The App Store and Play Store, while generating tons of revenue, have been the headache of both Apple and Google in recent times as they continue to face scrutiny for unfair policies and practices. In a bid to reduce the regulatory pressure on its Play Store, Google is walking down the same path as Apple and is lowering the commissions on all subscription-based businesses on the Google Play Store.
Currently, developers must pay a fee of 30% to Google for the first 12 months before the commission rate is reduced to 15%.
Now, subscription-based apps will be eligible to pay a fee of 15%, which is lesser than the earlier fee of 30%. According to Google, 99% of developers would now qualify for the lower service fee.
“Ebooks and on-demand music streaming services,” which are part of its Play Media Experience Program, will also be “eligible” for a fee “as low as 10%. This will be effective from January 1, 2022.
According to Google, the cheaper rate on ebooks and music streaming apps was because “content costs account for the majority of sales” and that the 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.”
Sameer Samat, vice president of Product Management for Google Play, said that digital subscriptions have evolved into one of the fastest-growing models for developers, but subscription businesses continue to face specific challenges in customer acquisition and retention. Since customer churn makes it challenging for subscription businesses to benefit from that reduced rate, Google is simplifying things to ensure they can. It has spoken with the developer community and received feedback.
While Google has received its fair share of scrutiny over its Play Store (South Korea’s recent “anti-Google” law also intensifies the situation for Google), it is Apple that is seeing the worst of it. In fact, Fortnite maker Epic Games had taken Apple to court over its App Store earlier.