Google Play cuts subscription fee from 30% to 15% starting Jan 1, 2022

Google said today that starting on January 1, 2022, it will be decreasing the service fee for all subscriptions on Google Play to 15 per cent from 30 per cent, and for developers offering subscriptions, this means that first-year subscription fees will be cut in half.

"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 per cent to 15 per cent 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," said Sameer Samat, Vice President, Product Management at Google, in a blog post on Thursday. 

Google Play currently charges 30 per cent fees for subscription services after 12 months. Now this will be 15 per cent for subscription services from the first day. 

Earlier this year Google launched the Play Media Experience programme to encourage video, audio and book developers alike to help grow the Android platform by building cross-device experiences. This helped developers invest in these multi-screen experiences with a service fee as low as 15 per cent, the firm said in the blog post.

The tech giant further said e-books and on-demand music streaming services, where content costs account for the majority of sales, will now be eligible for a service fee as low as 10 per cent. 

"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," Samat added.

Some of Google Play's practices, like commissions, have been a contentious issue with developers in India and globally. In March, it lowered commission for developers when they make $1 million in annual revenue for in-app purchases. From July 1, it said it would slash its 30 per cent billing fee to 15 per cent for developers globally when they make the first $1 million of their annual revenue.

Since last year, Indian start-ups and unicorns have been claiming that Google abuses its monopoly, enforcing the billing system, and takes a 30 per cent commission on the transactions. All apps distributed on the Google Play Store, that were offering in-app purchases of digital goods, needed to use Google Play’s billing system.

 Google had said this wasn’t new and its payments policy has always required this. It had said Google Play billing had always taken a 30 per cent commission on these transactions. It said at the time this would only apply to less than 3 per cent of developers with apps on Play Store, as 97 per cent anyway don't offer in-app purchases of digital goods, and therefore don't need to use Play billing services.