Jun 22, 2020
When Cable TV Finally Dies, Patreon Will Take Its Place
In an entertainment landscape dominated by independent content creators, micro-subscriptions are the future
Depending on who you ask, cable television is either dead or dying. Personally, I’ve never lived in a house with a cable subscription. I don’t even own a TV — it’s just not where I get my entertainment.
Why is cable falling behind? Because the internet has democratized and fragmented entertainment. Network programming is home to large-scale, big-budget, mass-appeal content. But online, there are a million cheaper, more innovative, and more niche alternatives to what’s on TV. People are flocking to content produced on a smaller scale for smaller audiences, on platforms that can take risks, like YouTube, Amazon, and even Facebook. Podcast networks like Radiotopia and Gimlet, funding platforms like Kickstarter and Indiegogo, and publishing sites like Medium are playing this same smaller-scale distribution role in other creative industries.
But all of these platforms are supported either by ad revenue, membership fees, or some combination. Translation: they’re all still using the cable model. If the cable industry is in decline, it stands to reason that its revenue model may not last much longer either, again, due to the internet. There are three main reasons for this:
1. The proliferation of free content
Why pay for Netflix when 300 hours of video are uploaded to YouTube every minute? Sure, no YouTuber is going to make Stranger Things on their own, and there will always be a place for big budget productions like that. But generally speaking, there is an endless supply of free entertainment on the internet, and people may start Kondo-ing their subscription services as fees rise.
2. Increasing ad blindness
The main downside of all that free content is that it’s generally supported by ads. Get enough eyeballs on anything and someone will pay to put their message next to it. But people are getting very good at tuning out advertising, which I’ve touched on before. When I play a YouTube video, I instinctively move the mouse to the spot where I know that skip button will appear after five seconds (if I’m lucky and the video doesn’t have an unskippable ad). When I scroll past an ad on Instagram, it doesn’t even register. I’m a podcast ad-skipping ninja. But it sure would be nice to avoid all that.
3. Desire to support creators
What do you get when you pair endless free content with a hatred of ads? The answer seems to be a growing desire to directly support independent content creators. This is augmented by the ability of individuals to build intensely personal connections with their fans in a way that mass media content cannot. In fact, Gen Z and Gen Alpha are being raised in a world of people who rose to fame outside the traditional ways. Their celebrities got their start on YouTube, Vine, Instagram, and Tik Tok. But these new media pioneers have limited options for earning a living directly from their fans.
With financial and cultural forces pushing us away from both bundled service subscriptions and advertising, the next logical step is a model that allows fans to support content creators directly.
Enter Patreon
Patreon has created a brand-new revenue stream for Internet creatives that isn’t based on selling ads or memberships. Instead, fans pay their favorite content creators directly and individually. This makes perfect sense as a response to the personalization of entertainment. And what creative person wouldn’t choose to be supported by fans rather than advertisers? Not only does it feel good, it removes the potential for conflicts of interest. Podcasters, artists, YouTubers, musicians, animators… creators of all sorts are starting to use Patreon to earn more from their work.
The micropayment system that Patreon is pioneering takes the subscription model to its logical extreme. And we’ve already seen one-to-one transactions like this take hold in other realms, most notably with Airbnb. Another example is Getaround, which lets people rent their vehicles out when they’re not using them. Just as we’ve seen an Airbnb-ification of various services, I expect we’ll see a Patreon-ification of entertainment. (Look no further than the porn industry, which often leads the way with new technology and already has its own Patreon in the form of OnlyFans.)
Patreon has a ways to go. Many people have never heard of it, and those who have either don’t really know what it is or don’t use it. For the sake of its own longevity, Patreon needs to stop putting the entire onus of attracting fans on its creators. It also needs to make the subscription process and the delivery of patron-only content a little more accessible to the average person.
Patreon could also stand to work out a good way to enable cross promotion amongst different creators. This is part of the reason that podcast networks have been so successful — podcasters can talk directly to their listeners about other podcasts on the network that they might like. The discovery process on Patreon is essentially nonexistent.
These issues can be resolved. But the biggest issue with micropayments is that they can still add up. Subscribe to just six $5/month Patreons, and your annual bill tops $350. Maybe this is just the cost of completely customizing your own entirely ad-free entertainment lineup, but Patreon can and should do more to keep patrons around as they subscribe to additional creators and their monthly bills increase — particularly since no one is spending their entire entertainment budget on individualized content (yet). Perhaps Patreon could scale their cut of subscription fees in proportion to the number of subscribers a creator has, allowing them to lower monthly fees without decreasing creators’ earnings.
Or maybe Patreon will start packaging up related content from different creators for a single fee. That’s right — a bundle. This model worked for cable television for a reason! Perhaps we’ll just end up right back where we started. But one thing’s for sure: we won’t all be consuming the same thing.
Find me at www.ericdalecreative.com.
