A recurring revenue model is when a portion of a company's revenue that is likely to continue in the future. Recurring revenue model is based on subscription fees rather than up-front license fees. There are three basic types of the recurring revenue model.  They are subscription, usage, and subscription plus usage. Subscription is a fixed payment for a service in a specific time period (day, month, and year). Usage charges per use or unit, like the water service. Subscription plus usage combines the fixed subscription with the usage, such as cell phone service.