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Google will consider lowering Play Store cut to 15% for certain apps

162 points by Pandabob 5y ago

Pandabob 5y ago
More on this from The Verge [0]. [0]: https://www.theverge.com/2021/6/24/22547934/google-play-app-store-fee-15-percent-movies-tv-books-audio https://www.theverge.com/2021/6/24/22547934/google-play-app-...
jonplackett 5y ago
certain apps = free apps?
mkl95 5y ago
This change will be made effective on July 1. > The service fee for each developer will be 15% for the first $1M (USD) of earnings you make each year when you sell digital goods or services. * * https://support.google.com/googleplay/android-developer/answer/10632485 https://support.google.com/googleplay/android-developer/answ...
- tonyedgecombe 5y ago
  It's unusual to pay higher fees the more you sell. This is probably an indication that Google/Apple make most of their App Store profits from a small number of big developers.
  - konschubert 5y ago
    It's an indication of a monopoly with a lack of competitive pressure.
  - DeusExMachina 5y ago
    It's not that unusual actually. Think of all the Saas apps that charge you by tier based on some arbitrary limits. Sure, in those cases you consume more resources, but those are probably negligible compared to the increase in price. The reality is that they charge you more because you make more money from the service, hence you are willing to pay. It's not precisely the same, obviously. For one, you can chose the services you want, while you must go through Apple's App Store. And since they don't charge a percentage of revenue but charge for resources, you don't see the correlation. But the final effect is the same. The more money you make, the more you pay.
    - rplnt 5y ago
      No, in most SaaS environments bigger customers are more expensive to maintain. They are harder to shard or migrate when you need to keep their data accessible, linked, etc... That's why there are limits in the first place and the don't really have to be arbitrary.
      - realityking 5y ago
        I don’t know about most. Value based pricing is common concept in SaaS and it explicitly doesn’t price based on the cost of delivering the service. That said, a lot of higher tier offerings in SaaS differentiate themselves by SLAs, Support, assigned CSM, consulting time, etc. Those are cheap-iah to deliver when everything goes well but can cost a lot when there are problems.
  - Dobbs 5y ago
    Back when Apple announced this there was a good discussion about it on Accidental Tech Podcast, about how this was a really smart move. It gives a price cut to the most number of people, but requires Apple to give the least amount of money away. This gives them really good press, and helps them to deal with their "image issues" that they have at the moment. Basically a win win.
    - YetAnotherNick 5y ago
      The stranger thing is for small apps Apple/Google is providing services of more than 30% I think. Basically they are managing everything and a lot of time also promoting it for a small price. But the apps that are already famous like fortnite, a user who install it will likely install if Apple/Google is not involved.
- cwkoss 5y ago
  Awesome and rare to see a progressive fee structure
sneak 5y ago
Why is there no meaningful competition in app stores for android where sideloading is possible?
- njibhu 5y ago
  I'm not really answering your question here, but sideloading allow alternatives with different goals than google play. For example F-Droid is actually very big particularly with users trying to get rid of google services on their phones. But it's a marketplace for opensource apps and services, which most commercial apps are not.
  - lorlou 5y ago
    F-Droid architecture is terrible (it could take them weeks to build an app, and since they build all apps updates are severely delayed) and their app is a buggy mess. In other words, F-Droid not being widely used is not an indication of people not wanting to use a third party store per se even if it only carries open source apps.
    - pverghese 5y ago
      Now we know the benefits that the google playstore provides.
    - kuschku 5y ago
      You can host your own fdroid repos and use Aurora Droid as client instead. e.g. Quasseldroid is distributed that way. The result is an awesome store UI, instantly deployed updates, and independence from the Play Store. The only disadvantage is that, because it's not preinstalled, no one knows about it.
      - lorlou 5y ago
        People want a plug and play solution, not to have to research F-Droid client alternatives and then install third party repos which they don't know if they can trust.
etothepii 5y ago
When every moderately successful app is launched in a separate company will Google say, "it's the rules that are broken there's nothing wrong with lowering your play store liability by following the rules."
- HuangYuSan 5y ago
  best comment
ge0rg 5y ago
All their announcements read like fees will be automatically reduced to 15% for the first 1M$, and even the linked article implies that: Starting July 1, 2021, the service fee for each developer will be 15% for the first $1M (USD) of earnings you make each year when you sell digital goods or services. However, when you read on, you realize that it's an opt-in that you need to take action on: To officially enroll for the 15% service fee tier, you must: [list of requirements and steps]
- ge0rg 5y ago
  From https://play.google.com/console/developers/paymentssettings https://play.google.com/console/developers/paymentssettings : Create an account group to help us understand if there are any other developer accounts that you're associated with. We'll use this information to make sure that you're eligible for Google Play developer programs and services, such as the 15% service fee. This looks like a fully arbitrary requirement that has nothing to do with the 15% fee and everything with Google collecting as much data as it can get away with.
