New Delhi: In India, subscriptions used to be mainly for newspapers, cable television or magazine deliveries. In today’s world, they are one of the most crucial business strategies in all industries. From streaming entertainment to grocery delivery, cloud software to AI, fitness to financial services, businesses are increasingly shifting from a single sale to monthly or annual recurring payments.
It’s because there’s a clear revenue stream in subscriptions. Rather than having to convince customers to make repeated decisions to purchase, businesses are able to generate consistent revenue and develop long-term customer relationships. With the increasing costs of customer acquisition and a growing competitive landscape, recurring revenue has emerged as one of the most valuable assets that companies can develop.
The digital economy has been driving this change in India. The Telecom Regulatory Authority of India (TRAI) reports that India has more than 1.2 billion telecom subscribers and the mobile data pricing in India is one of the lowest in the world, which is being backed by the affordable smartphones. This has allowed millions of consumers to become digital users, setting the stage for subscription-based businesses.
One of the most obvious examples is the entertainment industry. As per OTT Audience Report 2025 by Ormax Media, there are around 601 million OTT users and 148 million paid OTT subscriptions in India. Platforms like Netflix, Amazon Prime Video, JioHotstar, Sony LIV and Spotify are no longer just battling it out on content. They aim to retain subscribers and ensure that they renew their subscriptions on a monthly basis. Any reduction in customer attrition can have a profound impact on long-term profitability, as it is typically much more costly to acquire a new subscriber than it is to retain an existing one.
The subscription concept is now gaining traction beyond entertainment. Quick commerce platforms like Blinkit, Zepto, Swiggy and Zomato have launched paid memberships that include free delivery, special discounts and priority services. These programmes may have a positive effect on consumers, but are also of great importance to the business. Members are more likely to purchase more often, stay on a single platform and be less price sensitive, which positively affects the company’s customer lifetime value.
Perhaps, the recurring revenue has been the greatest boon for technology companies. Microsoft has rebranded Office as Microsoft 365, Adobe has changed one-off software licenses to Creative Cloud subscriptions, and Google has turned cloud storage into a regular service with Google One. Recently, AI firms like OpenAI, Google and Anthropic have introduced high-end versions like ChatGPT Plus, Gemini Advanced and Claude Pro. Instead of selling software in one-off transactions, these businesses have recurring revenue that can be used to fund ongoing product development and costly computing hardware.
This business model is preferred by investors for the same reasons. Subscription businesses tend to have more consistent cash flows, and the profits are easier to predict. This enhances the financial transparency and can lead to better market valuations. While quarterly sales are still important, investors are now paying more attention to other indicators like Monthly Recurring Revenue (MRR), Annual Recurring Revenue (ARR), customer retention, and Customer Lifetime Value (LTV) to evaluate the long-term performance of the business.
This is the opportunity that India’s Software-as-a-Service (SaaS) industry brings to light. India’s SaaS market is projected to reach USD 50 billion a year by 2030, with a large portion of this revenue coming from subscription-based software, according to Bain & Company and NASSCOM. From a business perspective, the recurring billing model is the one that is most preferred, as it allows businesses to have a steady income and customers to have the option of paying it in installments.
The subscription model is also taking hold in the health care, online education, digital newspaper, investment research, fitness and even automotive service sectors. A trend of many electric vehicle (EV) manufacturers and connected car companies is to provide software features as a subscription service, rather than a product.
However, there are difficulties with the model as well. With consumers signing up for various streaming services, cloud services, AI tools, shopping memberships and productivity apps, the issue of “subscription fatigue” is increasingly heard. Businesses can no longer keep users with just an initial offer. But they need to keep creating value with unique content, customised experiences and superior customer service.
The overall situation, however, is unchanged. Subscription is not just for tech or streaming anymore; it’s a modern business hallmark. As India’s digital economy grows, recurring revenue is playing a pivotal role in boosting profitability, fostering customer loyalty, and mitigating reliance on volatile sales cycles.In the fast-paced digital landscape of India, recurring revenue is helping businesses thrive and enhance profitability, customer loyalty, and the elimination of reliance on erratic sales cycles. With the increasing adoption of digital, the winners will not necessarily be the companies with the highest number of products sold, but the ones that create the best long-term customer relationships with their subscriptions.
