Google lowers commissions on app subscriptions

Anne Freer | October 25, 2021

App Business

Google will lower commissions on its app subscriptions across the Play Store. It had already aligned with Apple to halve commission from 30% to 15% on the first $1 million developers earned.

Now, it will cap recurring subscription fees and instead of charging 15% from the second year and onwards, it charges 15% from day one.

This will apply to the vast majority of app developers and vertical apps inside the Play Media Experience Program will have their fees slashed even further to 10%.

The program includes apps such as ebooks and video and music streaming apps.

It was launched to encourage developers to build apps for Android.

Sameer Samat, VP of Product Management at Google explained that digital subscriptions had become one the fastest growing modes for developers to generate an income.

“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% to 15% 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,” he added.

Google said that the changes form part of conversations it held with large app developers but at the same time the company recognises that building apps now comes at much higher costs which makes a higher return all the more valuable.

The reduction has been praised by app makers such as Bumble and Duolingo.

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