Fears For Tiers At Redbubble

Tuesday, 15 August 2023

Opinion, by IA member Chris Murray.

We stand for artists, we honour them, their work, and their passions”.

- Redbubble co-founder Martin Hosking, 2020.

In April of 2023, popular print-on-demand site Redbubble announced that it was about to make "a big change" to its offer for artists. After a more-than-usually difficult couple of years for the creative community, was there the possibility of a better deal ahead for the people whose work the business was built on? Perhaps an improvement in searchability & promotion, or an increase to our 20% profit default? Well, no. With less than two week's notice and no consultation, a tier system of artist-classification was being introduced, and helping struggling artists was absolutely not one of its goals.

The tiers consist of "Standard, Premium, and Pro", and have been assigned by Redbubble in an opaque process that sees those unfortunate enough to land in the Standard category obliged to give up a large extra cut of what's meant to be the artist's profit-portion. Adding insult to injury, the classifications punish lower sales - the smallest makers are specifically targeted. High-selling Premium and Pro accounts are not subject to any extra charge. In fact, the tier system actually offers extra perks to those already-profitable users - a dedicated account manager, increased support for IP issues and marketing, direct offers to create licensed fan-art, advance notice to prep for sales, and a mail-out of tips & insights. The fee-slugged "Standards" are excluded from these services. For the lowest-earning Redbubble artists, there really is no upside.

The site's notification of the change did say that a review of the classification could be requested, but its reference to the process being “data-driven” (and listing of potential resultant outcomes as “change, remain, or in rare cases, suspension due to breach of community or content guidelines”) didn't sound like they'd be doing a lot of favours. Assurances of transparency, and declarations of keen interest in user opinion were more than a little undermined both by the arrival of tiers out the blue, and by the official announcement having been posted with a preemptively-closed comments section. The company's “Artist Success Team” flatly refused an email request for a breakdown of the number of artists placed in each category, stating that “this information is not public, and we cannot provide it”.

Compounding that, the language of Redbubble's notification was thick with doublespeak - the tiers would, they said, "encourage positive engagement with the marketplace" and "provide...platform improvements to better serve the artist community". Their specific example for the Standards, however, was contradictory. To paraphrase: “If you previously made $75 off $300 in sales, our new fee will leave you with $47”.

For maximum complexity, the scheme is also not a single, set-percentage take. A chart lays out a bizarre 39-part bracketing of fee-on-earning calculations. ($1 increments up to $20, then $5 increments up to $50, $10 increments to $100, and $50 increments to $500.) Unlike the standard progressive bracket-structure for income tax, RB's method takes a fee based on the full amount earned in each bracket - not just the portion OVER that bracket. For example if you clear $50 - $59.99 in profit, the site will take 22 of the dollars that previously would have been yours, but if you tip once single cent over to $60, it takes away $25. That's a 4.3% fee jump due to 1c extra in sales. Overall, however, percentages for each bracket slowly reduce as sales go up - so a $2 profit will be eaten by 50%, but a $200 profit will only lose 26%. And remember - if the site has decided you qualify as Pro, none of these fees will apply, carry on as previous. For a small user making a handful of sales and sitting on the site's default 20% cut, some of these examples whittle that margin down to 10%.

There's been talk online of this exploitative turn being thanks to unrealistic investor expectations that the Covid lockdown-era online-shopping boom would be everlasting. Profits reportedly doubled in the pandemic's first year, and shares jumped 10% - it was obviously a bubble for the 'Bubble, but tell that to the market. Inevitably, in the first half of the 2023 financial year Redbubble turned back down again, reporting an $18 million operating loss, with shares hitting a 2-year low. T-shirts were still popular, but sales of homewares, artwork, and masks had fallen. Beyond the lockdown-factor, the company's costs had risen, supply-chains had been interrupted, and inflation had reduced the public's discretionary spending. Behind the cheery facade, there's been a staff cut of 14% this year, and a change of boss.

It's worth mentioning that Redbubble's executive are decidedly not drawn from the arts sector. Departing CEO Michael Ilczynski has a history with Seek, Tabcorp, McKinsey, and the Collingwood Football Club. The rest of the board is similarly big-corporate, with several others from Seek, as well as alumni from Amazon, ANZ, KPMG, UBS, Crown, and Afterpay. The multinational of 2023 is a long way from the plucky Melbourne startup of 2006. Even the return of founder Martin Hosking as CEO hasn't changed that - the announcement of staff cuts and the raid on lower-earning artist's profits came soon after his resumption of the role in March.

At last count, the number of artists on the platform had reached over 700,000. It's difficult to get figures on how many of those artists make an amount of money that will buy more than the occasional coffee. If online user-feedback is anything to go by, the majority have been qualified Standard - even accounts that make hundreds of dollars each month have been reportedly placed in that tier. Meanwhile, the company publicity asserts that independent "passionate creatives" will find the platform "a simple but meaningful way to show the world who they are and what they care about". Two years ago, CEO Illczynski said RB's ambition was to attract even more artists, while retaining its current base. This new gouge makes that quest for fresh young players look pretty cynical - it seems clear what the non-creatives of the company really care about.

So, will the current base stay, in these reduced circumstances? Some have said they'll keep their shops open in an improvised protest-mode - cranking prices to maximum and adapting their banners to let buyers know what's happening. And other options are out there - some artists recommend setting up on Etsy, linked to print-on-demands like Shopify for product-fulfilment. (An imperfect solution – Etsy has fees per-listing & transaction, while Shopify has a monthly fee.) Society 6, Zazzle, Cafe Press, Spring (aka TeeSpring), and Printful have been good for others. On the cautionary side, Threadless has let its quality decline over the last decade, and Teepublic is owned by Redbubble. It's tempting to simply focus on placing goods in local retail outlets or work the various makers-markets, but the potential audience of the online world and promise of passive income remains undeniably tantalising.

I personally don't relish starting over elsewhere, and it's a shame to be contemplating it – RB's history as the local-kid-made-good, plus its large audience, wide range of products, and generally decent print-quality make it a wrench to leave. For many of us, RB was our first online shop - but nostalgia has its limits. Redbubble's statement of ethics talks about “core values of creativity and compassion... building trust through good intent”. That rhetoric now strains credulity. This new “offer” feels a lot like being robbed by someone pretending to be a friend.

(For Redbubble users wishing to let the company know their feelings on the tier-fee scheme, here's the site's survey/feedback link: Qualtrics Survey | Qualtrics Experience Management)