Google today announced a major change to the revenue-sharing structure of Google Play apps – one that could significantly change the fortunes of independent developers or small businesses relying on the Android platform’s app store.
As of July 1, Google will cut Google Play’s first annual Google Play revenue by Google Play, earning a developer. It has decreased from previously 30 percent. The 30 percent figure still applies to all revenues of more than $ 1 million each year.
Google claims that 99 percent of developers with apps and content on Google Play will experience a 50 percent reduction in fees to Google.
At first glance, it looks like a similar agreement with what Apple announced late last year when they announced that developers earning less than $ 1 million would soon pay only 15 percent to the platform rather than the historic 30 percent. But it’s actually different in a way that can result for many developers; it’s probably a little more spacious.
This is because Apple is applying its 15 percent lower rate to a developer until the developer exceeds $ 1 million in revenue in a given year. At that point, the higher percentage of 30 percent is applied to all of the developer’s earnings. Google still charges 15 percent on the first million, even if the developer earns $ 5 million. In the Google model, a developer earning $ 1.2 million on an app pays 15% on $ 1 million and then 30% on $ 200,000. In Apple’s, a developer earns $ 800,000 forks over 15% on the amount, but if they earn $ 1.2 million, they pay 30% on all $ 1.2 million, not just $ 200,000.
To that end, the author of Google’s blog post for developers (Product Management VP Sameer Samat) claims that developers who raise $ 2 million, $ 5 million and “even $ 10 million” annually told Google that this change is a difference will make their businesses more sustainable, even though they earn significantly more than $ 1 million. After all, an extra 15 percent of $ 1 million is $ 150,000, which is not a small amount of money for the largest and most successful companies.
However, this change is probably not entirely born of altruism. In the first place, Google almost directly matches Apple’s offer to developers, as the App Store and Google Play compete directly. Apple and Google are also subject to antitrust lawsuits and investigations into their grip on their respective application markets. Like Apple with the App Store, Google requires app developers to use its own payment system for apps on Play, making it difficult to circumvent these fees.
Although the fees themselves are not usually the primary topic of investigations and lawsuits, the change improves the optics and sentiment for the two technology giants while they are under siege, and it does so without costing them much money. The vast majority of the revenue that Apple and Google derive from their application markets comes from programs with revenue of more than $ 1 million per year.