“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,” Samat added. Companies including Netflix and Spotify currently don’t let users pay for subscriptions through Apple’s App Store or Google Play, because of the fees the app stores charge. It’s not clear whether the Google Play fee change to 15% out of the gate will convince the likes of Netflix or Spotify to change the status quo, though.
Google Play, the internet giant’s Android app store, will cut the cost it charges subscription developers to 15% beginning when users sign up for a recurring monthly plan. The modification will take effect on January 1, 2022. Currently, Google Play, like Apple’s App Store, charges applications with subscriptions 30% for the first year, then reduces to 15% after that. “We’ve heard that customer attrition makes it difficult for subscription firms to benefit from that lower rate.” So, in order for them to do so, we’re simplifying things,” Sameer Samat, VP of product management for Android and Google Play, said in a blog post announcing the charge shift.
According to Google, 97% of developers distribute their apps on Google Play for free. For developers that offer paid apps or offer in-app purchases, the flat service fee has been 30%. Apple charges the same standard “app tax” for its App Store. Both Google and Apple have faced growing calls from app makers like Spotify to adopt fairer terms for their app stores, while “Fortnite” developer Epic Games has sued both tech giants alleging their app stores represent illegal monopolies. (The ruling in the Apple case was largely in Apple’s favor, and Epic is appealing the decision.) In addition, U.S. lawmakers have introduced legislation aimed at curbing the app stores’ power. This summer, 36 U.S. state attorneys general sued Google, alleging the company’s Google Play store abused its dominant market position. (Google called the state AGs’ antitrust suit “meritless” and said Google Play is “a system that provides more openness and choice than others.”)
In addition, Google Play is reducing the service fee for on-demand music streaming services and ebooks, which will now be eligible for a service fee as low as 10%. “The new rates recognize industry economics of media content verticals and make Google Play work better for developers and the communities of artists, musicians and authors they represent,” Samat wrote. In a statement provided by Google, Bumble founder/CEO Whitney Wolfe Herd said, “The pricing change they’ve announced will allow us to better invest in our products and further empower users to confidently connect online.” The internet company also provided a quote from Duolingo CEO Luis von Ahn, who said, “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.”
God couldn’t be everywhere, that’s why he created mothers so the old saying goes, and we couldn’t. God couldn’t be everywhere, that’s why he created mothers so the old saying goes, and we couldn’t agree more! JK Paper got together with children across the country and got them to craft a letter to their #SuperMom. Through this initiative hundreds students wrote letters to their moms all over. Earlier this year, Google reduced its standard fee for all developers who earn less than $1 million on app purchases to 15% (following Apple’s move to do the same). Critics dismissed those as PR moves that didn’t address the virtual duopoly the two companies hold on app distribution.