Google is cutting the subscription commission fees it charges app developers selling in its Play Store by at least 50%, according to a blog post by Android and Google Play Vice President of Product Management Sameer Samat.
The reduction in fees is specifically for app developers who make money from recurring subscriptions, the post stated. Under the original agreement, Google charged developers 30% the first year and 15% each subsequent year. Beginning Jan. 1, the fee will be 15% from the start.
“As the ecosystem evolved, a wider range of business models emerged to support these different types of apps,” Samat said in the post.
As time transpired, Google got a better sense of the kind of changes that were needed, which meant ditching the “one-size-fits-all” commission fees and paving the way for businesses of all kinds to experience success, according to the post.
“Instead of a single service fee, we now have multiple programs designed to support and encourage our diverse app ecosystem,” Samat said in the post. “The result is that 99% of developers qualify for a service fee of 15% or less.”
While digital subscriptions are now among the quickest growth models for developers, the trajectory can be challenging when it comes to customer retention, so Google is trying to simplify it, the post stated.
When Google’s Play Store first launched, most of the developers distributed their apps on the Android OS at no charge — and that’s true of 97% of the cases today. For those developers who offered a paid app or sold in-app services, the commission paid to the Play Store was 30%. Presently, just 3% of developers fall into that category