This article covers FAQs related to tests of a new option for patron billing, planned for late 2021 – early 2022. Nothing is changing for creators any time soon.
Contents
Overview and logistics
What’s changing with billing?
Nothing is changing any time soon, but we are testing a new patron billing model that we plan to make optional for current creators in 2022. The current first-of-the-month model leaves many patrons feeling like they’ve been ‘double-charged’ if they sign up toward the end of a month and are charged again on the first of the following month. We are gearing up to test this new billing model with a few creators who opt in. If it goes well, we’ll expand the tests and eventually make it optional in 2022.
The new model is a hybrid of our existing billing plus some new features. In the future, for creators who opt in, here’s how it would work:
- Nothing would change for a creator’s existing patrons. They would continue to be billed on the first of each month.
- New patrons who are subscribing to their first creator on Patreon would renew on the same day of the month that they signed up.
- Patrons of existing creators who subscribe to opted-in creators would have all charges combined into one monthly bill on the day of their oldest existing subscription.
- Creators would still be able to withdraw one monthly auto-payout, like always.
- There would be no increase in payment-processing rates and no additional fees.
When is this being rolled out? Will it be mandatory?
Nothing is changing for creators anytime soon. We’re starting to test the new model with a very small group so we can learn and work out any issues before expanding the pilot to more creators. After thorough observation and adjustments based on what we learn, we plan to make the new model optional at some point in 2022.
What happens for new patrons under the model we’re testing?
New patrons who aren’t subscribed to any other creators will be billed each month on the date they signed up. For example, a patron who signs up on the 12th of January is billed again on the 12th of every month. They’re charged in the way they expect, leading to fewer cancellations.
What happens for patrons who subscribe to multiple creators (“multi-patrons”), if they sign up to a creator using the new model?
Multi-patrons would have all charges combined into one monthly bill that renews on the date of their oldest existing subscription. This ensures patrons only have to keep track of one single bill per month and avoids additional payment-processing fees for creators.
For example, a patron has a bill for Creator A renewing on the 1st of each month and signs up for Creator B, who has opted into the new model, on the 15th. Since the patron only gets two weeks of access to Creator B before both subscriptions renew on the 1st, they’ll only pay for those two weeks at sign-up. Then they’ll pay for a full month to both creators on the 1st of every month after that.
We know proration will work well for some creators and not for others, which is one of many reasons we want to make this new billing model optional for the creators that want it.
What are the benefits of making changes to billing?
- It’s easier for new patrons to understand. For patrons who subscribe to a Charge Up-Front creator, getting billed on their sign-up date and again on the 1st (before they’ve had a full month of benefits) leaves them feeling like they’ve been wrongly double-charged. It reduces their trust and often leads to them cancelling their membership.
- Creators can promote their Patreon throughout the month. We hear from many creators that they avoid promoting Patreon to their audiences in the second half of the month in order to avoid patrons feeling double-charged.
- It is likely to boost patron conversion (more sign-ups from people that visit your page). Data shows that patron sign-ups trend downward toward the end of the month, as people who are considering subscribing to a creator leave without doing so.
- Creators can spend less time answering messages or refund requests from confused patrons, and more time creating.
- It unlocks highly requested features, like gifting and trial memberships. All of our systems are set up to grant access to patron-only content based on a first-of-the-month cycle. With our current situation, people would have to redeem gift cards on the first of the month or only get a partial month.
What happens if a patron’s billing date falls on a day that doesn’t occur each month (i.e. the 31st)?
The patron’s bill will renew on the last available date of the next month, and that date will be the monthly billing date going forward. Someone who signs up on 30 January will renew on 28 February, and then on the 28th of each month after that.
How does this work for annual memberships?
The first phase of the pilot focuses on creators who don’t offer annual memberships. In future phases when we’ve added support for annual memberships, new patrons who subscribe annually would renew one year from their sign-up date. For example, a patron who signs up on 3 November 2021, would renew on 3 November 2022 (compared to 1 December 2022, as is the case today). For future phases, we’re still thinking through what would happen for patrons who subscribe to multiple creators on annual plans, or to creators on both annual and monthly plans.
What happens if an existing patron cancels their subscription and then resubscribes after a creator has opted into hybrid billing?
The patron’s subscription would be treated as a new subscription and would renew on their sign-up date (if they don’t already subscribe to any other creators).
Benefit delivery
I’m a creator whose workflows rely on first-of-the-month billing. How will I keep track of benefit delivery if pledges come in throughout the month?
As we test and learn, we’re keeping in mind creators who rely on first-of-the-month billing to deliver benefits. We will work with these creators to understand what improved tools and resources they’d need to make this model work.
What if a patron upgrades or downgrades their pledge during the first month after benefit delivery?
As happens today, patrons who upgrade get charged the outstanding amount straight away and get access to the higher tier straight away. Downgrades will remain on the original tier until the next billing date. Upgrading or downgrading will not change a patron’s billing date.
Proration
What is proration?
Proration is when a patron is charged proportionally to the days of access they receive, and will likely happen at checkout under the new billing model we’re testing when a patron subscribes to multiple creators. For example, if a patron subscribes to Creator A with a renewal date of the 1st, and then subscribes to Creator B on the 15th, these two charges would be combined and renewed on the date of their oldest existing subscription (the 1st). Because they would only receive two weeks’ access to their newest creator before their bill renews, we would reduce their bill so they only pay for two weeks.
We know proration will work well for some creators and not for others, which is one of many reasons we want to make this new billing model optional for the creators that want it.
Why does proration happen at checkout for multi-patrons during the pilot? Doesn’t this mean patrons get access to my back catalogue without paying full value?
We know that prorating for partial months will work well for some creators, and not others, so we’re going to test this further in the pilot. We’re looking to see whether the billing changes lead to fewer patrons cancelling after the first month (improving patron retention over time), which means greater value to creators in the long run. Then we’ll start exploring options for creators who don’t want proration to see if we can find a solution that allows them to opt in to the new model.
What happens if a patron pledges to a low-value tier near (i.e. £1) near the end of the month? How would that be prorated?
As happens today, the minimum amount a patron can be charged is £1. This will only apply to a small number of patrons during the pilot, so we don’t expect it to cause any widespread issues.
Could I decide which tiers can be prorated for multi-patrons, and by how much?
During the pilot, all tiers will be prorated for patrons who support more than one creator based on the amount of time left before their renewal date (the date of their oldest existing subscription).
After we test and learn, we’ll start exploring options for creators that don’t want prorating to see if we can find a solution that allows them to opt in to the new model.
Pilot
How did you choose the creators participating in the pilot?
For the first phase of the pilot, we’re working with a handful of creators who are interested in changing their billing model and are open to working closely with us as we test and learn. We want to start with a very small group so we can observe and work out any issues that arise before we invite more creators into the mix. Only once we see things are working well will we then invite more creators to participate. If you’re interested in being considered when the pilot expands, sign up here.
Optionality
When the new model is optional for all creators, how would combined bills work for patrons who subscribe to creators on both models?
For patrons whose oldest existing subscription is to a creator not opted into the new hybrid model, all new monthly memberships will be combined with their oldest subscription and will renew on the 1st of the month.
Patrons who first subscribe to a creator on hybrid billing and later to a creator, not on hybrid billing will have two bills per month maximum. All subscriptions they have to a creator on hybrid billing will be combined into one bill, and all the others will be combined on the first. This one exception to patrons only having one bill per month will be rare, and is a result of offering the hybrid model as an option.