Should subscription-based content creators display their earnings on crowdfunding platforms? Evidence from Patreon

• Published in: Journal of Business Venturing Insights Vol. 16; p. e00264
• Main Authors: Crosby, Paul, McKenzie, Jordi
• Format: Journal Article
• Language: English
• Published: Elsevier Inc 01-11-2021
• Subjects: Crowdfunding; Entrepreneurship; Natural experiment; Patreon; L26; Crowdfunding; Patreon; Entrepreneurship; L82; Z10; Natural experiment
• ISSN: 2352-6734; 2352-6734
• DOI: 10.1016/j.jbvi.2021.e00264

In January 2017, the subscription-based crowdfunding platform Patreon allowed their users (creators) the ability to hide their earnings from existing and potential subscribers. Prior to this, all monthly earnings were visible. We investigate what effect this policy change had on creators’ subscriber numbers over the following six months. Using double-robust and endogenous treatment estimation techniques, we find evidence that creators who removed the visibility of their earnings had more subscribers as a result. This suggests that the provision of social information does not lead to an increase in subscribers.
•This study exploits a natural experiment that occurred on the Patreon platform.•Patreon creators must decide whether to make their earnings visible to the public.•We find evidence that removing earnings visibility increase subscribers.•The provision of social information does not lead to an increase in subscribers.