Sarah Penna: Head of Creator Partnerships at Patreon
Social media platforms in chaos, creators dependent on algorithms for monetization, the ongoing challenge of offering personalization and value to audiences: oh my. In this Art of Sway episode, we dig into some of 2023’s biggest creator economy challenges with Patreon’s Head of Creator Partnerships, Sarah Penna.
Sarah Penna has been at the forefront of supporting and creating successful content for the last 14 years. Prior to joining Patreon as its senior manager of creator partnerships, she co-founded Frolic Media, a content destination celebrating all things romance and pop culture. Sarah also co-founded Big Frame, the first digital only talent management firm. She helped to establish Big Frame as an industry-leading media and talent management company with 300 talent signed, who have a combined 70 plus million YouTube subscribers and a total social media reach of 200 plus million followers.
Be sure to tune in as Sarah shares her best advice for long-term creator success, as well as:
- How a subscription model improves creator compensation strategies
- The power of creators maintaining direct one-to-one connections with audiences
- How creators can achieve more control over their own monetization
- Why social platforms are like renting an audience versus owning
- The benefits of connecting with audiences in less toxic and public environments
- Why social audiences are wanting more ‘fireside chat moments’ and less ‘stadium moments’
Episode 17: Sarah Penna Transcript
Danielle Wiley: Welcome to The Art of Sway. This is a podcast that brings you inside the world of marketing through the lens of influence. I’m your host, Danielle Wiley. Each week, through candid conversations with industry insiders, we will uncover how influencer marketing is making an impact across all consumer buying habits and is changing the way we talk to each other. Let’s dive in.
Danielle Wiley: Sarah Penna has been at the forefront of supporting and creating successful content for the last 14 years. Prior to joining Patreon as its senior manager of creator partnerships, she co-founded Frolic Media, a company telling female forward love and romance stories. Sarah also co-founded Big Frame, the first digital only talent management firm. She helped to establish Big Frame as an industry-leading media and talent management company with 300 talent signed, who have a combined 70 plus million YouTube subscribers and a total social media reach of 200 plus million followers.
Danielle Wiley: Sarah’s role at Patreon is to lead the launch team responsible for launching creators successfully on the platform. Sarah Penna and I met years ago when Sway was just in its infancy, and Sarah was making a huge impact in the YouTube space at Awesomeness. I loved catching up with her and learning all about the membership model of creator monetization. We think this is a huge trend in the creator economy and one that is just going to grow bigger this year. Enjoy the discussion.
Danielle Wiley: Hi. It’s so nice to see you again. We just figured out pre-recording that it’s probably been eight years since we saw each other’s faces.
Sarah Penna: Yes, which is shocking.
Danielle Wiley: Of course, I have known you for awhile. But I thought it would be great to start off by having you give the audience just a little sense of your journey because it’s super interesting. You have really been at the forefront of just the creator space, especially video, really since its beginning. I just remember you telling me the story, I guess it was now eight to 10 years ago, about how you got started. It was very interesting to me then. Of course, you’ve added more exciting things after that. Why don’t we set the stage and have you take us through how you got where you are?
Sarah Penna: Absolutely. As you mentioned, it was a very non-linear path to get where I am. I started out in reality TV in that 2006, 2007 time period, which was the heyday, pre-writer strike. It was super fun, but definitely realized it wasn’t for me, and started seeing people uploading video to this new thing called YouTube. I ultimately got a job at Al Gore’s TV network called Current TV in San Francisco. Many people do not remember this, but it was a really experimental, ahead of its time TV network where you could upload short documentaries onto a website, and we would buy the ones that we felt were the best. Then we would put them on a TV network. It was really cool. Then the 2008 recession hit, and everyone got laid off.
Sarah Penna: We were supposed to IPO. Instead, everyone got laid off, and they sold the network to Al Jazeera. But out of that journey, I decided I really liked the web side of the TV convergence, leaned harder into the YouTube space, and wound up getting hired by, at the time, he was between the number one and number two most subscribed channel in the world, Phil DeFranco, learned that early YouTube era model of brand deals and AdSense, and wound up leaving working with him to start my own talent management company, Big Frame. The very short version is essentially, raised a little bit of venture capital, ran that for four years with a co-founder, sold it.
Danielle Wiley: Sorry to interrupt you, but that was really… Just to set the stage for people, now, MCNs, multichannel networks for those that don’t know, have been around forever. It seems like they probably already existed. YouTube is super mature at this point, but that was really early and very forward thinking of you. That wasn’t a thing people were doing, right?
