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Developers that offer subscription video, audio or book apps, and services that are available through the Google Play Store will soon be able to pocket quite a bit more of the subscription revenue they get fro their customers. Google has announced that it will be dropping its 30% subscription fee rate to just 15% or in some cases as low as 10%, starting on January first. The current policy forces app developers to hand over 30% of any recurring subscription fees for the first 12 months before that rate drops to 15%. While having to wait 12 months to get that reduced rate may not seem like a big deal, according to Google, the “customer churn makes it challenging for subscription businesses to benefit from that reduced rate.”
Google’s vice president of product management for Android and Google Play stated that “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.”
Google definitely deserves some recognition for making this change since its original 30% cut for simply facilitating the subscription process through the Google Play Store was a complete ripoff, the company isn’t lowering its rates out of kindness. Google and Apple have been facing a lot of scrutiny over their monopolistic practices relating to their app stores on Android and iOS. US regulators are poised to ensure that consumers and developers aren’t being taken advantage of, simply because there are no or few alternatives to Google’s and Apple’s app distribution platforms.
With this change, Google is betting that it will show regulators that the company is willing to offer better terms to developers, allowing them to keep more of their profits. Google does have the advantage over Apple when it comes to app distribution since Android users do have the option to install third-party app stores or simply download and install applications on their own, but the Google Play Store is still a very integral part of the Android experience.
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