If you choose the annual contract, that will run for a full year with you paying monthly installments. If you want to cancel early, you will have to reimburse them. That is exactly the same as phone plans, gym plans (with the exception that gyms often don't allow early cancellation at all), etc. Now if you don't cancel what do you think will happen with an annual contract? Of course it will prolong for another period of time that you chose, in this case a full year again. This is literally hoe contracts work.
If you get a monthly subscription of Netflix, you don't need to manually prolong it every month, do you?