Back in March, Google Play announced that it was cutting commission fees to 15% on the first $1 million in revenue from paid apps and in-app purchases (IAPs) for all Android developers. Google announced today that next year, the Play Store will only take a 15% cut on all subscriptions from day one.
At the moment, the Play Store service fee drops to 15% (from 30%) if customers keep a subscription for 12 continuous months. This is similar to Apple, but Google said today that “customer churn makes it challenging for subscription businesses to benefit from that reduced rate.”
As such, and presumably in response to the current regulatory environment, Google Play is decreasing the service fee for all app subscriptions from 30% to 15% “starting from day one.” The removal of the year-long requirement is notable, and something that Apple only offers to developers eligible for the App Store Small Business Program. Google is not imposing a similar size or income requirement on this subscription change.
The reduced Play subscription fees start on January 1, 2022, and Google notes “positive feedback from our developer partners on this change”:
Our partnership with Google has been a powerful one for our business, helping us to scale and ultimately playing a key role in advancing our mission to empower women globally. The pricing change they’ve announced will allow us to better invest in our products and further empower users to confidently connect online.
Whitney Wolfe Herd, founder and CEO, Bumble Inc.
Just as every person learns in different ways, every developer is different as well. We’re excited to see Google continuing to collaborate with the ecosystem to find models that work for both the developer and platform. This reduction in subscription fees will help Duolingo accelerate our mission of universally available language learning.
Luis von Ahn, cofounder and CEO of Duolingo.
Meanwhile, Google is also going one step further and offering developers of ebook and on-demand music streaming services apps part of the Play Media Experience program a “service fee as low as 10%” (from 15%). This lower rate is not available for video.
The program requires apps to support the latest platforms feature of Android on tablets, foldables, and Chromebooks, Wear OS, Android/Google TV, and Cast in exchange for the lower rates.
Google today reiterated the need for a service fee by arguing that it allows them to “continually invest in Android and Play while making them available for free to device makers all over the world.” This includes OS development, running/hosting Play Store distribution, as well as commerce/payments systems, automated security, and offering developer tools, like analytics, A/B testing, and training. It added that only 3% of Google Play developers are subject to service fees today.
More on Google Play:
- Google Play starts letting developers fill out ‘Data safety’ info, section launching in February
- Play Store will be required to allow alternate payment systems in South Korea
- Google starts rolling out Play Store Material You redesign, but it only scratches the surface
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