A concerned YouTuber emailed Patreon and was so encouraged by the response that she recorded a video entitled Patreon Is Not Going Away:
We’ve heard there are some concerns about the recent decision in the lawsuit we filed and wanted to clarify some things. First of all, there’s nothing to worry about overall. Litigation is an unfortunate fact of doing business and Patreon deals with a lot of it, the same as any other platform. Specifically in this situation, we filed a lawsuit to bring some frivolous arbitrations into court because these claims should be decided in court under our terms of use. Unfortunately the judge denied our preliminary injunction against those claims preceding in arbitrations so we’ll now deal with these in arbitrations while we proceed with the next stage of the lawsuit. It seems that some of the people who are involved in organizing these arbitrations are reporting that we are going bankrupt as a result of these claims. I can assure you, that this is not true and it appears that they are making those claims to try to keep up morale on their side and convince more people to bring claims against Patreon.
– Patreon PR
Allow me to observe that even the CEO of Patreon knows its business model is not sustainable. Back in January 2019, he observed that they would need to add revenue streams and reduce the percentage of payouts to creators to make it sustainable, but they obviously have not done so.
Far from being frivolous, at least 72 of the arbitrations are now certain winners thanks to Patreon’s inexplicable decision to violate its own Terms of Use and bring the very sort of group action in court that it waived its right to bring. The next stage of the lawsuit is going to be the 72 Bears bringing a demurrer which is very likely to be approved; even if the case is not immediately dismissed with prejudice, Patreon has no chance of winning a lawsuit that it has absolutely no right to have brought in the first place under its own contract.
It’s true that Patreon is very unlikely to go bankrupt right away as a result of the current claims. They received 60 million in investment last July, so even if they have been losing the estimated $1.5 million per month thanks to their expensive offices and 200+ employees since then, it should be sufficient to allow them to limp along for another two years or so. However, that presumes that the investors are going to sit by idly as the executives blow all their investment money on lawyers, arbitration fees, and awards, which strikes me as unlikely. Sooner or later, and the longer this dispute goes on, the sooner it will be, the investors are going to pull the remainder of their money out and put it in gold or the stock market, at which point it’s game over and all the creators move to whatever the next model happens to be.
And finally, what need do we have to keep up morale? Patreon is winless in JAMS administration, 0-for-4 in Owen’s arbitration, 0-for-2 in court, and counting. This statement strikes me as pure projection, especially given that it was made in an attempt to reassure a worried Patreon creator. We have absolutely no need to convince more people to bring claims against Patreon. We haven’t even made an arbitration template available to the hundreds of thousands of potentially interested parties; Patreon very foolishly did that when they included the full text of a demand for arbitration in their lawsuit filings.
(I genuinely could not believe that when I saw it. I’ve seen lawyers do some stupid and crazy things over the years, but that almost certainly takes the cake.)
Anyhow, the most important thing about this statement is the fact that Patreon felt the need to make it in the first place. Also, it’s not meth. Definitely not meth.