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Crowdfunding a monthly income: an analysis of the membership platform Patreon

Author

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  • Tobias Regner

    () (FSU Jena)

Abstract

Membership platforms allow creators to crowdfund a monthly income, while campaigns on conventional reward crowdfunding portals aim to reach a specified funding target within a pre-set period. We study transaction-level data from Patreon, the biggest membership platform, to gain insights about behavioral patterns at this emerging type of crowdfunding. Our analysis shows that hundreds of creators crowdfund a sizable income (more than $2,500 monthly). We also find that measures of communication quality are determinants of project success, in line with the related literature. Funding dynamics - pledges as well as deletions - are heterogeneous across campaigns. Our analysis suggests that the option to delete the monthly pledge to a creator at any time serves as a feedback mechanism. We conclude that crowdfunding a monthly income offers the creative class a viable alternative to advertising-based business models.

Suggested Citation

  • Tobias Regner, 2019. "Crowdfunding a monthly income: an analysis of the membership platform Patreon," Jena Economic Research Papers 2019-010, Friedrich-Schiller-University Jena.
    • Handle: RePEc:jrp:jrpwrp:2019-010
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    File URL: http://www2.wiwi.uni-jena.de/Papers/jerp2019/wp_2019_010.pdf
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    References listed on IDEAS

    as
    1. Benjamin Shiller & Joel Waldfogel & Johnny Ryan, 2018. "The effect of ad blocking on website traffic and quality," RAND Journal of Economics, RAND Corporation, vol. 49(1), pages 43-63, March.
    2. Christian Peukert, 2019. "The next wave of digital technological change and the cultural industries," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 43(2), pages 189-210, June.
    3. Monic Sun & Feng Zhu, 2013. "Ad Revenue and Content Commercialization: Evidence from Blogs," Management Science, INFORMS, vol. 59(10), pages 2314-2331, October.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    crowdfunding; Patreon; funding dynamics; cultural goods; membership platform;

    JEL classification:

    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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