From a customer's stand point ....

When I have signed with a new web host, for the first year I would ONLY want to pay "month to month". Especially if the web host is new.

After the first year ... if there is a significant savings if I pay by the year ... then I will likely switch to annual billing.

But then ... this practice has developed over the past number of years due to the experiences with "some" web hosts (not my current one ).