I think the author's assumption is that the subscriber would use the service for twelve months whether they were on monthly or annual.
So, if that's the case, you're better off taking the extra x% percent that a monthly plan gives you.
I think the author was also making the point that while you might have all your money upfront, you won't manage it well so it lasts all year. Could you? Yes. Will you? No.
And from personal experience, depending on who your customer is, a yearly plan can make revenue far less predictable.. for a corporate customer there is a big difference between a $12k annual charge, and $1k monthly charge. The first they will scrutinize every year and question its value, while the second they might not even notice.
So, if that's the case, you're better off taking the extra x% percent that a monthly plan gives you.
I think the author was also making the point that while you might have all your money upfront, you won't manage it well so it lasts all year. Could you? Yes. Will you? No.
And from personal experience, depending on who your customer is, a yearly plan can make revenue far less predictable.. for a corporate customer there is a big difference between a $12k annual charge, and $1k monthly charge. The first they will scrutinize every year and question its value, while the second they might not even notice.