It’s 10p.m. on a Sunday in November at California’s Burbank Airport, and Jack Conte, the typically beaming, bearded half of the husband-and-wife musical duo Pomplamoose, is leaning back in a chair, his hoodie pulled over his head, trying to get some rest. Conte, 33, spent much of the weekend in Los Angeles jamming with his funk band, Scary Pockets, and now it’s time to return to San Francisco for an entirely different type of gig: his day job running Patreon, a website and mobile app where fans pay monthly subscriptions to support their favorite creators, from painters to podcasters, singers, dancers, writers, game designers and photographers.
The moment perfectly captures what Conte lightheartedly calls his “identity crisis”: being CEO and founder of a 100-person startup (valued in September at an estimated $400 million) without completely giving up on his passion for music, which is what led him to invent Patreon in the first place. “A lot of creators depend on us being a high-performance team,” Conte says during an interview at Patreon’s San Francisco office. “That’s the most important thing in the world to me, so there’s less time for music.”
Conte’s dedication stems from a conviction that Patreon can save content creators from having to survive on digital advertising – an all but impossible task for most – or resort to one-time campaigns on sites like Kickstarter and Indiegogo. The company is built on a counter-intuitive bet that fans are willing – even eager – to pay monthly subscriptions for content that they could get for free as long as it helps support their favorite artists and it’s easy to do. There’s reason to believe he’s right. More than a million Patreon users are helping provide some 50,000 artists with a predictable monthly paycheck. “On Kickstarter and Indiegogo, creators essentially have to start over every time,” says Danny Rimer, a partner at Index Ventures who is a Patreon investor and board member. “It’s the same reason software companies went from licensed software to subscriptions: predictable revenue and better service for customers.”
Since Conte started Patreon four years ago with his Stanford University roommate Sam Yam, 33, who is CTO, the company has paid out more than $250 million to its artists – $150 million in 2017 alone. Patreon’s traction is fueled by a simple pledging system and the direct line it opens between artists and fans, or “patrons,” who get access to perks like live Q&As or exclusive chats with the artists, and more casual behind-the-scenes footage than an artist might share on Instagram or Facebook. It also doesn’t hurt that being altruistic makes people feel good. In other words, Conte didn’t need to change human nature to get Patreon to work, he simply needed to facilitate the exchange between fan and artist.
While Patreon is no longer the only player in its category (Kickstarter launched a competitor called Drip in November), it is the largest – and it’s growing faster than ever. The number of patrons and creators and the amount pledged are all doubling yearly. Now Patreon is using some of the more than $100 million it has raised from investors, which include Joshua Kushner’s Thrive Capital and Freestyle Capital, to double its head count over the next year.
By some measures Patreon’s success defies logic. The average user pledges $12 per month, more than the cost of a basic subscription to Spotify or Netfl ix, which offers access to immense catalogs of video and music. (Some users pledge per piece.) Dozens of artists make more than $30,000 per month, including video reviewer Blind Wave and a capella singer Peter Hollens, who made about $400,000 on the site last year.
From the start, Patreon has taken a 5% cut of each pledge. That’s the same cut taken by Kickstarter and Indiegogo but far less than revenue-sharing programs on YouTube and Apple iTunes, which keep 45% and 30%, respectively. “The mission is to send as much money to creators as possible,” Conte says. The commissions generated an estimated $8 million in revenue last year.
Pledgers sign up for “tiers,” generally ranging from $1 to $10 – though some pay much more – for access to the artists’ perks. Ukulele performer Cynthia Lin, who offers fans live lessons, derives about half her income from Patreon and grew her fan base from 400 to 1,400 in the past year. With video “sketchbook tours” and chats, Chilean illustrator Fran Meneses pockets more than $4,000 per month, which supplements income from her Etsy shop and Instagram presence.
Creators join Patreon for free and don’t have to promise exclusivity. The site offers them instructions on how to use it most effectively. It also provides a growing list of back-office tools such as analytics and email management to help creators run membership campaigns modeled on those of NPR stations.
