Last Updated on 22/11/2021 by Sanskriti
Google said today that, beginning January 1, 2022, it would reduce the service cost for all subscriptions on Google Play to 15% from 30%, resulting in a 50% reduction in first-year subscription rates for developers selling subscriptions.
Sameer Samat, vice president, product management at Google, said in a blog post, “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. We’ve worked with our partners in dating, fitness, education, and other sectors to understand the nuances of their businesses. Our current service fee drops from 30 percent to 15 percent after 12 months of a recurring subscription. But we’ve heard that customer churn makes it challenging for subscription businesses to benefit from that reduced rate. So, we’re simplifying things to ensure they can.”
At present, the subscription charges are 30 percent for 12 months. But now it is lowered to 15 percent starting from day 1. Google introduced the Play Media Experience initiative earlier this year to encourage video, audio, and book creators to contribute to the Android platform’s growth by creating cross-device experiences. According to the firm’s blog post, this allowed developers to invest in these multi-screen experiences for a service cost as low as 15%.
E-books and on-demand music streaming services, whose content prices account for the majority of sales, will now be available for a service fee as low as ten percent, according to the tech giant.
“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. You can go here for more information,” the tech giant said.
Some of Google Play’s methods, such as commissions, have been a source of contention among Indian and international developers. It cut the fee for developers that generate $1 million in yearly in-app sales income in March. It said on July 1 that when developers generate their first $1 million in yearly income, it will reduce its 30% billing cost to 15%.
Since last year, Indian unicorns and start-ups have claimed that Google exploits its monopoly by imposing the billing system and taking a 30% fee on transactions. The Google Play Store’s billing mechanism was required for all apps that offered in-app purchases of digital items.
This, according to Google, isn’t something new, and it’s always been the case. Google Play billing had always charged a 30% fee on these transactions, according to the report. It argued at the time that this would only apply to only 3% of developers having applications on the Play Store because 97% of them don’t sell digital products in-app and so don’t need to use Play billing services.