The point of Patreon isn't how many people earn a full-time living, it's how much of the money from art goes to artists

This week's Patreon PR fumble (the company changed what kinds of support are permissible and the way fees are paid and then said it was good for creators, when it clearly wasn't) prompted people to take a closer look at Patreon and its business.

That's good news, because Patreon has the power to behave in pretty exploitative ways towards the artists that use the platform, so they should be scrutinized carefully so that creators understand the bargain they're making when they sign up for the service.

But some of the criticism is badly misplaced. In No one makes a living on Patreon on The Outline, Brent Knepper argues that because only a very small number of the users of the service earn a real, full-time living from their art, the service is a kind of shell-game that promises financial independence and delivers hobby income.

That's a fundamental misunderstanding of how the economics of art works. Art is an irrational market; artists make art without regard to the laws of supply and demand. There are -- and always have been -- more people who'd like to make a living in the arts than the arts will sustain. That means that artists produce material without any rational expectation of any meaningful return on their investments, and this puts them at great risk from the distributors (retailers, platforms) and financiers (publishers/studios/labels, ad networks, etc) who have historically been key to connecting them to their audiences.

What's more, there's returns on scale in both financing and distributing, which is why (for example), we've ended up with five publishers, one major online bookseller, and one major brick-and-mortal bookseller. This anti-competitive concentration in both sectors has the effect of eroding the share of income from successful work that goes to the creator, moving an ever-larger slice to the other parts of the art industry. In 1999, first novels were selling to science fiction publishers for about $7,000 (about $10,200 in 2017 dollars). Today, first novels are selling for...about $7,000. And yet, if anything, more writers are producing first novels than in 1999.

In these irrational markets, the ability of a creator to command a larger share of the money created by their work depends on leverage, not market forces: anti-trust enforcement, creator's unions (there's a reason screenwriters get paid a lot more than book writers -- they're unionized), fame sufficient to cause the other industrial players into a bidding war for your product, or the ability to sidestep the process altogether.

(There is also direct arts funding by governments, which is an amazing idea and the hallmark of a civilized society)

Patreon represents a kind of tinkering with the margins of the copyright system, a way to let creators bypass large swathes of the industry and collect payments directly from their audiences. It doesn't particularly help them find an audience, nor make work for that audience -- but it does mean that where there is a willingness on the part of the audience to pay for the pleasure of a work, a much larger share of the income generated by the work goes to the artist.

This is the way to measure the success of a copyright system: not in overall dollars generated (we would prefer a movie industry with a thousand movies that turn over $10B to a movie industry that made only one movie that generated $11B); not in the proportion of artists who get a fulltime living from it, divided by the number of people who tried (because that number will always be effectively 0); but by how much diversity in expression in artists, works and audiences the system generates, and how much of the money from that diversity goes directly to the creators.

The right way to look at a 2% success rate in delivering a full-time living to creators on Patreon is to first compare that number to the percentage of people who, for example, send a demo to a record label and then get to quit their jobs to be full-time musicians (that's a lot less than 2%). The right way to look at the remaining 98% of Patreon artists who earn some money from the service is to compare how much money they get, compared to how much money they'd get if they had to rely on more indirect (and less artist-friendly) sources like ad brokers and traditional retail channels.

On both of these metrics, Patreon is performing beautifully. On these metrics, Patreon is a fucking godsend to artists.

Yes, they did something stupid with their payment processing this week. Yes, that exposes how dangerous it is to rely on a company for your artistic living. But the measure of Patreon's success isn't creating an army of full-time creators with middle-class incomes where none existed before: it's ensuring that the money generated by art goes primarily to artists.