Switch to Subscription/Anniversary Billing (Patreon)

Greetings! I've decided to switch the page from "legacy" billing (where a pledge only gets you access for the calendar month) to "subscription" billing (where you get access for one month from the date you sign up.) The most important point is that absolutely nothing changes if you're already a supporter. The rest of this post is just more detail - probably more than you want - but if you're curious read on!

What's the Change?

"Subscription" billing brings Patreon memberships in line with how billing for most other things work. With a Spotify subscription, for example, if you pay for one month, you get one month of access, starting from the date you sign up. For a long time Patreon wasn't like that - it operated on a calendar month model, where if you pledged any time in, say, January, you only got access for the remainder of January and would be billed again on 1 February (assuming you didn't cancel.) Patreon introduced "subscription billing" a while back to make memberships work more like a Spotify subscription, but creators had to specifically opt into that. I have now done so.

To be clear, if you signed up before today, you'll continue to be re-billed on the first of the month, and absolutely nothing changes about your experience on the platform or what percentage of your pledge actually makes it to any of the creators you support. But now, if you sign up on say, the 15th, you'll get access until the 15th of the following month, and will be rebilled on the 15th (unless you cancel.)

Why the Change?

The biggest reason for the change is to make memberships work like most people would expect them to. Even though Patreon is more a "support people making stuff you like" platform than a "fee for service" platform like Spotify, "legacy" billing could sometimes lead to people feeling they got ripped off. If someone signed up on 29 December, that pledge only got them 3 days of access to posts. Even worse, they'd only have 3 days to cancel before they'd get charged again! Even if someone really wants to support you, they may feel a little sore getting hit twice in such a short amount of time. This is bad for supporters, and it's probably also bad for the project, since it discourages people from signing up.

Another reason for the change is because the billing schedule sometimes affected the release schedule, which I didn't really like. In the past, I was usually hesitant to release things late in the month. New releases usually lead to new signups, but if it's late in the month those people end up getting kinda shafted. Or I might try to release something on the last day of the month, so that existing supporters would get access to it, but new signups would only have to wait a day to avoid getting hosed. Now, with subscription billing, I can just release things whenever they're ready as opposed to trying to sync releases with some sort of billing cycle.

The third and final reason is because I did some more looking into how subscription billing affects various fees Patreon charges, and determined there's really no reason not to change over. More on this below.

Other Concerns and Issues

Patreon Fees

The tl;dr is that the creators you support will still get reduced processing fees as long as all your pledges are charged on the same day. If you're billed on the same day of the month for all the creators you support, things will work exactly as they always have.

The big advantage to the old way Patreon worked was that it consolidated processing fees, which led to more of your pledge making it to the creators you wanted to support. As an example, let's say you supported one creator with a $1 pledge. 30 cents plus 1.6% goes to the banks for processing fees, leaving about 68 cents. Of that, Patreon got 5%, which meant the creator only got about 63 cents. But what if you supported 5 different creators with $1 pledges? You got charged once, for $5, and after the banks take their cut there's $4.62 left. Then after Patreon's cut there's about $4.38 left, or roughly 88 cents to each creator from a $1 pledge. 88 cents versus 63 cents is a pretty big difference. Less of your money went to the banks, and more went to the projects you wanted to support. The old billing system made lots of small donations to different people feasible.

Patreon's financial stuff is a lot more complicated now, but the bottom line is that "Founders Plan" creators - basically those who started before May 2019 - still get the benefit of consolidated processing fees. Subscription billing adds another wrinkle to that since it's now possible you'll be billed on different days of the month for different creators. If you're billed for 3 different Founders Plan creators on the 15th, the processing fees will be split exactly as they were when you were billed for all of them on the 1st. But if you're billed for one on the 1st, one on the 10th, and one on the 15th, all three will have their own separate processing fee, and the banks will get more of the money you intended for your creators.

Newer creators do not get the benefit of processing fee consolidation, though they have lower processing fees for small pledges. Newer creators will get about 77 cents of a $1 pledge and about $4.15 of a $5 pledge, regardless of how many other creators you support. (I get a minimum of $4.37 on a $5 pledge.)

My advice - especially if you're making multiple small pledges to different people - is to try to try to have them billed on the same day. Or on as few different days as possible. That way more of your support actually goes to the people you want to support.

Convenience of "One Patreon Charge Per Month"

A big reason I was hesitant to switch over to subscription billing is because it can lead to situations where people are charged at different times of the month for different creators they support. Under the old system this didn't happen. The pledges for all your creators were charged on the same day - the 1st. If you wanted to reassess how much you were donating to people, you could sit down at the end of the month and do that, without worrying about whether you'd end up paying more than you wanted that month because you forgot you'd signed up for creator X on the 16th rather than the 18th. There's a benefit to having one bill on one day, no matter how many different people you're supporting.

That benefit is mostly gone now. Subscription billing is the only choice new creators have, and most established ones have switched over to it by now. Ironically, by holding the line on "one bill per month convenience" I could be making it harder for someone who's trying to line up all their pledges on the 15th to do that.

I think the old system was better in general, but it's basically gone. Holding out is, at this point, just fighting the tide.

Foreign Transaction Fees

Related to the above is foreign transaction fees. Patreon charges their own modest currency conversion fees, but I'm talking here about the fees that banks/credit cards charge their own members for making purchases in a foreign currency. Some banks and countries are really bad about this sort of thing, and charge large flat rate fees in addition to a percentage of the transaction. Being charged one time per month for multiple creators is good for these people, since they only get hit with the flat fee once, while having different creators charged on different days can quickly make it very expensive.

But as I said above, all new creators are stuck on the new system, and most established ones have moved to it as well. The fewer the number of creators on the old system, the less sense it makes for me to stay on it. Supporters who incur large foreign transaction fees can still ensure they're only hit once by lining up all their pledges on the same day. It just requires them to time when they sign up now, as opposed to being the default. Given the widespread adoption of subscription billing, me being a holdout doesn't really make life easier for these people.

Conclusion

While I liked the old system better, the advantages disappear once hardly anyone's on it. And I think we've reached that point. The disadvantages are there regardless, and by now I think they clearly outweigh the benefits, so I'm switching it over. As I said, if you're currently a supporter, absolutely nothing changes for you or the creators you support. Hopefully this will make life a little easier for new (or returning) supporters. If you have any questions, please let me know - and thank you for your support!