Anniversary billing TL;DR

Anniversary billing - more like mensiversary billing or rolling subscriptions, and not the same as annual billing - is a very controversial topic, so I figured it would be helpful to compile everything that has happened and what’s been shared so far in one thread. This way confused creators can be directed here to read what all the fuss is about and have a chance to catch up and join the discussion/conversation.

I’ll try to maintain this thread, but please feel free to add any info/sources I may have missed (or not have had the time to add) but I do request that you post your personal opinions / concerns or continue the discussion in the existing threads, like this one: We want and need your input on billing

How it started
We, creators, were given an early look at a blog post. The so-called “Community Edition”. See here: Looking back at 2020 and looking ahead to 2021: Community Edition

After we had expressed our desire for better, clearer communication and more transparency, it was extra painful when the actual published post contained a paragraph that was conveniently omitted (or a case of unfortunate miscommunication, according to Patreon) in the Community edition: Looking back at 2020 and looking ahead to 2021: Community Edition - #16 by Frenone

Why is this bad?
Well, for one: Patreon has a history of not consulting creators about very impactful changes. Anniversary billing came up before, and caused a massive backlash. This time it feels like they’re pushing for the same thing, just changing the story: Why content crowdfunder Patreon is halting its hated fee change – TechCrunch

We’re working on introducing this model carefully through in-depth research and a pilot test with a handful of selected creators. We recognize that this may mean change for some of you — we don’t take that lightly and we’re dedicated to taking your feedback on board. We’ll be sharing regular updates with you all as we make progress to ensure you have plenty of notice and time to prepare ahead of any changes.

…this part in particular had a lot of creators concerned, because in the past some unwanted changes had been forced down out throats, while creators never asked for them, much less given the option to provide feedback.

So it’s not strange many of us took this as “anniversary billing has already been adopted as the solution to double charging”. It’s like Patreon is trying to kill a fly with a sledgehammer.

Why we riot
The majority of creators have created their campaigns around the existing billing system. We’ve adapted to the platform, and now the platform might be changing and that could be disastrous to our businesses. This is threatening our livelihoods.

To explain things a bit better: Patreon currently utilizes “synchronized renewal” (everyone is billed on the 1st). “Double charges” refers to the problem where patrons who sign up on day 28 are charged the full subscription on sign up date and (shortly after) again on the renewal date. For many creators/campaigns this is intended. For some creators it isn’t as preferable. The scale or impact of perceived “double charges” is unknown.

So while the correlation between double charges and churn rates is not clear, we do know - from Carlos - that patrons who sign up in the last week are (67%) more likely to cancel within 7 days than patrons who sign up in the first week. For some reason these patrons have a “worse” experience (assumption), but Patreon assumes that’s due to double charging, because they get a lot of tickets about billing.

These churn rates could also be attributed to patrons who signed up to get a specific reward, for example. We simply don’t know. It’s definitely worth exploring solutions that could improve retention - however, we’re quite sure anniversary billing is not the solution we need.

There are more challenges / issues than “double charges” that need to be addressed, and changing the billing system as a blanket fix when there are so many different types of creators is going to create more issues than it’ll fix. Like increased payment processing fees, disrupting creators’ workflow, multiple bills throughout the month for multi-pledging patrons, to name a few. Again: sledgehammer + fly, we don’t want to destroy our house! So far the majority of creators and Patreon staff seem to agree on this.

So, what’s been said after this happened:
I’ll summarize this as best as I can, when I find the time to write things down, but in the meantime please visit these links

Which challenges / issues need to be addressed?

  • 1000+ billing-related tickets a month
  • improve retention: patrons who sign up in the last week are 67% more likely to cancel within 7 days (compared to patrons who sign up in the first week)
  • “double charges” are confusing some patrons
  • some creators requested rolling subscriptions.

What issues would rolling subscriptions (anniversary billing) create?

  • Steering away from aggregated pledges would result in higher payment processing fees
  • Multi-pledging patrons don’t want multiple charges throughout the month
  • Creators don’t want their pay-outs, workflow, rewards tracking and -distribution, or other forms of patron management (like welcome messages, follow ups to declined pledges) to change. It’s disruptive and would result in more time wasted on managing ‘side stuff’.

Alternative solutions

  1. Charge the full recurring amount at sign up (like it is now for CUF creators) but with an optional grace period. The grace period can be assigned to lower (virtual) tiers for example, but not higher tiers or tiers with physical rewards.

  2. Prorate the first payment, including upgrades. Downgrades take effect on the first renewal date.

  3. No charge at sign up, but always wait till the first synchronized renewal date. Essentially a waiting list. This option could potentially be desirable for creators who have tiers with limited slots and/or physical rewards with production deadlines.

All of these subscription models should be optional, because no size fits all… It would be desirable to toggle or change these settings for each individual tier, under “advanced settings” on the tier creation page for example. Note that all of this only affects the first bill, so it’s easier for patrons to understand different creators charge differently for various tiers, but it’ll keep the synchronized renewal and lower payment processing fees.

This is by no means a comprehensive summary of everything that’s been said - so I’ll try to update this later :slight_smile:

11 Likes

In case you missed this on Discord: “Let’s talk 2021 Roadmap and Billing” Friday January 29 10am PST Jack and the team are going live

2 Likes

The email I got after last night’s Community Convo:

Thank you for signing up for today’s Community Conversation with Jack, Carlos and Matt. If you would like to re-watch the session or you were unable to join us you can find a recording here .

The feedback today’s attendees provided was candid and insightful. Here are some of the key themes we heard (not an exhaustive list!):

  • Live events don’t work for everyone & it’s important to have a way to view the recording of live sessions like this
  • The Patreon Community forum needs more attention & action from Patreon staff
  • You want more regular, transparent information about Patreon’s product development process & roadmap (the idea of a monthly or quarterly newsletter appealed to many of you)
  • Our official Patreon Discord server can be overwhelming & should just be for Patreon creators (or at least have a dedicated section for patrons)

So, what now?
Please keep the feedback coming — fill out this survey to share your thoughts on today’s session so we can continue to evolve and improve our communication with Patreon creators.

If you’re interested in diving deeper into the topic of billing join us for our next Community Conversation for a discussion with the Product Manager leading our billing efforts & other members of Patreon’s team.

FRIDAY, FEBRUARY 12, 2021
10:00am PT / 1:00pm ET / 6:00pm GMT

Register now

4 Likes