, meaning it is a very rough measure of overall user base. Third, all revenue figures assume that Patreon have taken an 8% cut for providing the service and dealing with credit card fees. And fourth, there is deliberately no comment here on the motivations behind each Patreon featured. This isn’t a bun fight or an attempt to pick winners and losers; it’s meant to be a detached look at the business model and that’s the spirit it should be taken in.

Right, so on with the show. Taking a look at the Patreons of Matt Lees, Cara Ellison, Lana Polansky, Critical Distance, Kinda Funny Games, GeekDad, Laura Kate Dale, Arcade Review, VideoBrains and Sirlin, I wanted to find out how much each of these diverse groups were making, what they make on average from their subscribers and what percentage of their audience coughed up for cash. In doing so, I hoped to identify whether Patreon was helping them monetise their broader audience.

In the first instance, I jimmied together subscriber numbers and monthly pay out figures from their Patreon pages and shuffled things around a bit. Ordering them from top to bottom by pay outs, you get the following:

Patreon Monthly Revenue Patreon Subs
Kinda Funny Games $22,353 3509
Matt Lees $3,231 712
Cara Ellison $2,735 581
Critical Distance $2,048 266
Sirlin $745 47
Laura Kate Dale $742 189
Lana Polansky $725 161
Arcade Review $611 56
GeekDad $350 51
Videobrains $120 19

Figures correct as of 27/01/2015

As you can see, the three biggest audiences pull the top three slots in the moolah making stakes. The Kinda Funny Games team, a video collective that broke away from IGN, are splitting a very healthy $22,253 between four people, while Cara and Matt are each earning well (in games journalist terms, not in “I wear an important suit, do business deals and cry myself to sleep every night” terms) from their efforts.

But even though they, somewhat predictable dominate takings, we see decent figures across the group. Sirlin, for example, is making $745 off 47 subs, while VideoBrains have 19 people to thank for a potential annual addition of $1440 per year to the pizza fund. Though those amounts of money look small, in the context of the audience size and the nature of the ventures being funded, the returns really aren’t that bad.

That’s clear when we take a look at the average amount that subscribers to each page are coughing up. In fact, some pages are doing a lot better than you’d think considering their size.

Patreon Monthly Revenue Post Cut Average Revenue Per Subscriber
Sirlin $685.40 $14.58
Arcade Review $562.12 $10.04
Critical Distance $1,884.16 $7.08
GeekDad $322.00 $6.31
Kinda Funny Games $20,564.76 $5.86
Video Brains $110.40 $5.81
Cara Ellison $2,516.20 $4.33
Matt Lees $2,972.52 $4.17
Lana Polansky $667.00 $4.14
Laura Kate Dale $682.64 $3.61

Figures correct as of 27/01/2015

Despite their relatively small subscriber sizes (or possibly a result of their small audiences), the best average monetisers are actually Sirlin, Arcade Review and Critical Distance. By offering very clear services to a niche audience, and in some instances creating a physical product to offer something more to subscribers, they’ve been able to generate real value in their service.

And as for the remainder of the list, it is worth remembering that even the lowest figure of $3.61 from a single subscriber is incredibly difficult to achieve elsewhere. If we think that cost per thousand impressions banner advertising is rarely worth above $3 for a basic banner unit, you’d need a page stacked with banner ads and hundreds of viewers a day to begin getting close to those revenues.

In short, these Patreons are benefitting from subscribers who have the financial appearance of the so called “super fans”. And the reason why we know this is probably true is when we take a look at what percentage of audience size subscribes. Taking a look at Twitter followers to Patreon subscribers, we see the following figures showing percentage of audience as subs:

Patreon Twitter Followers Patreon Subs % of followers as subs
Kinda Funny Games 23744 3509 14.78%
Videobrains 175 19 10.86%
Critical Distance 2600 266 10.23%
Arcade Review 851 56 6.58%
Lana Polansky 3896 161 4.13%
Matt Lees 18482 712 3.85%
Sirlin 1292 47 3.64%
Cara Ellison 18482 581 3.14%
Laura Kate Dale 6044 189 3.13%
GeekDad 20621 51 0.25%

Figures correct as of 27/01/2015

Though I appreciate these results are definitely imperfect, it’s interesting to note that seven out of the ten Patreons have a sub 7% conversion rate (with five within the 3-5% range). And while some have inflated figures, they are all notably brands or platforms rather than individuals. When you look at the number of followers the founders of Kinda Funny Games have individually, it is in excess of 300,000 rather than 23,744 – making for a sub 1.5% follower to subscriber conversion rate; something I’d hazard a guess would happen if we looked at total followers of the organisers of Videobrains and Critical Distance.

Whether intentionally or not, the success of these Patreons follow closely the pattern seen in other industries using a free model. Monetising a small percentage of their large audience base more effectively than advertising alone ever could, these businesses, groups and individuals have turned the low barrier of entry to their monetary and professional advantage.

Patreon of the games journalism arts?

So is Patreon great for everyone? The answer is, undoubtedly, no. Despite all the pros for using it above, not everyone is placed to take advantage of it. Using the methods above I used for calculation, I’d estimate that I’d probably top out at $500 a month if I was lucky. With more work from clients than I can manage and too much ghost writing under my belt, chances are I don’t have the audience, the idea or the time to deliver a worthwhile experience to backers.

But if you do have a big audience, are creating something cool and are thinking about Patreon then it is definitely worth a punt. The model is supporting everything from semi-regular posts on the web, event organising, print runs of arcade zines and more, so you might be able to make it work. But if you are to give it a go, the top tips I’d recommend would be:

Make sure you have a big enough audience to support you– Though the Twitter numbers aren’t wholly accurate, realistically you need a network of thousands to get you enough subscribers. So whether you form an entity with others to push it, work Twitter like mad to get to 10,000+ followers or pay to market the Patreon, get that audience up.

Let your hook be as niche as you want it to be – It might seem counterintuitive, but the idea of this volume game is to find the minority mad enough to love everything you produce. Cara Ellison’s embedded series mixes long form travelogue with game development. Matt Lees video output ranges from XCOM Let’s plays to cooking videos. And Lana Polansky’s pitch includes granola for higher tier backers. Your backers love what you do, so feel free to go a bit crazy.

Aim high with price tiers – The reason Sirlin and Arcade Review monetise the most effectively is because they asked for the most money each month. It might seem grabby to ask for lots, but the moral issues surrounding free to play gaming around addiction, exploitation of children and unfriendly monetization techniques are much less likely to apply to games journalists advertising to paying adults. So consider tiers of $20 upwards; no-one has to choose to pay that much, after all.

And if Patreon isn’t your cup of tea, then perhaps the more positive message to take from this is that there is a way to make money in the industry still. No, advertising won’t cut the mustard alone anymore. But if you can write and sell books to your readers, create films, come up with apps, organise events or whatever, then you can find a way to make both your super fans happy and your wallet as well.

Despite what many have said, myself very much included, Patreon has opened the door to making money in more inventive ways than ever for games journalists, within the platform or outside of it. It’s now up to you to see if you can benefit from it as a content creator.

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