Revenue model based on subscription fees rather than on up-front license fees.
Recurring revenue models come in three basic flavors:
Subscription
: Fixed payment for service for a specific period of time— a day, a month, a year.
Example: Magazine subscriptions in which the subscriber pays to receive every issue for a year.
Other terms: Flat rate, membership.
Usage
: Charges per use or per unit of service.
Example: Home water service is commonly usage‐based billing. The more water used, the larger the bill.
Other terms: Metered usage, pay per use, pay per view, bandwidth billing.
Subscription plus Usage
: Combines fixed subscription for service level, with “verage”billed as extra charges.
Example: Canadian Internet provider Shaw Communications offers five tiers of subscriptions based on data transfers from $25 a month for 15 gigabytes to $150 for 350 gigabytes. Users who exceed limits are charged per gigabyte for overages.
Other terms: Combination billing.
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