have been evolving and the model of Google Play is based on feedback that we receive from our developer ecosystem. We are always working on bringing changes to make developers successful on Play Store,” a spokesperson said. Days after Apple reduced service fees in its app store, Google has announced a similar move. Google said that it has slashed the service fees it collects from the subscription-based app in Play Store. The announcement comes as both the companies are under constant pressure from lawmakers and regulators. Regulators have been pressing these companies to make their mobile stores more accessible to developers. Google said that more apps would be eligible to pay considerably less than a 30 percent service fee. The company has said that developers will now have to pay a 15 percent cut on subscriptions to Google. The company also announced that all on-demand music streaming services and ebooks will be eligible for an even lower fee. They will now have to pay as low as 10 percent. The company said that lower fees for music streaming apps and ebooks are because of the reason that “content costs account for the majority of sales.” The model followed by the company till now made developers a 30 percent cut on subscriptions to Google. This was applicable for the first 12 months after which the commission would drop to 15 percent. Google said that almost 99 percent of the developer would now be eligible for a lower service fee.
Google was also under pressure from companies like Spotify. At the moment, users who try signing up for a Spotify subscription on Android are redirected to the website of the company where users are asked to enter their payment information. The lower subscription fees from music streaming apps are still at the discretion of Google. This will depend on two factors – first, whether the app is eligible, and second how low the fee would be. Explaining how developers would get to know whether they are available for reduced fees, a spokesperson of the company said that developers can review program guidelines. “They should go through the guidelines and express their interest. If they would be eligible for reduced fees, we will follow up with more information. Earlier, the structure of the service fee was similar to that of Apple. It used to charge 30 percent during the first year and 15 percent thereafter. The new structure makes it 15 percent flat right from the beginning. This is likely to be a great incentive that can promote more developers to switch to subscriptions from one-time payments.
Earlier in March this year, Google started a program wherein it requires a 15 percent cut of the first million dollars a developer earns through Google. Now, the company has claimed that around 99 percent of apps would be eligible for a service fee of 15 percent or even less as the majority of apps on the Play Store are ad-based. It is pertinent to mention that South Korea had recently ruled that the tech giant must allow third-party payments. The company had agreed to comply and introduce third-party payments in its Play ecosystem. Recently, Google CEO Sunder Pichai recently emphasized the importance of Google Play revenue to the overall Android business model. “Google Play is the main source of revenue for the company as we don’t take any share on the sales of devices or other things,” he had said. Another big source of revenue for the company is in-app payments for games. The company is already in a legal battle with Epic Games over Fortnite. The company is also facing a lawsuit that has been filed by a coalition of 36 states attorneys. When asked to comment whether the move is in response to the regulatory pressure, Google said it has a long history of evolving. “We
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