On the Money

Starving artists no more? Meet the Kickstarter for music, arts

The sound of money
The sound of money

Want to support your favorite starving artist? A new payments website—one born out of frustration—can help you help them.

"Patreon" Co-founder Jack Conte is half of the musical group Pomplamoose, who started the site two years ago. The group had been putting their music online, and getting some payment via a YouTube channel.

Yet with so much free online content available, many musicians, writers and other creators are struggling to get paid for their efforts. Conte wants to alter that dynamic.

In an interview with CNBC's On The Money, Conte explains, "I spent three months working on a music videos, working eighteen-hour days, put it out, got half-a-million views… and got a check in the mail for a couple hundred bucks."

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Conte added: "I thought, nope, that is not going to be how this works."

The musician decided to launch his own start-up with former Stanford roommate Sam Yam. Their idea was to create a digital fan club, to harness the power of fans. Thus was Patreon born, as a way for artists to make money from the songs, art and content they create.

"Artists get ongoing funding from their fans." Yam told CNBC.

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Patreon says 250 thousand patrons are donating small amounts of money to 14 thousand active creators. According to the website, it is sending $2 million dollars a month to artists, and the average payment creators are receiving per patron is $9 a month.

So why would fans pay for something they're getting online now for free?

"The idea is patrons are donating out of goodwill, but in terms of what they get back, its mostly about intimacy and interaction with artists," Yam explained.

Kickstarter is the largest crowdfunding platform. Since its 2009 launch, Kickstarter has funded more than 81,000 projects, with 8.3 million people pledging more than $1.6 billion in funds.

However, Yam explains instead of Kickstarter's model of providing funding for particular projects, Patreon is different. The site offers sustainable, continued funding for artists, he says.

"It's more about supporting artists in an ongoing way," Yam says. "The artists don't have to go through building up a whole new project just for their funding to create a whole new movie, or anything else."

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Patreon itself has received more than 17 million dollars in venture capital funding from investors including Sam Altman (president of Y Combinator), Stanford University, Alexis Ohanian (co-founder of Redditt), and David Marcus (former PayPal President).

Conte says Patreon is growing because more content creators are going out to their fans and telling their story, as he did.

"Guys, I'm making stuff. I know you like it," he said. "I know you're watching it or listening to it or reading it. And I'd like to get paid to continue." Conte says fans then flock to the site, and are responding with their financial support.

"It's a natural instinct that humans have," he said. Music and art lovers spot material that they love, "is beautiful and is worth our attention and our focus and we want to support it," Conte added. "We want more of it."

On the Money airs on CNBC Sundays at 7:30 pm, or check listings for airtimes in local markets.