Why Choose the Subscription Model of Crowdfunding?

This model offers many advantages, but it remains less popular amongst Canadian film/video/gaming creators than typical donation-based platforms.

As we mentioned in our article Crowdfunding Models in Canada, subscription-based crowdfunding provides steady stream of income, but it requires the creator to produce a regular, steady volume of content (e.g. podcasts, YouTube videos, etc.).

How does the subscription model work?

While it may vary from site to site, on the whole the subscription model functions as follows.

The creator, that is to say musician, YouTuber, web comic, writer, blogger, independent gamer, video producer, author, podcaster, animator, artist and/or photographer – really anyone creating content on a regular basis, creates a project page to showcase their work and begin to promote the page to their fans.

Patrons or subscribers can visit the project page and choose to pledge towards a creator’s work. The pledge, or per content release fee, is the amount the patron or subscriber commits to contributing per new piece of content issued (e.g. new music video, webisode, recipe, blog post etc.). This pledge can be capped monthly. The platform takes a fee of every exchange (Patreon’s is approximately 8%).

As a patron or subscriber, you may enjoy certain privileges such as the ability to post questions and comments to a creator’s page. Creators may choose to reward their patrons and subscribers with perks such as limited edition content, tutorials and the chance to interact with the creators themselves in a Google Hangout for example.

A creator’s page serves to introduce the content they are creating and may also show the number of patrons they have secured and either what they earn per content release or per month.

Patreon

The leading platform of subscription-based crowdfunding is Patreon. Launched in May 2013, the platform has ssen important growth in the last years.

While the average pledge amount is $12, top creators have earned over $150,000 in 2016. The platform takes a fee of every exchange (5% commission on pledges, to which you have to add transaction fees).

Here's several Canadian creators using Patreon:

What does the subscription model mean for Canadian-based screen content creators?

Because of its emphasis on serialized or ongoing content creation, the subscription model seems to work especially well for web-series creators and YouTubers (who typically rely on ad revenue).

Is with other crowdfunding models, the subscription-based platforms will likely be most successful for creators who already have an established fan base or community to engage with meaningfully on an ongoing basis.

To use Patreon’s language, creators must access those supports that already “love them.”

What is clear, however, is that the subscription based model could represent a key breakthrough in terms of supporting emerging creators and storytellers in Canada with a more sustainable revenue model.

Industry & Market Trends | Veille stratégique

The Industry and Market Trends team is composed of Director Catherine Mathys, analysts Pierre Tanguay and Sabrina Dubé-Morneau, as well as editorial coordinator Laurianne Désormiers. Once a year, the team publishes a Trends Report that draws a portrait of the macro trends that are shaping today’s screen-based industries.

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