OP here. My point is that getting paid yearly, especially if a lot of your subscribers pay yearly, means you're back to a similar feast-or-famine kind of cash flow situation as when you're transactional (e.g. an e-commerce shop). This is more hassle since you now need to be more careful about managing your cash flow and making sure you put aside for the leaner months. I fully acknowledge that it is a great hack for customer-funded startups (we do it ourselves at CrankWheel); as with all the "rules" it's more about becoming aware of the hassle associated with a given decision.

I also question whether annual billing increases retention, when your retention is good already (say, 3-5 years projected lifetime). Sure, it lifts your retention when your average lifetime is less than a year, but does it really when you have very low churn? Or are those big annual bills going to be scrutinized more thoroughly than a monthly cost?