Cancel the Brand Deal. Take the Fan Deal.

Patreon just hit a staggering $4b valuation, Substack is now valued at $650m, and Cameo at a billion. The one thing these platforms have in common? They allow fans to pay their favorite creators directly. As Patreon CEO Jack Conte said, we’re entering a “Second Renaissance”.

IN TODAY’S ISSUE:

• YouTube Wants You To Pay

• Clubhouse Adds Monetization

• Why Patreon’s $4 Billion Valuation Matters

YouTube Wants You To Pay

Viewers spent more money on YouTube than any other app.

In the first three months of 2021, consumers spent more money on YouTube than any other app, according to a report by AppAnnie. Let that sink in.

When we think YouTube, we don’t go looking for our credit cards.

So what is everyone paying for?

• YouTube Premium → Ad-free viewing (~$12 / month and unknown percentage of subscription fees shared with creators).

• Channel Memberships → Exclusive content and other creator-defined perks (Tiered pricing starts at $4.99 and YouTube takes 30%).

• Super Chat & Stickers → Allows fans to pin their comment or custom animated sticker at the top of a live chat. (Creators set the price and YouTube takes 30%)

• YouTube Service Subscriptions → YouTube TV, YouTube Music, etc. (Revenue not shared with creators).

KEY TAKEAWAYS

From a creator’s perspective, more time and money spent on YouTube is a good thing. The only downside is the sizable 30% cut that YouTube takes.

Clubhouse Adds Monetization

And creators keep 100% of it.

Clubhouse has made its first entrance into creator monetization by rolling out ‘tips’. Fans can now send creators direct payments with 100% going directly to the creator and a small processing fee charged to the fan. As far as we know this type of platform-creator split is a one of its kind.

Live audio could prove to be the lowest lift storytelling format with the highest margins. No cameras, no editing, just a phone and your voice.

Here are some ways creators could use the new feature :

• Comedy → It won’t be long before comedians host live shows where fans pay to be in the hot seat and get roasted live.

• Education → Top creators can open up live show Q&A’s and prioritize questions based on tips.

• Non-profit → Creators and charities can band together to raise money through the app.

Before rolling out ‘tips,’ Clubhouse began courting creators with their Creator Accelerator, a program that will support 20 promising creators with guidance and financial aid to supercharge their growth.

KEY TAKEAWAYS

Clubhouse is fighting to defend its lead in the live-audio space against tech giants like Facebook and Twitter. They’ll win by continuing to invest in creators like they are now. A 100-0 split in favor of the creator will be hard to beat. If you’re an audio creator, or someone who can hold court in a Zoom conference call, it might be a good time to start a show on Clubhouse. The bidding war for the best programming on the internet is coming to live audio. 

Why Patreon’s $4 Billion Valuation Matters

You can make a living as a creator with subscriptions

Patreon, the platform that allows fans to pay creators directly in exchange for exclusive content, just raised $155 million dollars valuing them at $4 Billion. 

The numbers are proof that the Creator Economy is booming. CEO Jack Conte explained on his YouTube channel that we’re in a “Second Renaissance”. The first time around a few wealthy patrons funded the world’s most prolific art that hangs in museums to this day. Now in 2021, Patreon is proving that instead of a select few, there are millions of patrons ready to support their favorite artists and creators.

If you’re a creator who relies on advertising and thinks your audience won’t pay, this valuation from Patreon should make you think again.

Here are two numbers to consider: 

• $82,000 / month → How much Cody Ko and Noel Miller earn from their 17k patrons of the TMG Podcast.

• 1,500 → The number of people paying $5 - $10 / month to support Andrew Callaghan’s new project after he mistakenly sold the rights to his hit YouTube show All Gas No Brakes and had to start again from scratch.

KEY TAKEAWAYS

Advertising will always be important for creators, but fan-to-creator payments are an increasingly appetizing option. They allow creators to have a more intimate relationship with their fans and diversifying their revenue streams.

🔥 In Other News

• Valkyrae has been named a co-owner of the e-sports company, 100Thieves.

• As people prepare for post-Covid life, creators like DudePerfect are expanding their fan relationships to IRL with live tours.

• All roads lead to YouTube