How membership revenue works
Paid memberships, whether on Patreon, Substack, Discord, Ko-fi or your own site, earn monthly recurring revenue, or MRR. Each month some members cancel (churn) and new ones join. The gap between the two decides whether your income grows, holds or shrinks.
Unlike one-off sales, a membership compounds. Members who stay keep paying, so a small change in churn adds up to a big difference over a year.
The formulas
Average price = each tier's price weighted by its share of members. MRR = members × average price. What you keep = MRR − platform fee − payment processing. Next month's members = members × (1 − churn) + new members.
With 300 members paying an average of $11.50, MRR is $3,450. After a 10% platform fee and 2.9% + 30¢ processing, you keep about $2,915.
Churn, lifetime value and your ceiling
Lifetime value (LTV) = what you keep per member a month ÷ monthly churn. At 6% churn, members stay about 16.7 months on average, so a member who leaves you $9.72 a month is worth about $162.
Churn also sets a ceiling. Members level off where cancellations match new joins, at new members a month ÷ churn. With 40 new members a month and 6% churn, that's about 667 members. To grow past it, you need more joins or fewer cancellations.
Platform fees at the time of writing
These change often, so check your platform's pricing before you plan around them:
- Patreon: 10% for creators who joined from August 2025, plus processing. Older accounts may pay 5% to 12%.
- Substack: 10% of paid subscriptions, plus Stripe's processing fees.
- Ko-fi: 5% on memberships on the free plan, plus processing; 0% with Ko-fi Gold.
- Discord server subscriptions: you keep about 90%, and app store fees can apply on mobile.
How to keep members longer
Small things keep members around: a welcome message with a clear first step, a schedule people can count on, and a yearly plan at a discount. Every point of churn you cut raises lifetime value and your ceiling at the same time.
Frequently asked questions
How do I calculate MRR?
Multiply your paying members by the average monthly price. 200 members at an average of $8 is $1,600 MRR before fees.
What's a good churn rate for a membership?
Many creator memberships see roughly 5% to 10% a month, and under 5% is strong. Yearly plans and a steady schedule help keep it down.
How much does Patreon take?
At the time of writing, Patreon's standard fee for new creators is 10% of earnings, plus payment processing of about 2.9% + 30¢ on most payments. Older accounts may be on a different plan.
What is lifetime value (LTV)?
The total you can expect to keep from one member before they cancel: what you keep per member a month divided by monthly churn.
Should I offer more than one tier?
Usually, yes. A small share of members on a higher tier can lift your average a lot. In the example, 10% of members on a $40 tier add $4 to the average price.