Sameer Samat is Vice President, Product Management
When we built Android and Google Play more than a decade ago, we were also betting on a future: a free and open mobile ecosystem that could compete with the proprietary closed platforms that dominated the industry. We didn’t know what businesses would migrate to mobile or what apps would be successful. For simplicity, we used an easy-to-understand business model: the vast majority of developers can distribute their apps for free on Google Play (97% still do). For developers who offer paid apps or sell in-app digital goods (currently only 3% of developers fall into this category), we charge a flat 30% service fee. This model has made apps one of the fastest growing categories in software. In addition, we choose to offer the operating system for free, and continue to invest our fees in improvements and enhancements to Android and Play to ensure that device manufacturers around the world can use it for free.
When we first introduced Android to you, we never imagined that developers from around the world would bring such amazing new experiences to us with their innovation and creativity. As the ecosystem evolves, more diverse business models emerge to support various types of applications. We have made a number of important changes along the way, including moving away from the “one size fits all” service fee model to ensure success for all types of businesses. In order to support and encourage the diversification of the application ecosystem, we offer the diversification model instead of the simple model.
The result is that 99 per cent of developers are eligible for a 15 per cent service rate or less. We learned from and listened to developers in many industries and regions, including Anghami, AWA, Bumble, Calm, Duolingo, KADOKAWA, KKBOX, Picsart and Smule. We are here to announce further changes to our business model to further support the partner ecosystem, help them build sustainable businesses and ensure Play continues to lead the mobile app ecosystem.
Subscription fees are down to 15%
Digital subscriptions have become one of the fastest growing business models for developers, but we know that subscription businesses have special challenges in acquiring and retaining customers. We work with partners in the dating, fitness, education and other industries to delve into the nuances of their business. Currently, our service fee drops from 30% to 15% for 12-month subscriptions. We listened to feedback and learned that it was difficult for the subscription business to benefit from the reduced rates due to customer churn. So we’re simplifying our rates to make sure you’re growing your subscription business.
In order to support the specific needs of developers who offer subscription services, the service fee for all subscription services on Google Play will be reduced from 30% to 15% as of January 1, 2022, starting from day one.
For a developer offering a subscription service, this means the first year’s subscription fee will be cut in half. We’ve already received positive feedback on this change from our developer partners:
Partnering with Google has been a powerful catalyst for our business, helping us scale up and ultimately playing a key role in advancing the mission of empowering women around the world. Google’s fee changes will allow us to better invest in our products and further empower users to enter the online world with confidence.
— Whitney Wolfe Herd, Bumble Inc. Founder and CEO
Everyone learns differently, and every developer is different. We’re happy to see Google continue to work with the ecosystem to find a model that works for both developers and platforms. The reduced subscription fees will help Duolingo achieve its mission of popularizing language learning more efficiently.
— Luis von Ahn, co-founder and CEO of Duolingo
Better cross-platform experience
Apps are still very important to mobile phones. Today, great services must also be available on TVS, cars, watches, tablets and more. We recognize that now, more than ever, developers need to devote resources to building for these platforms.
Earlier this year, we launched the Play Media Experience program, which encourages video, audio, and book developers to power the Android platform by building great cross-device experiences. Developers who participate in the program can pay as little as 15 percent for building multi-screen experiences.
Now, we’re also announcing changes to our service fees for the Media Experience program to better accommodate differences across app categories. For e-book and on-demand music streaming services, where content costs make up the bulk of sales, app developers in those categories can now cut fees to 10 percent. The new fees align with the industry economics of the media content vertical and make Google Play better serve developers and the communities of artists, musicians and writers they represent. You can go to the official website for details.
We will continue to engage with developers to understand the challenges and opportunities they face and how we can do our best to support them in building sustainable businesses. This will also be at the heart of the Android Developer Summit on October 27-28 (Pacific Time), where you’ll learn more about the latest tools, apis, and technologies to help developers increase productivity and create better apps.
For more information about Google Play and its service fees, please visit the Play Administration Help page for faQs.