Oct 21 (Reuters) - Alphabet Inc-owned Google said
on Thursday it is lowering the fee that subscription-based apps
need to pay Play Store to 15% right from day one, following
criticism about its fee structure from companies such as Spotify
Currently, developers pay a 30% subscription fee in the
first year, and 15% thereafter.
"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," Google said in a
The new structure will kick in from January next year and
likely encourage developers to switch from one-time payment
modes to subscriptions.
E-book companies and on-demand music streaming services,
which use most of their sales to pay for content costs, will now
be eligible for a service fee as low as 10%.
Google has come under fire from large firms such as
Microsoft Corp, Spotify Technology SA, as well as
startups and smaller companies, that allege the fees deprive
consumers of choices and push up app prices.
In March, Google had said it will cut the service fee it
charges developers on its app store by half on the first $1
million they earn in revenue in a year, a move similar to iPhone
maker Apple Inc.
(Reporting by Eva Mathews in Bengaluru; Editing by Devika