Sarah Penna: That’s true. It’s funny because I didn’t set out to be an entrepreneur. Like many entrepreneur’s journeys, I essentially went around and was trying to get some YouTube friends of mine, management and agents. I got essentially laughed out of the room, “What are we going to do with these guys?” I was like, “I think I can do this.” That arrogance that comes with naivete was like, “How hard can it be?” It’s really hard. But we built up something really special, always took this very creator first mindset with Big Frame, and never scaled to the size of a maker or a full screen, but ultimately had a successful exit. We sold to Dreamworks in 2014 while I was six months pregnant, which was such a journey. Then they folded us up into Awesomeness TV, where I worked for three years, where we met as I was running this vertical for them that was targeted at new millennial moms. I left there in 2017 and went and started a more traditional media company. The focus was taking romance novels and optioning them for film, TV, and podcasting.
Danielle Wiley: We never really talked much about that, but I think especially now with Book Talk and all these, my business partner shared with all of us, gave us the joy of Tessa Bailey while we were at a leadership retreat. Now we all have jokes about sexy fishermen.
Sarah Penna: Love that book. We actually optioned that book, which is so fun. Frolic optioned that book.
Danielle Wiley: They were all teasing me because my husband asked for this, this’ll come out after Christmas. I’m not giving anything away, but he asked for this really big fisherman-like sweater for Christmas. They were all like, “We know why.”
Sarah Penna: I love it. Honestly, we could do a whole other podcast too about romance. I think it’s such a fascinating space. I’m obviously a huge fan. It was really fun and interesting to dive into a world that I wasn’t as familiar with in terms of optioning books. I had a co-founder who comes from the more traditional film and TV space, Lisa Burger. We did that for three years, two of which were during the pandemic. It was really challenging. The company is still existing and still thriving. We have books under option.
Sarah Penna: I had this opportunity to come and work, connect back in with the more traditional, or I guess… It’s funny to say, “More traditional creator space.” But the creator economy, I saw it flourishing. Really, that’s where my heart is. I had this opportunity to come work at Patreon and just couldn’t say no because I so deeply believe in the mission of what Patreon is doing. I’ve now been at Patreon for a little over a year running our creator partnerships team. That was not very succinct, but that was the journey that I have been on so far.
Danielle Wiley: There’s a lot to cover. I always say that I’m an accidental CEO, and I never had any intention of starting a business. I saw a need, there was something I wanted to do, and I just did it. I don’t know that I could go through that again. The fact that you’ve gone in there a number of times is very inspiring, or maybe you’re just crazy. I don’t know.
Sarah Penna: I think that. I looked at my husband when I took the Patreon job, and I was like, “Remind me that I don’t want to start another company. Please remind me,” because I have all of these ideas, I see all of these things happening, and I’m like, “Ooh, I could do that.” It is incredibly hard, as you know, being this old decision maker for a long time. An extended period of time can be very exhausting.
Danielle Wiley: And isolating. It’s a lot.
Sarah Penna: Yes, all of the things.
Danielle Wiley: I’m really interested in talking to you about this new model of creator compensation, this subscription model. I saw you commented on my LinkedIn last week. I was sharing our predictions for 2023. One of them is really the rise of the subscription model for creators. I’m an old school food blogger person, so most of my subscriptions are food bloggers. But there’s a lot of them, and they’re kind of expensive. One of the things that really fascinates me is just it’s so early on in this way of compensation, and I see it growing so tremendously. But yet at the same time, I wonder, how is this going to pan out? It’s not a Netflix necessarily where you get a whole number of shows. It’s like each creator is Netflix, Hulu. Each one costs its own amount of money. It’s a significant amount of money, especially when you start adding them up. I’m so curious to talk to you about where you think this is going and how it’s going to evolve because I think it’s great for the creators. It just gives them this level of control over their own monetization that has not been there.
Sarah Penna: I think, first of all, Patreon, I think we’re eight or nine years old now. Jack and Sam, who started it, have been at this for awhile. But to your point, I think it’s just starting. It’s sort of like the podcasting industry as a whole. It’s been around for a long time, but it’s just starting to enter mainstream consciousness. We’re really here to enable long-term success for creators. I think we talk a lot about being beholden to an algorithm or having gatekeepers for your monetization. We really believe that if a creator is right for membership, and not every creator is, that it is the best way to have that direct one-to-one connection with your fan base. I think as you’re seeing the chaos over at Twitter, for example, a lot of creators whose main contact with their audience is on Twitter, that’s a really scary thing to suddenly realize, “This could go away overnight, and I could lose everything.” It’s a tale as old as YouTube, where you’re renting your audience from these platforms.
Danielle Wiley: Today, it’s end of December. I just saw the news that Auburn University shut down TikTok because of state laws now banning it. That’s terrifying.
