How do people upgrade their iphones every year?

Don't you have to pay a fee to upgrade before 2 years? I keep seeing iphones being sold at record highs every high but you have to pay a fee right? Or am I just missing something here?

Added (1). every year*

About the iPhone cloud storage?

Okay so I have the iPhone 5s and it comes with 5gb for the cloud free and it looks like maybe 12gb of memory. If I get more of the cloud usage will that add to the memory of the phone. Bottom line is I want to put more music on my phone. I'm not at all familiar with apple or iPhones in general.

How to get me photos back when IOS 8 deleted them?

So I updated my iphone to the new iOS 8, it turns out I only have 300 pictures in my library when I had over 1,000. Please is there a way to get them back? The pictures werent saved on my laptop so I'm scared that I won't be able to get them back. Someone please help!