Patreon Shareholder's Report '22-'23 (Patreon)

Those who are new here might not know, but every year I share how the finances are going for the channel. Your support is what makes this whole thing viable, so you should see where the money goes. Besides: I LOVE business, management and financial stuff, and some of you might be nerds of a similar persuasion, so let's jump into it. The Australian financial year is July 1 to June 30. All numbers listed are in AUD.

But before all that, I want to drop some phenomenal news: I've moved into a dedicated studio! This being a post about financial transparency, I'll tell you the rent is $8000/year. Thank you for making this possible. Here's a video about the move: https://youtu.be/S9A4HZqHCAQ

Reflecting on goals from '21-'22 Financial Year

• Website upgrade ✔
• Brand overhaul ✔
• Returning to podcasting ✘
• The year of content ✘

Website upgrade. This year my website underwent a bunch of long overdue cosmetic and structural surgeries, and is now actually USEFUL, which I'm so happy with. I'm not going to bore you with the details: just go to matthewperkins.net and click on things.

Brand overhaul. It's genuinely surprising how good the reception to my @heyitsMattyP switch has been. At PAX Australia last year, a couple people point and yell, "Matty P!" Some of my friends even call me Matty now, so I guess it's a natural fit.

Returning to podcasting. Didn't do it. And although it's cheap to say in retrospect, I don't think I have the structure in place to start up any kind of good podcast. If Icarus Games or Luboffin lived in Melbourne, I would jump on the opportunity to broadcast with them, but the format of podcasting has shifted away from work-from-home presenters in favour of in-person shows. If I meet someone in Melbourne who I have chemistry with though...

The year of content. Ha! I released 22 videos and disappeared for about four months. I cooked it.

Income $72,837.04 during '22-'23

Streaming $685.18
Sponsorships $1,831.44
DriveThruRPG $1,879.38
YouTube $3,359.39
Patreon $65,081.65

Streaming. Here's the issue with this streaming revenue: all the streaming platforms take a 50% cut of what people pay, and I don't feel the benefits are valuable at all. Because it goes against my strategy of providing people with overwhelming value, I am discontinuing monetisation on all my streaming activity. I even sent Twitch an email to remove me from their Affiliate program.

Sponsorships. Last year, I highlighted this revenue as a potential blindspot which I should focus more on. However, even though this had a 66% increase compared to last year, I don't think I'll be pursuing sponsorships at all moving forward. Doing a sponsorship slot stresses me out, the anticipation makes me dread filming the video, and I don't like talking to marketing people from all these companies. Thanks to support from Patreon, I have the luxury of saying no to these offers. The only way I see this changing is if I hired a manager to take ownership of arranging sponsors.

DriveThruRPG. Compared to last year, DriveThruRPG revenue is down 30%. I never promote my DriveThruRPG products. This is just a nice bonus, a little surprise each month.

YouTube. Ad revenue suffered a 21% decrease compared to last year, but I suspect that's because last year had Critical Role viewership thanks to my weekly recaps. My channel had 443k views and 51k hours watched this year compared to 616k views and 73.8k hours watched last year, which is strangely closer to a 40% difference than the 21% decrease in revenue, but surely sill correlated. There is nothing I can do to affect this except make better videos, to which I'd say: yeah, no duh.

Patreon. Hey, that's you! Patreon revenue has increased by 70%. I've done a lot of work to understand this, which will get its own section down below. Trust me, it's super interesting and not lame.

Expenses $10,715.30 during '22-'23

Wages $4,291.22
Gear $846.24
Admin and overhead $1,368.85
Website project $4,208.99

Most of these expenses aren't worth commenting on, but I will draw attention to one...

Wages. This year I paid 30% more to writers, artists and editors compared to last year — that's good! I'd like to double this number. I'm totally happy with my team, and it should be a priority to make the team stronger. This year, I bumped up the rate I pay per word for my writers, and I'd like to increase it further in the next two years.

Explaining the growth on Patreon

I generally manage Patreon without much of a plan or strategy other than to provide overwhelming value — for a pretty small price, you get about 100 pages of D&D content of a high standard. But even without a clear plan, I somehow stumbled onto a set of practises that worked very well this year, and after retroactively reading some books, I might know why. There are three ways to increase revenue on a subscription service:

• Increase the price (without driving people away)
• Increase the number of people subscribed
• Reduce the rate at which people unsubscribe (this is called the churn rate)

This year, I've hit all three.

