google: Google to halve app subscription fee to 15%

Google is slashing the fees it takes from subscription services on its app store following pressure from developers and lawmakers. From Janaury 1, the Google Play Store will charge third-party subscription apps a 15% commission, the company said Thursday. Previously, subscription apps were charged 30% for the first year, then 15% thereafter. Google also charged 15% for the first $1 million in revenue. Google said it’s making the change because “customer churn makes it challenging for subscription businesses to benefit” from getting a discount in the second year. “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,” Sameer Samat, a VP at Google, said in a blog post The company also faces broader criticism that the Google and Apple app stores have grown too powerful and force developers to play by restrictive rules. Apple also charges 15% for subscriptions after the first year, but hasn’t lowered the cut from 30% in year one. Shares of subscription apps rallied on the news. Bumble and Match Group, two developers of dating services, gained as much as 11%. Music streaming giant Spotify rose 5%. Google Play apps that aren’t subscription-based will still have to share 30% of their revenue, but that drops to 15% for the first $1 million in revenue as well. Google says that 99% of developers qualify for a service fee of 15% or less.

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