Tech behemoth, Google is now reducing commissions on all subscription-based apps on the Google Play Store, as announced by the company. Previously, the company had followed Apple’s move by lowering commissions from 30% to 15% on the first $1 million of developer profits.
The Fee Reduction is Particularly for Subscription-Based Apps
Moreover, Google Play Store will reduce the fees particularly for app developers who generate revenue through recurring subscriptions. Instead of charging subscription-based apps with 30% in the first year, which drops to 15% in year two and beyond, Google states that developers will only be charged 15% from day one.
Furthermore, the company says that 99% of developers of subscription-based apps will qualify for a Google Play Store fees of 15% or less, as Google is also further reducing fees for particular vertical apps in the Play Media Experience Program. These will be modified to as low as 10%, it says.
The Play Media Experience Program includes apps like e-books and on-demand streaming music or video services, where the content costs account for the majority of sales. These are also businesses that, in some instances, compete directly with Google — as YouTube Music does with Spotify, for example.
The program was rolled out earlier this year to promote book, video and audio developers to build for Android, and had offered service fees as low as 15%. Developers of subscription-based apps are asked to fill out a form to express interest.
Digital Subscriptions Are One of the Fastest Growing Models of Applications
“Digital subscriptions have become one of the fastest-growing models for developers but we know that subscription businesses face specific challenges in customer acquisition and retention,” said Google’s Sameer Samat, vice president, Product Management, in an announcement concerning the Google Play Store fees.
He further continued, “We’ve worked with our partners in dating, fitness, education, and other sectors to understand the nuances of their businesses. Our current Google Play Store fees drops from 30% to 15% after 12 months of a recurring subscription. But we’ve heard that customer churn makes it challenging for subscription businesses to benefit from that reduced rate. So, we’re simplifying things to ensure they can.”