For now, Patreon is designed for creators who already have established followings but aren’t household names. Long term, Conte hopes to help fund bigger names and prove that technology can help restore the financial underpinnings for content creators that the internet has largely eroded.
Patreon’s artists-first ethos may be lucrative for some, but it comes with pitfalls, especially in a world where digital business models change frequently. “Creators need to diversify their incomes as much as possible so the rug can’t be pulled out from under them,” says Laura Chernikoff , executive director of the Internet Creators Guild.
For Conte the mission is personal. He grew up in bohemian-chic Marin County, just north of San Francisco, and was hooked on music from the age of six, when his father taught him the blues scale. While studying music and composition at Stanford, he started making YouTube videos with his then girlfriend, Nataly Knutsen, in 2007. (The two married in 2016.) In 2013 he drained his savings account, maxed out two credit cards and spent three months making an electronic music video, complete with robots and a replica of the Millennium Falcon cockpit. His fans loved the video, which got more than a million YouTube views in its first year. However, Conte pocketed just $54 from ad revenue over the video’s first month. To date, it has generated about $1,000. Not including Conte’s time, it had cost more than $10,000 to make. “It was this rock-bottom moment for me as a creator,” Conte says. He knew he’d created something of value but would never be paid for it. “That discrepancy led directly to the formation of Patreon,” he adds.
Conte discussed his idea with Yam, who programmed the site in months. It went live in May 2013, and within minutes more than 100 fans were pledging upwards of $700 a month to support Conte’s work. Within months Patreon had investors.
Conte is now eyeing a number of opportunities for growth. First is overseas expansion: The site is in English and takes only U.S. dollars, yet 40% of patrons are outside the U.S. Over time, Conte imagines more immersive features, such as virtual reality concerts. Farther out are somewhat fuzzy notions of turning Patreon into a provider of small-business services, including ticketing and merchandising, to help artists turn their passions into professions. “Artists don’t have to starve anymore,” Conte says. – Written by Kathleen Chaykowski
From The Arab World To Africa
In this exclusive interview with FORBES AFRICA, successful Dubai-based Emirati businesswoman, author and artist, Sheikha Hend Faisal Al Qassimi, shares some interesting insights on fashion, the future, and feminism in a shared world.
Sheikha Hend Faisal Al Qassimi wears many hats, as an artist, architect, author, entrepreneur and philanthropist based in the United Arab Emirates (UAE). She currently serves as the CEO of Paris London New York Events & Publishing (PLNY), that includes a magazine and a fashion house.
She runs Velvet Magazine, a luxury lifestyle publication in the Gulf founded in 2010 that showcases the diversity of the region home to several nationalities from around the world.
In this recent FORBES AFRICA interview, Hend, as she would want us to call her, speaks about the future of publishing, investing in intelligent content, and learning to be a part of the disruption around you.
As an entrepreneur too and the designer behind House of Hend, a luxury ready-to-wear line that showcases exquisite abayas, evening gowns and contemporary wear, her designs have been showcased in fashion shows across the world.
The Middle East is known for retail, but not typically, as a fashion hub in the same league as Paris, New York or Milan. Yet, she has changed the narrative of fashion in the region. “I have approached the world of fashion with what the customer wants,” says Hend. In this interview, she also extols African fashion talent and dwells on her own sartorial plans for the African continent.
In September, in Downtown Dubai, she is scheduled to open The Flower Café. Also an artist using creative expression meaningfully, she says it’s important to be “a role model of realism”.
She is also the author of The Black Book of Arabia, described as a collection of true stories from the Arab community offering a real glimpse into the lives of men and women across the Gulf Cooperation Council region.
In this interview, she also expounds on her home, Sharjah, one of the seven emirates in the UAE and the region’s educational hub. “A number of successful entrepreneurs have started in this culturally-rich emirate that’s home to 30 museums,” she concludes.
Kim Kardashian West Is Worth $900 Million After Agreeing To Sell A Stake In Her Cosmetics Firm To Coty
In what will be the second major Kardashian cashout in a year, Kim Kardashian West is selling a 20% stake in her cosmetics company KKW Beauty to beauty giant Coty COTY for $200 million. The deal—announced today—values KKW Beauty at $1 billion, making Kardashian West worth about $900 million, according to Forbes’estimates.