Sarah Penna: Exactly. By the way, it always has been. Even building Big Frame on the back of YouTube was a very tenuous business model that we all were very uncomfortable about because they could change their mind at any time. They could say suddenly, “MCNs, we don’t want them to exist,” and pull the plug on the whole thing. We certainly had moments where things changed, and we had to adjust large portions of our business. We have two things happening in the creator economy. One is this awakening and realization of renting your audience versus owning, and this realization that it’s really hard, there’s a lot of talk about burnout. Part of burnout is not knowing where your income is going to come from or how much it’s going to be. You could make as a big creator, six figures one month, and then for four months, make nothing or a couple thousand dollars. That lumpiness is very stressful over the course of many years. I’m married to a former YouTube influencer. Trust me, it is feast or famine.
Danielle Wiley: I was just going to say a couple of the episodes from season one were with former mom bloggers who were part of this roster when we started. No surprise, they both moved on to other more dependable streams of income because it’s a hustle. To your point, it is feast or famine. It’s up and down, and it’s difficult to maintain it in the long term for sure.
Sarah Penna: Exactly. I think you bring up a valid point of if everybody has a subscription, are we going to get into the same scenario of the pie suddenly becomes a lot smaller? The pie becomes bigger, but the slices become smaller, That’s what you see when YouTube, for example, opens up monetization to everybody versus it used to be you had be selected to be in the partner program, your CPMs were high. Now, suddenly, CPMs are spread out across millions of channels, and the slices of the pie just gets smaller. Your CPMs go down, but YouTube makes more money.
Sarah Penna: We believe that there’s room for this space to grow exponentially. The value that you’re getting, yes, it is different than a Netflix, but you are getting more intimate connections with your audience. Your audience is getting to connect with each other in a less toxic and public environment, like Discord, for example. I saw someone on Twitter talking yesterday about this idea of people are craving more fireside chat moments and less stadium moments. If Twitter is the stadium, discord is the fireside chat with your favorite creators. That has a lot of value.
Danielle Wiley: It’s like the old school blog comment areas. That’s where we all met each other, and it didn’t feel like a fire hose. It felt like a fireside chat. Even though you’d get an occasional troll, there was still more control over that. You could put your wall around, keep it intimate and just special, and really build that community up, which has become difficult.
Sarah Penna: You touched on something so interesting that this nostalgia for the early version of the internet that felt really unique, cool, and safer in some ways and less divisive and toxic and just this… We’re not meant to consume this much information. We wake up, and you open Twitter if that’s the first thing you do, which I have a bad habit of sometimes doing. You’re just immediately bombarded with information. I think there’s a desire and a nostalgia for those early forums or the comment section under blogs. You look at Discord, and it looks and feels very much like an early two thousands forum. People are gravitating to that because that was special, felt valuable, and felt you did make friends in that way. YouTube used to be that too. When it was a little more of an intimate environment, you’d make friends in the comment section of YouTube.
Danielle Wiley: I’ve been on the internet for a long time. I still have friends that I met on an AOL message board about [inaudible 00:15:37] on a Yahoo group for moms due in November 2001. eGullet, which was an old food message board forum, I still have friends from there and have built out that community. It’s super powerful in a way that I don’t know that I see anywhere. Not to sound like, “Get off my lawn.”
Sarah Penna: No, but I think that even the younger generation, Gen Z, is looking for that. They’re looking for a more intimate connection. We got caught in the middle, where we got to experience that, then we’re the Guinea pigs for this social media experiment. Now it’s like, “Is there a way to get back there?” Obviously, at Patreon, we believe that there is. There’s a way of not only creating value for your fans, which is ultimately the goal, but to also give yourself that breathing room and that financial stability, even if it’s just covering your rent or you’re saving up for a new camera lens or something. It gives you that extra stability that you’re not going to see from just being on social media.
Danielle Wiley: What I was wondering is, do you think we’re going to see consolidation with different creators where they form an alliance just to…
Sarah Penna: That’s interesting.
Danielle Wiley: … take advantage of a larger pool of people and not have to split that pie so much. To my point earlier, it can be pricey if you want to subscribe to or support all the creators that you love. It can add up. To me, the next obvious step are for people who hit a similar-ish audience to join forces and offer a joint one.
Sarah Penna: I could see a world where that’s happening. You’re starting to see that consolidation happen and bundling happen with the streamers, but it took us a long time to get there. I think we’re still in that early phase of finding out who works in membership and who doesn’t. Then do we get to a point where it makes sense to start bundling? I’m not sure we’re there yet though.
Danielle Wiley: What kind of resources are you offering to your creators? It has to benefit you. The more money they make, the more money you’re going to make, the better they are at taking advantage of this type of monetization. It helps everyone. I have to imagine that you’re offering some kind of support to them.