I increased the price of the middle tier by $1 to reflect the breadth of PDFs available now, but this is only recent and wouldn't have a significant effect just yet. (FYI, this only applied to new patrons; all you OGs are still at the old price for as long as you're here.)

In the 21'-'22 period, Patreon was averaging 84 new members every month, but this year that number climbed to a truly ludicrous 142.3 (I don't know who that .3 of a person is, but oh my god, if there's anything I can do for you, please let me know.) I can't attest exactly to the reason behind this increase, because I don't track links, but I think it's because of my Stormwreck Isle coverage, and the practise of tying a Patreon PDF directly to every new video.

But the third point is what I'm most interested in. If anyone wanted, they could sign up for one month, download all the PDFs and then skedattle, but many people choose not to do that. In the previous financial year, Patreon's average monthly churn rate was 17%, meaning on average every month, 17% of the total patrons would leave. But this year, that number dropped to 15%! That might not seem exciting enough to warrant an exclamation mark, but it is.

I read that 2% difference as COMMUNITY; people who choose to stay subscribed without the incentive of unlocking content, even in the face of my four-month accidental hiatus.

Three reasons:

• Patrons are engaging with each other. In the Discord, people are helping each other! I cannot overstate how happy this makes me, because there is NOTHING I could do to make this happen. I don't have a community management skillset, but now I see something building organically like a sourdough culture! Like mold! Friendly, online mold!
• Patrons are hearing from me directly more often. It's not in my nature to be generally contactable, but I've been getting better at responding to messages. In particular, I've been diligent at sending new patrons a personal DM to check in, and in the last month I've been recording little welcome videos individually for every new patron. (If you're an OG patron and are disappointed that you've missed out on a welcome video, leave a comment on this post and I'll make something for you)
• Because patrons are now able to sign up for a year rather than renew monthly, they literally cannot unsubscribe during the next 12 months once they've chosen the yearly option. (I'm less sentimental about this as an explanation compared to the first two reasons.)

Goals for '23-'24

Recognise the plateau. I don't know at what point this gig hits its cruising speed, but I want to be vigilant in avoiding stagnation. I think when I see the plateau approaching, I will need to step up and launch a big, exciting project. This could be a book project, a pivot to include different content, a liveplay—who knows!

Launch a newsletter. By relying on Discord, Patreon, Twitter, Youtube—all these platforms owned by corporations—I am vulnerable to their policies and popularity. But EVERYONE has an email address, so I want to develop a fortnightly newsletter that delivers immediate, actionable value to Dungeon Masters of varying experience. I have this pencilled in to launch in November 2023, but the juice is still cooking.

Establish the TTRPG Design channel. I am in a unique position to make content supporting TTRPG graphic designers. My plan is to make videos where I replicate the design of TTRPG books in a legally-distinct way, and then share the templates in a dedicated post on Patreon. This could perhaps fall into one of the current donation tiers, because it's more specialised and technical content which I would expect designers to drive-by for rather than stick around for like all us regular Dungeon Masters.

Double my spending on wages. I have an instinct to do everything myself, which is bad. Provided I'm paying a fair rate, there is no limit to how much I would spend on getting help with my workload. More spending means more content means more value.

Decrease average monthly Patreon churn. The GOLDEN, completely unachievable number would be 5%, but I will be happy with literally any reduction in Patreon churn rate. To me, it's a measure of patron satisfaction, which I think validates my strategy of providing overwhelming value.

Transparency about my salary

I make a point to say this every year for full transparency. There was a time when literally every dollar made by the business was reinvested into the business, but as it got more and more difficult to justify expenses, I decided to reduce hours at my day job and take the excess revenue as compensation. I don't have any guilt or reservations about this because I've become a disciplined person, dedicated to making this gig work and producing rad D&D things, but I wouldn't want anyone to say they were misled about where their support goes; it goes towards my shrewd financial strategy of investing in an unfathomably large stockpile of spoiled milk — it's dirt cheap and I think the market is about to turn!

Thank you!

Shareholder's Report 1: https://www.patreon.com/posts/bi-annual-report-41477638
Shareholder's Report 2: https://www.patreon.com/posts/bi-annual-report-49217864
Shareholder's Report 3: https://www.patreon.com/posts/bi-annual-report-55825595
Shareholder's Report 4: https://www.patreon.com/posts/patreon-report-72362920