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Yeah, that is the real question. Google already has special deals for companies that lowers the 30% fee significantly. (I think even 2-3% fee is too much for

Yeah, that is the real question. Google already has special deals for companies that lowers the 30% fee significantly. (I think even 2-3% fee is too much for doing basically nothing, but that is another discussion).

bscphil 7y ago
> (I think even 2-3% fee is too much for doing basically nothing, but that is another discussion). My guess is that the play store fee works more like a tax on a closed ecosystem than a price for a service. For example, when the government needs to pay for a more expansive healthcare bill, they may decide it makes more economic sense (or is more politically viable) to raise the additional funding through a tax that doesn't go back to most of the people who receive the benefits. So maybe they raise capital gains taxes, etc. Likewise, while Google is an ads company, and running Android does benefit them some in that regard (e.g. ecosystem lockin), they're not running it as a charity. Android being given away for free, and many phones being subsidized, both benefit a lot of people, and because Google has more or less complete control of the market, they've decided the best way to pay for it is to tax the Play store, instead of charging those people for the benefit. They important thing I'm trying to point out here is that they could do it differently - they could charge for Android, or require subscriptions to use more of their services, but they've decided the best way to monetize is through the store. In this case, the question of whether the fee is "reasonable" for what Google provides to app developers isn't quite as significant as it would be were Google simply providing a product on the free market. But in this case I suspect you're both right, anyway, and this likely has more to do with data collection.
- microcolonel 7y ago
  > a tax on a closed ecosystem It's not a closed ecosystem anyway, I think. As far as I can tell, all the devices that officially have Google Play, also allow other applications to install APKs; now in a very fine-grained and straightforward way (as of Android 9).
maccard 7y ago
Google certainly aren't doing nothing - 30% includes hosting, bandwidth, patching, some amount of marketing, payments, fraud. Whether it's worth 30% is a different discussion, but to say they provide no value is just sily.
- kzrdude 7y ago
  And app review and oversight
  - shiftpgdn 7y ago
    Don't kid yourself. The Google play store is absolutely jammed full of malware and scam apps.
    - andybak 7y ago
      However they spend a considerable amount of money trying to stop those. It's fairly irrelevant to the preceding poster's point whether they succeed or not.
      - pmart123 7y ago
        It seems like an incumbent app should would likely want app stores to suffer from a lack of policing and degradation, whether they are paying 3%, 5%, or 30%. The less app stores are trusted for safety, the lower the friction there is to just use the established Netflix, Tinder, or Spotify app.
      - pbhjpbhj 7y ago
        How much? What percentage of their 30% take do you think they're spending? <1% ?
      - danShumway 7y ago
        No, how much money or effort Google spends is irrelevant to the value they provide. If Google came up with a magical technique to get rid of all malware on their app store that didn't cost them a dime, you could still argue that they're adding value to justify the 30% cut. If Google spends a billion dollars to get rid of all the malware on their app store, and it doesn't work, and using the app store is not significantly less dangerous than sideloading apps, then they're not adding any value to justify the 30% cut. Note that I don't think Google's efforts are completely fruitless. At the very least, they seem to help with taking down duplicate apps, and that's something. But whether or not moderation is valuable only depends on whether they succeed or not -- their effort is irrelevant.
Retric 7y ago
2% would likely not cover credit card transaction fees let alone their other costs. Even low transaction fees generally look like 2% + 10c. Making the situation even worse for 1$ apps. On top of that they need to pay for development, hosting, fraud detection etc. The ecosystem may be better off with something like 20c + 20% transaction fees. But, a flat percentage needs to be surprisingly high just to breakeven.
- panpanna 7y ago
  I highly doubt Google is paying 2% per transaction to Visa.
  - pcr0 7y ago
    There are a lot of credit cards that offer cashback rates between 1-2%. I'm certain Visa is not eating that so Google (and other merchants) must be paying.
    - snuxoll 7y ago
      Most credit card companies also get paid a lot of money in interest, it’s not like they rely solely on interchange fees for rewards programs. Yes, you shouldn’t float a balance on your card - but the average person often does.
  - sidlls 7y ago
    Don't know why you're being downvoted: Google had immense bargaining power with Visa (and the others). It might be a stretch to say they aren't paying 2%, but it's unlikely they're paying 3-5% + $0.30 flat per transaction (typical fees for small merchants going through a merchant bank payment processor, PayPal, etc.)
    - leesalminen 7y ago
      They certainly won’t be paying less than interchange though which in my world averages 2.35%
onetimemanytime 7y ago
My guess: probably 5% is cost, staff to review, maintain ecosystem, credit card fees, customer support etc etc.
tomcam 7y ago
How do you handle support and fraud issues for less than 2%?
- callalex 7y ago
  With google the answer seems to be “what support??”
  - muro 7y ago
    For example the support you contact to get your money back if the app doesn't work. I did that and support did return my money. It was a long time ago, maybe now that's automatic with refunds within 15 mins or what it is.
makkesk8 7y ago
> (I think even 2-3% fee is too much for doing basically nothing, but that is another discussion). Yea 2% fee is too much because bandwidth is free.
on_and_off 7y ago
>doing basically nothing Handling publication, payments, giving exposure and direct access via the play store, approving the apps, rejecting impersonations, the play store platform actually does a lot of stuff. I agree that a 30% fee is a lot and probably way too much, but claiming that they do nothing is just ridiculous.
jayd16 7y ago
If it's that easy, Amazon's store would be doing very well but it's simply not that easy.
julian_digital 7y ago
"Google already has special deals for companies that lowers the 30% fee significantly." Source?

