jpmaggers
patreon
Potential Patreon Platform Problems
🕑 Added 2020-08-04 12:59:30 +0000 UTCHi everyone ^_^
I'm in the middle of writing the Weekly/Monthly Patreon update, however, there is some potentially troubling news I need to share with you all. If your'e in a rush, then skip to the end (I'll put a line there) to see the summery and my plans to deal with it.
So ...
Sadly, Patreon has recently lost a major legal battle that could see the business go bankrupt, which in turn is a major threat to the livelihood of a lot of adult creators.
The details of the matter are somewhat complex, but I'll do my best to go into them without presenting any bias. Effectively, Patreon began removing creators from the site who at the time had not breached the terms of service (which in these instances were later altered to allow the removal of these individuals).
Recently a creator named Owen Benjamin was removed from the site, and him and his followers explored their legal options against Patreon for doing so. They discovered that they could request arbitration sessions in California with Patreon under the terms of service. For each arbitration case (and each patron of the ex-creator would be able to file separately), Patreon must pay legal fees and up front $10k to the arbitrator to be held during the proceedings.
Patreon attempted to legally battle this, and mid-way through the case removed this arbitration clause from their terms of service. However, as the legal case to shoot down the allowance for arbitration was already in motion, and the grievance was before the change in terms of service, the judge found against Patreon (and strongly so - Patreon did a serious bad move by trying to change those terms mid legal case). Without going too much into the law, as Patreon is only the middle man for matching up these creators with their fans in payment contracts, this can be seen as cases of tortious interference when Patreon (an outside business) attempts to dissolve that contract. The law on tortious interference is rather set in stone and well established.
What this means is that Patreon will need to enter literally hundreds (if not thousands) of arbitration instances against ex-patrons of creators thrown off of the site. Each instance is rather costly, and because Patreon needs to cover this up-front bond and the legal fees will require a huge amount of usable capital. The problem is that Patreon doesn't really make that much money despite being considered within the Silicon Valley bubble, and like most businesses most of its capital is held in assets (like their building, stocks, etc). This could conceivably see the end of Patreon due to bankrupcy, or it being bought out by another major competitor such as Google or Facebook so they can add a crowdfunding wing to their digital empires.
News Article (there are few good sources at the moment) -> https://www.i24news.tv/en/news/international/americas/1596377657-court-rules-against-patreon-fan-funding-service-in-key-case-over-cancelled-comedian
---
In short, Patreon has legal issues that might bankrupt the business, leaving the future of the site and monetization for creators as rather uncertain.
So what does this mean for this Patreon Account? Well, it's possible that Patreon might suddenly be off the internet, or come under new management that removes adult creators. As such, I implore you all to keep track of my alternative web-presences, such as; my personal website (here), the TFGames forums (here), the F95zone forum (here), and the Foxtalestimes forum (here). You can also find me on the alternative monetization platform, SubscribeStar at -> https://subscribestar.adult/jpmaggers-games.
If Patreon were to fall, either suddenly or slowly, my plan is to convert fully over to SubscribeStar for monetization, creating all of the current tiers over here on Patreon over there. For patrons who currently are on the commission level tiers, I would also attempt to personally contact you to offer you the chance to grab those new SubscribeStar commission tiers first (as it's not your fault by any means if Patreon falls under). Until further notice though, I'm still more than happy to keep working here, these procedures/precautions are only a just-in-case matter.
Sorry for the wordy and sombre update, but thank you all for reading. Happy gaming ^_^
Comments
Prince Draco
The situation sucks, but I have no sympathy for whoever is in charge of Patreon. They did this to themselves, and forced arbitration agreements are awful.
Jpmaggers
Hi again Kazard :) That's entirely possible, but other sources have claimed differently, so I think it's still best to be safe as a creator and notify my patrons of the possibility I have to shift monetization platform at some point. 200 people would still be 2 million dollars in up front arbitration holdings, not to mention the legal costs associated with those cases. Further, whilst only around 200 people were the original attempts for arbitration, with the case loss making a pathway other big former creators on the platform are mobilizing their ex-patrons to follow suit and do the same. Not to mention that Patreon doesn't really make as much as people think, though it's been a while since I looked into that so it's harder to source, instead the mainly swell their business with venture capital which could dry out if risk is detected. I don't want Patreon to fall (though reforming to end the censorship purges would be preferable - have lost a lot of patrons due to those and other Patreon decisions), but there is a risk that it will, or that it will dramatically change in the face of these legal proceedings.
Kazard
There are less than 200 people involved in the arbitration cases, other legal experts have weighed in. This will be annoying to patreon but ultimately trivial
Jpmaggers
Hi Kazard ^_^ I'm no expert, so I can only go off of what I've seen and heard. To my understanding the issue isn't the lawsuit itself (though some level of damages may be applied against Patreon for changing the terms of service mid-way through the legal case and trying to use the new ToS as a defence). The bigger issue is that it opens them to individual arbitration cases for which they both have to pay the costs and front $10k for each instance (the $10k might likely come back to them afterwards but they still have to have that money to front). As there are many thousands of ex-users who could file for this arbitration process (including the ex-patrons of kicked adult content producers), the concern is that because Patreon doesn't have much in liquid assets it could be bankrupted by this sudden surge of arbitrations. Regardless of that though, adult content producers have always been in a risky position on the site. That's why having a back-up plan in place and letting you all know about it just seemed a sensible position to take for securing the project :) Hope that explains my understanding of the situation and my position a bit more ^_^
Kazard
The damages patreon can take are capped at 750k, which shouldn't be more than a drop in the bucket for a company like patreon