Sarah Penna: Exactly. The Creator Partnerships team exists to support creators on their journey as they look to build a membership. We help them. We’re doing a lot of education out in the marketplace, so outreach to creators who maybe have thought about membership but haven’t taken that leap, or maybe haven’t even thought about membership, and we can walk them through what it could look and feel like. Then we have a dedicated launch team that are experts on our platform, and can help them set up both on the technical side, but also help them share best practices around marketing, promotion, building and setting up their tiers, really getting to know the creator so that they can help them develop the benefits that would make the most sense, and coming at that from this deep understanding and empathy.
Sarah Penna: Patreon is one of those few companies that says they’re creator first and really, truly is. Our entire team is dedicated to giving a white glove service to the creators that we work with. Of course, the majority of creators are going to launch organically on the platform, but we impact a certain percentage of them.
Danielle Wiley: Got it. Then you said before that not everyone is tailor-made for membership, and certain creators are more appropriate for it than others. You don’t have to give me the whole secret sauce, but what are some of the clues to follow this new monetization model? I guess it’s not new anymore, but newer.
Sarah Penna: As we’re seeing the sophistication of this space, I think the original viewpoint of creators was, “Number of followers equals value.” I think we’ve exited that phase, and we’re entering the phase of, “Quality of followers and subscribers equals value.” A creator who is able to move their audiences across platform and has that just really deep connection, they don’t have to be the biggest creators in the world, but they do have to have a very intimate and deep connection with their audience. That modality that benefits or that embodies that the most is podcasting because podcasting has a discoverability issue. If you are listening to a podcast, you are really dedicated to finding and listening to that podcast. YouTube obviously is more rooted in an algorithm. Sometimes it’s hard to tell how true that audience is.
Sarah Penna: It really is about that connection with the audience and the ability to move them across platforms. Are they buying your merch? Are they coming to your live shows? Did you start on TikTok, but now you’ve built your audience on YouTube? Do your fans deeply care about the kind of content that you’re doing? There’s a value of content as well. It’s interesting too, we’ve had some learnings around sometimes if a podcast is too long, and then they put extra content behind the paywall, they’re like, “I’m satisfied.” You have to have that right balance of length of content and amount of content, and then an audience that has an appetite to want more and is willing to build that community. There’s a creator named Elyse Meyers who’s a great example of someone who’s just like…
Danielle Wiley: We’re big fans of her here at Sway.
Sarah Penna: She’s amazing. Obviously, she has a very large following, but you can tell she has a really special relationship with her fans. They’re going to follow her. They’re going to come out and want more content from her.
Danielle Wiley: Amazing. I just love the fact that the Patreon model goes across different platforms, to the point we were talking about earlier with not knowing when something’s going to go away or not. It’s very special, I think, to be able to say, “This is me. Whether I’m blogging, making a TikTok video, or doing my podcast, this is my personal brand.” There’s just a lot of freedom that comes from that.
Sarah Penna: Absolutely. I think the freedom piece is so true. You can experiment. You can test things out with your Patreon audience before you broadcast it to the world. You can have that really unique and more intimate relationship with your fans in this context.
Danielle Wiley: I love it. This was super interesting. But before I let you go, at the end of every podcast episode, we’re asking our guests to share, what TV commercial from your childhood has most stuck with you today?
Sarah Penna: Oh my gosh. I wasn’t allowed to watch a lot of TV as a child, but I can still sing this jingle to… I’m a child of the eighties. There was a rent to own utilities. You could rent to own refrigerators, washing machines, and stuff. For some reason, me and my whole family still know the phone number and the jingle to this random rent to own company. I don’t even know the name of the company. I just know their number. I don’t know why that has stuck with me, but that’s it.
Danielle Wiley: That’s amazing. I always share that mine is a cleaning product, which is similarly not sexy at all. But who knows how our brains work, the things that stick in them?
Sarah Penna: It’s so funny. I know. I love that question.
Danielle Wiley: This was awesome. It was so nice catching up with you.
Sarah Penna: You too.
Danielle Wiley: Hopefully, we don’t wait another eight years.
Sarah Penna: I know.
Danielle Wiley: I’ll be a grandma next time.
Sarah Penna: I’ll have a teenager, Oh my God.
Danielle Wiley: Good luck to you.
Sarah Penna: Thank you. It was so good to see you.
Danielle Wiley: You too. To find Sarah and Patreon online, just follow @Patreon everywhere you follow social media. Thank you for listening. Don’t forget to like, share, and subscribe. Please check back next Monday for a new episode featuring marketing conversations through the lens of influence. I am your host, Danielle Wiley, and this is The Art of Sway.