The acquisition, which is set to close in early 2021, will leave Kardashian West the majority owner of KKW Beauty, with an estimated 72% stake in the company, which is known for its color cosmetics like contouring creams and highlighters. Forbes estimates that her mother, Kris Jenner, owns 8% of the business. (Neither Kardashian West nor Kris Jenner have responded to a request for comment about their stakes.) According to Coty, she’ll remain responsible for creative efforts while Coty will focus on expanding product development outside the realm of color cosmetics.
Earlier this year, Kardashian West’s half-sister, Kylie Jenner, also inked a big deal with Coty, when she sold it 51% of her Kylie Cosmetics at a valuation of $1.2 billion. The deal left Jenner with a net worth of just under $900 million. Both Kylie Cosmetics and KKW Beauty are among a number of brands, including Anastasia Beverly Hills, Huda Beauty and Glossier, that have received sky-high valuations thanks to their social-media-friendly marketing.
“Kim is a true modern-day global icon,” said Coty chairman and CEO Peter Harf in a statement. “This influence, combined with Coty’s leadership and deep expertise in prestige beauty will allow us to achieve the full potential of her brands.”
The deal comes just days after Seed Beauty, which develops, manufactures and ships both KKW Beauty and Kylie Cosmetics, won a temporary injunction against KKW Beauty, hoping to prevent it from sharing trade secrets with Coty, which also owns brands like CoverGirl, Sally Hansen and Rimmel. On June 19, Seed filed a lawsuit against KKW Beauty seeking protection of its trade secrets ahead of an expected deal between Coty and KKW Beauty. The temporary order, granted on June 26, lasts until August 21 and forbids KKW Beauty from disclosing details related to the Seed-KKW relationship, including “the terms of those agreements, information about license use, marketing obligations, product launch and distribution, revenue sharing, intellectual property ownership, specifications, ingredients, formulas, plans and other information about Seed products.”
Coty has struggled in recent years, with Wall Street insisting it routinely overpays for acquisitions and has failed to keep up with contemporary beauty trends. The coronavirus pandemic has also hit the 116-year-old company hard. Since the beginning of the year, Coty’s stock price has fallen nearly 60%. The company, which had $8.6 billion in revenues in the year through June 2019, now sports a $3.3 billion market capitalization. By striking deals with companies like KKW Beauty and Kylie Cosmetics, Coty is hoping to refresh its image and appeal to younger consumers.
Kardashian West founded KKW Beauty in 2017, after successfully collaborating with Kylie Cosmetics on a set of lip kits. Like her half-sister, Kardashian West first launched online only, but later moved into Ulta stores in October 2019, helping her generate estimated revenues of $100 million last year. KKW Beauty is one of several business ventures for Kardashian West: She continues to appear on her family’s reality show, Keeping Up with the Kardashians, sells her own line of shapewear called Skims and promotes her mobile game, Kim Kardashian Hollywood. Her husband, Kanye West, recently announced a deal to sell a line of his Yeezy apparel in Gap stores.
“This is fun for me. Now I’m coming up with Kimojis and the app and all these other ideas,” Kardashian West told Forbesof her various business ventures in 2016. “I don’t see myself stopping.”
Covid-19: Restaurants, Beauty Salons, Cinemas Among Businesses That Will Operate Again In South Africa As Ramaphosa Announces Eased Lockdown Restrictions
South Africa’s President Cyril Ramaphosa addressed the nation announcing that the government will further ease the country’s lockdown restrictions.
Restaurants, beauty salons, cinemas are among the businesses that will be allowed to operate again in South Africa.
The country is still on lockdown ‘Level 3’ of the government’s “risk adjusted strategy”.
President Ramaphosa also spoke on the gender based violence in the country.
“It is with the heaviest of hearts that I stand before the women and the girls of South Africa this evening to talk about another pandemic that is raging in our country. The killing of women and children by the men of our country. As a man, as a husband, and as a father to daughters, I am appalled at what is no less than a war that is being waged against the women and the children of our country,” says Ramaphosa.
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