More publishers adopt 4-week subscription billing cycles

A growing number of publishers are using 4-week billing cycles instead of calendar months in order to extract additional revenue from their subscriber bases.

Four-week (or 28-day) billing cycles enable publishers to charge subscribers 13 times per year instead of 12, which equates to 8% additional revenue on an annualized basis. It’s an approach currently being used by major news publishers including The New York Times, The Washington Post, Boston Globe, and the Los Angeles Times, among others.

Toolkits examined the 100 largest U.S. publisher sites currently selling digital subscription products on either a 4-week or a monthly basis and found that 34% of those publishers use 4-week billing periods, up from 20% for the same group a year ago.

Subscription teams are under increased pressure to maximize revenues as challenging economic conditions persist and revenue from other channels – such as advertising and commerce – proves more difficult to generate. In that context, revising billing cycles and subscription terms to eke out additional revenue could be viewed as low-hanging fruit.

Four-week billing cycles can help generate additional revenue, but they come with potential risks and some key considerations, including:

Diminished subscriber trust

The most important consideration for any publisher evaluating 4-week vs calendar month billing is the perception of current and prospective subscribers. While many people may not notice, understand or mind the implications of 4-week billing, some may feel misled by the practice or view it as an attempt to misrepresent pricing. This dynamic is particularly pronounced for publishers that use complicated pricing language in their marketing or rely on fine print to explain the intricacies of their billing terms at the point of sale.

Four-week cycles also result in “floating” billing and transaction dates that change from one month to the next. This can leave subscribers confused as to when they’re being charged and why, and makes recurring payments more challenging to identify and parse on credit card statements.

Attempting to switch from monthly to 4-week billing also risks irking existing subscribers and triggering churn if not handled delicately and transparently. Some publishers that have attempted to make the switch have encountered resistance from customers who viewed it as a sneaky price increase. Publishers considering a move from monthly to 4-week billing should consider doing so only for new subscribers and leaving current subscribers with their existing payment cycles.

Less transparency and clarity

In light of the perception issue outlined above, publishers that opt for 4-week billing should ensure their terms are presented to subscribers simply and transparently. The word “monthly” might be avoided entirely in order to minimize the potential for misunderstanding, and publishers should not rely on asterisks and fine print to explain the specifics of their pricing. Simple and direct language promising “4 weeks for $X” is advisable in order to avoid misrepresentation or subscriber confusion.

Transparency and clarity around all aspects of publishers’ subscription pricing and marketing strategies is becoming a requirement as the U.S. Federal Trade Commission, as well as regulatory bodies in Europe and other markets, begin to step up their enforcement of misleading practices regarding subscription pricing, terms and simple cancellation mechanisms.

Established audience expectations

Audience expectations have been trained by the billing practices of a handful of major subscription services, particularly those offering access to streaming video and audio. Services offered by Netflix, Spotify, Apple, Google – and even cable TV providers – are all oriented around monthly subscriptions and billing cycles, and audiences may assume this is the industry standard, even if 4-week terms are clearly communicated during purchase processes. At present, publishers appear to be the outlier in terms of offering content-based subscription products on 4-week cycles.

Floating billing dates

For publishers, floating billing dates can also make subscription revenue harder to track and understand if they’re used to recognizing, reporting and forecasting based on monthly billing. Adjustments to reporting and other operations may be required, and some publishers may wish to opt for monthly billing for the sake of simplicity and consistency.

Research methodology: Toolkits analyzed the top 100 publisher sites selling digital subscription products on either a 4-week or monthly basis and collected data April 20-21, 2022 and April 25, 2023. Sample sites were ranked and selected based on volume of U.S. visits during 2022, as measured by Similarweb. Pricing and billing terms are based on publisher disclosures at the point of purchase, but we did not observe publishers’ actions at renewal. All offers analyzed were for “basic” digital plans or products, and were publicly available to new subscribers. Offers were examined using the incognito feature of Google’s Chrome browser, and a New York City IP address.