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The company
Letterboxd is a social network for film lovers that has quietly become one of cinema's most essential platforms.
What started in 2011 as a simple film diary has evolved into a thriving global community where over 20 million members discover, rate, review, and share their movie-watching experiences.
Members use the platform to log films, create watchlists, and connect with fellow cinephiles worldwide, while also accessing original content including interviews with award-winning directors and everyday film fans.
From complete newcomers to serious film scholars, Letterboxd serves as different things to different people - united by their love of cinema.
Letterboxd was founded on a love of film and our central mission has always been to help our community to discover films they might love. What has transpired is a global community, connected by a unique spirit of sharing films with each other.”
Catherine Buchanan, COO, Letterboxd
The Challenge
The platform operates on a freemium model, with most of the 21 million members enjoying free access while other users can upgrade to Pro and Patron subscriptions for enhanced features across web, iOS, and Android.
In an effort to avoid SKAN limitations, increase LTV of subscribers and keep more revenue by avoiding high fees, the Letterboxd team diversified their monetization strategy with web acquisition. But the company's multi-channel approach, selling through their website, Apple App Store, and Google Play Store, created significant challenges as they expanded internationally.
Although Apple and Google handled tax compliance for their respective platforms, Letterboxd's web subscriptions required them to navigate the maze of global sales tax regulations independently.
Handling sales tax globally ourselves would be a complex undertaking, and so finding a solution where this could be outsourced was important.”
Catherine Buchanan, COO, Letterboxd
For a small team focused on product development and community building, dedicating engineering and finance resources to tax compliance wasn't viable.
The complexity was particularly daunting given their global reach, with passionate film communities in unexpected markets like Brazil creating additional compliance considerations.
We're a small team. We're busy building our product. Putting engineering or finance resources into remitting sales tax isn’t our focus.”
Catherine Buchanan, COO, Letterboxd
The team knew they needed a solution that could scale alongside their growing international user base while allowing them to focus on what they do best: connecting film lovers worldwide.
The Solution
After evaluating their options within New Zealand's startup ecosystem, Letterboxd chose Paddle's Merchant of Record model to handle their web subscription payments and global tax compliance.
The decision came down to simplicity and reliability. Rather than cobbling together multiple services, payment processors, tax calculators, compliance tools, and billing systems, Paddle offered a complete solution that would handle everything from payment management to tax remittance across all markets.
The implementation was straightforward, allowing Letterboxd to maintain their focus on product development rather than getting bogged down in payment complexity.
Catherine Buchanan, COO, Letterboxd
The Results
Operational simplicity at scale
Letterboxd saw immediate impact. Top of mind was the elimination of administrative burden around global tax compliance. Instead of tracking tax obligations across 175+ countries, Letterboxd can now focus entirely on growing their platform and serving their community.
It’s about what we’re not having to do, remitting sales tax and cobbling together billing logic with sales tax, with registration, and third-party integrations.
Catherine Buchanan, COO, Letterboxd
Crystal-clear financial reporting
Compared to the opacity of app store reporting, Paddle provides the transparency Letterboxd needs to manage their business effectively.
The finance team can easily access detailed transaction data, manage refunds, and generate monthly reconciliation reports.
For me, it just makes it really easy monthly to grab a report so that I can reconcile the payment that arrives. I can see how much was paid in sales tax and how much we're receiving from every location. It's so simple.
Catherine Buchanan, COO, Letterboxd
Seamless customer support integration
The platform's transparency extends to customer support, enabling Letterboxd's team to quickly resolve payment issues but also provide a better, more focused service to their global community. Time with customers is no longer spent processing refunds, rather hearing the essential feedback necessary for the platform's evolution.
I like the ability to go in and see individual customer transactions, which empowers our customer support team to effectively assist customers. Paddle's support is also incredibly responsive.
Catherine Buchanan, COO, Letterboxd
Future Growth
As Letterboxd continues expanding their global film community, Paddle provides the infrastructure foundation that lets them focus on what matters most: connecting cinephiles worldwide through their shared passion for film.
With Paddle handling all the operational complexity of global expansion, Letterboxd can experiment with new markets and growth strategies without worrying about compliance implications.
By partnering with Paddle, we have been able to offload the intricacies of international sales tax compliance, so we can focus on developing our product, serving our community and reaching more film lovers around the world
Catherine Buchanan, COO, Letterboxd
Want to learn how Paddle can help you with global sales tax compliance? Speak to our team or create a free account to get started.