bscphil 7y ago

> (I think even 2-3% fee is too much for doing basically nothing, but that is another discussion). My guess is that the play store fee works more like a tax on a closed ecosystem than a price for a service. For example, when the government needs to pay for a more expansive healthcare bill, they may decide it makes more economic sense (or is more politically viable) to raise the additional funding through a tax that doesn't go back to most of the people who receive the benefits. So maybe they raise capital gains taxes, etc. Likewise, while Google is an ads company, and running Android does benefit them some in that regard (e.g. ecosystem lockin), they're not running it as a charity. Android being given away for free, and many phones being subsidized, both benefit a lot of people, and because Google has more or less complete control of the market, they've decided the best way to pay for it is to tax the Play store, instead of charging those people for the benefit. They important thing I'm trying to point out here is that they could do it differently - they could charge for Android, or require subscriptions to use more of their services, but they've decided the best way to monetize is through the store. In this case, the question of whether the fee is "reasonable" for what Google provides to app developers isn't quite as significant as it would be were Google simply providing a product on the free market. But in this case I suspect you're both right, anyway, and this likely has more to do with data collection.

microcolonel 7y ago
> a tax on a closed ecosystem It's not a closed ecosystem anyway, I think. As far as I can tell, all the devices that officially have Google Play, also allow other applications to install APKs; now in a very fine-grained and straightforward way (as of Android 9).

maccard 7y ago

Google certainly aren't doing nothing - 30% includes hosting, bandwidth, patching, some amount of marketing, payments, fraud. Whether it's worth 30% is a different discussion, but to say they provide no value is just sily.

kzrdude 7y ago
And app review and oversight
- shiftpgdn 7y ago
  Don't kid yourself. The Google play store is absolutely jammed full of malware and scam apps.
  - andybak 7y ago
    However they spend a considerable amount of money trying to stop those. It's fairly irrelevant to the preceding poster's point whether they succeed or not.
    - pmart123 7y ago
      It seems like an incumbent app should would likely want app stores to suffer from a lack of policing and degradation, whether they are paying 3%, 5%, or 30%. The less app stores are trusted for safety, the lower the friction there is to just use the established Netflix, Tinder, or Spotify app.
    - pbhjpbhj 7y ago
      How much? What percentage of their 30% take do you think they're spending? <1% ?
    - danShumway 7y ago
      No, how much money or effort Google spends is irrelevant to the value they provide. If Google came up with a magical technique to get rid of all malware on their app store that didn't cost them a dime, you could still argue that they're adding value to justify the 30% cut. If Google spends a billion dollars to get rid of all the malware on their app store, and it doesn't work, and using the app store is not significantly less dangerous than sideloading apps, then they're not adding any value to justify the 30% cut. Note that I don't think Google's efforts are completely fruitless. At the very least, they seem to help with taking down duplicate apps, and that's something. But whether or not moderation is valuable only depends on whether they succeed or not -- their effort is irrelevant.

Retric 7y ago

2% would likely not cover credit card transaction fees let alone their other costs. Even low transaction fees generally look like 2% + 10c. Making the situation even worse for 1$ apps. On top of that they need to pay for development, hosting, fraud detection etc. The ecosystem may be better off with something like 20c + 20% transaction fees. But, a flat percentage needs to be surprisingly high just to breakeven.

panpanna 7y ago
I highly doubt Google is paying 2% per transaction to Visa.
- pcr0 7y ago
  There are a lot of credit cards that offer cashback rates between 1-2%. I'm certain Visa is not eating that so Google (and other merchants) must be paying.
  - snuxoll 7y ago
    Most credit card companies also get paid a lot of money in interest, it’s not like they rely solely on interchange fees for rewards programs. Yes, you shouldn’t float a balance on your card - but the average person often does.
- sidlls 7y ago
  Don't know why you're being downvoted: Google had immense bargaining power with Visa (and the others). It might be a stretch to say they aren't paying 2%, but it's unlikely they're paying 3-5% + $0.30 flat per transaction (typical fees for small merchants going through a merchant bank payment processor, PayPal, etc.)
  - leesalminen 7y ago
    They certainly won’t be paying less than interchange though which in my world averages 2.35%

onetimemanytime 7y ago

My guess: probably 5% is cost, staff to review, maintain ecosystem, credit card fees, customer support etc etc.

tomcam 7y ago

How do you handle support and fraud issues for less than 2%?

callalex 7y ago
With google the answer seems to be “what support??”
- muro 7y ago
  For example the support you contact to get your money back if the app doesn't work. I did that and support did return my money. It was a long time ago, maybe now that's automatic with refunds within 15 mins or what it is.

makkesk8 7y ago

> (I think even 2-3% fee is too much for doing basically nothing, but that is another discussion). Yea 2% fee is too much because bandwidth is free.

on_and_off 7y ago

>doing basically nothing Handling publication, payments, giving exposure and direct access via the play store, approving the apps, rejecting impersonations, the play store platform actually does a lot of stuff. I agree that a 30% fee is a lot and probably way too much, but claiming that they do nothing is just ridiculous.

jayd16 7y ago

If it's that easy, Amazon's store would be doing very well but it's simply not that easy.

julian_digital 7y ago

"Google already has special deals for companies that lowers the 30% fee significantly." Source?