--- title: "What Is ARR? Annual Recurring Revenue Explained | RentAnOTT" description: "ARR is a streaming service's recurring subscription revenue expressed per year. See the formula, what it excludes and how it differs from annual revenue." url: "https://www.rentanott.com/glossary/arr" markdown_url: "https://www.rentanott.com/glossary/arr.md" category: "Metrics" updated: "2026-10-05" --- # What is ARR? ARR (annual recurring revenue) is the subscription income a service would earn over a year if its current subscribers and prices stayed as they are. It is monthly recurring revenue multiplied by 12. ## How to calculate ARR Take the recurring subscription revenue for the current month, with annual plans counted at one twelfth of their price, and multiply by 12. A service with $40,000 of MRR has $480,000 of ARR. ## What ARR excludes For a service that earns mainly from ads or transactions, ARR describes only a small part of the business. - Rentals, purchases and pay-per-view - Advertising - Coin packs and other one-time in-app purchases - Setup or service fees ## ARR vs annual revenue ARR is a snapshot of the present run rate, not a total of what was earned in the past twelve months and not a forecast. It assumes nobody joins or leaves. Because monthly subscribers can cancel at any time, a consumer service's ARR is less certain than that of a business with annual contracts. It is most useful for comparing size between periods and for conversations with investors, who commonly think in ARR. ## ARR on RentAnOTT The revenue calculator projects recurring subscription revenue month by month from your traffic, conversion, price and churn. Multiply a month's figure by 12 for ARR. [Try the revenue calculator](https://www.rentanott.com/tools/ott-revenue-calculator). ## Related terms - [MRR](https://www.rentanott.com/glossary/mrr) — MRR (monthly recurring revenue) is the subscription income a service can expect every month from its active subscribers, with all plans normalized to a monthly amount. It excludes one-time sales and other irregular income. - [Churn rate](https://www.rentanott.com/glossary/churn-rate) — Churn rate is the percentage of a streaming service's subscribers who cancel or fail to renew during a period, usually a month. It is the main measure of how well a subscription service keeps its customers. - [ARPU](https://www.rentanott.com/glossary/arpu) — ARPU (average revenue per user) is a service's total revenue in a period divided by the number of users in that period. It shows how much each user is worth on average, across subscriptions, advertising and one-time sales. - [LTV](https://www.rentanott.com/glossary/ltv) — LTV (customer lifetime value) is the total revenue, or margin, a service expects to earn from one subscriber over the whole time they stay. It tells you how much you can afford to spend to acquire a customer. - [SVOD](https://www.rentanott.com/glossary/svod) — SVOD (subscription video on demand) is a streaming model where viewers pay a recurring fee, usually monthly or yearly, for unlimited access to a catalog of on-demand video. - [Recurring billing](https://www.rentanott.com/glossary/recurring-billing) — Recurring billing is charging a customer's saved payment method automatically at a fixed interval, such as every month or year, until they cancel. It is the billing mechanism behind every streaming subscription. - [Retention rate](https://www.rentanott.com/glossary/retention-rate) — Retention rate is the percentage of subscribers, or users, who are still with a service at the end of a period out of those who were there at the start. It is the mirror image of churn rate. ## Further reading - [OTT subscription plans and tiers](https://www.rentanott.com/blogs/ott-subscription-plans) - [SVOD vs VOD: what is the difference?](https://www.rentanott.com/blogs/svod-vs-vod) - [Features](https://www.rentanott.com/features) ## Frequently asked questions ### What does ARR stand for? ARR stands for annual recurring revenue. ### Should a streaming service report MRR or ARR? MRR for running the business month to month, since most subscribers pay monthly. ARR is the same number scaled up and is used mainly for external comparison. ### Do annual plans count fully toward ARR? Yes. An annual plan contributes its full yearly price to ARR and one twelfth of it to MRR. All 163 terms: [Streaming and OTT glossary](https://www.rentanott.com/glossary). ## Book a demo Tell RentAnOTT what you are launching. The team walks through the platform and maps the path to go-live around your catalog, markets and revenue model. Book a demo: https://www.rentanott.com/contact ## More from RentAnOTT - [Home](https://www.rentanott.com/index.md) — What RentAnOTT is, what every plan includes, and how launch works - [Features](https://www.rentanott.com/features.md) — Every core feature and optional add-on - [Pricing](https://www.rentanott.com/pricing.md) — Platform tiers, apps, add-ons, usage rates and example bills in INR and USD - [Free tools](https://www.rentanott.com/tools.md) — OTT app builder and calculators for streaming revenue, bandwidth, bitrate and pricing - [Insights](https://www.rentanott.com/blogs.md) — All streaming business articles - [Glossary](https://www.rentanott.com/glossary.md) — Definitions of streaming and OTT terms - [Book a demo](https://www.rentanott.com/contact.md) — Talk to RentAnOTT about your launch Full site in one file: https://www.rentanott.com/llms-full.txt