Google on Thursday announced that it is lowering commission fees for all subscriptions-based apps on its Play Store from 30% to 15%. The move comes following increased regulatory scrutiny over the app stores and widespread criticism about its fee structure from developers.
“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,” the company said in a blog post.
The tech giant is going a step further and offering developers of ebook and on-demand music streaming services app a “service fee as low as 10%” (from 15%) as part of the Play Media Experience program. This lower rate is not available for video.
“Today, we’re also making changes to the service fee in the Media Experience program, to better accommodate differences in these categories. Ebooks and on-demand music streaming services, where content costs account for the majority of sales, will now be eligible for a service fee as low as 10 per cent,” the blog stated.
The revised fee structure will be effective from January 2022 next year and likely encourage developers to switch from one-time payment modes to subscriptions.
“To help support the specific needs of developers offering subscriptions, starting on January 1, 2022, we’re decreasing the service fee for all subscriptions on Google Play from 30% to 15%, starting from day one,” the post added.
Google says that one reason for the change is that “we’ve heard that customer churn makes it challenging for subscription businesses to benefit from that reduced rate.”
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In March, Google had announced a program for small businesses, under which it reduced this fee to 15% for apps that make less than $1 million off its platform, a move that mimicked Apple, which did the same last November.