  - michaelt 5y ago
    Isn't this just saying "No creating 10 developer accounts to get the discount on $10M of earnings instead of $1M" ? Small business discounts are very vulnerable to abuse - when the UK introduced a tax break on the first £X of employee salaries, giant corporations like G4S shifted their employees to work for 48,000 new "small businesses", each with a handful of employees, to claim the tax break 48,000 times.
    - ge0rg 5y ago
      Indeed, after working through the new bureaucracy, I've come to this realization as well. But the quoted wording isn't really helpful to realize that.
    - clusterfish 5y ago
      Well... Did they send an email about this change to every app developer, or not? That would be telling.
ehnto 5y ago
That's such a large cut, I just don't think the Play Store provides nearly that much value. It's also a bit of a strong-armed position anyway, so the fee feels even more disproportionate. You only have to pay them because they've cultivated a mono-store environment for android phones.
- sidlls 5y ago
  The play store provides basically no value at all, not even the marginal value Apple's App Store provides.
  - wpdev_63 5y ago
    You're saying that the development tools, backend hosting, and other play services provide no value to developers? I disagree but at the same time google has been doing a less than great at promoting android apps and helping developers monetize their apps. Atleast compared to apple.
saurik 5y ago
Large customers normally have lots of leverage: "if you don't give me a good deal, I will take my business elsewhere". I run an alternative to the Apple App Store for jailbroken iOS devices (Cydia); and, when I have sold software (which I did "at scale" for a decade) I absolutely was forced to cut deals--sometimes ones extremely lucrative for the developer--to keep the business of my largest clients from not only listing their products (which notably were generally ineligible, for technical reasons as opposed to content ones, from being available in the official App Store) with competing stores or even merely accepting payments themselves, but actively building their own competing stores! Think about it: if you are paying a hefty percentage of your revenue to someone else in fees--and are doing enough volume (as you are a large customer)--you can afford to hire an entire team to work on this problem as the App Store is in no way "magic" or anything... at which point you "may as well" offer the service to others in an attempt to cut the margins of your prior fee recipient. It should be the small customers who generally tolerate the (on a percentage basis) higher fees, as they are willing to pay a potentially "hefty cut" for the privilege of using an off-the-shelf, integrated solution that users trust, as the absolute cost of that larger cut is small, and is thereby unlikely to be large enough to make sense expending a bunch of effort building (and marketing) a bespoke solution (that users might not trust anyway); but if you aren't having to fight for the larger customers, something distorted is happening: that Apple and Google (both, which might be surprising to some but maybe less if you read Epic's lessor-known lawsuit against Google surrounding anticompetitive moves Google has taken--and maybe are now attempting to address, but only now--to lock in their Play Store) feel able to specifically squeeze their largest customers with seemingly no ramification is a testament to the power they possess to control and direct the relevant markets from their respective positions.
- ericmay 5y ago
  Sure, but it’s important to note that over time both companies have carved out special deals and considerations for larger customers. You can read this for yourself in the news and numerous court proceedings where emails have been released showing the companies having these exact discussions. It’s a bit contentious but it appears Epic itself tried to get a special deal from Apple [1]. Why would you even bother asking if they don’t negotiate or cut deals with different app vendors? Apple (and maybe Google idk) even changed/lowered pricing for certain app categories because of developer complaints. [1] https://techcrunch.com/2020/08/21/apple-contends-epics-ban-was-a-self-inflicted-prelude-to-gaming-the-app-store/ https://techcrunch.com/2020/08/21/apple-contends-epics-ban-w...
f6v 5y ago
Is Epic games happy now?
- josefx 5y ago
  Others mention that this only applies to the first million earned, so Epic would be back at the full charge within a short time.
  - f6v 5y ago
    EPIC gave an impression they were fighting for fairness.
fnord77 5y ago
too late - the knives are out. app store monopolies will be broken up.
- canada2us 5y ago
  Agree. The big companies like Google are really greedy. Can they just lower the fees when they make way more than enough money? No, they don't. They just keep making more and more money, seeing economic inequality becomes more and more a serious problem. It's just against social good.
avipars 5y ago
I thought they lowered it already
- joshstrange 5y ago
  Yeah, I'm also confused as I was pretty sure this happened 3 months ago [0] [0] https://news.ycombinator.com/item?id=26486737 https://news.ycombinator.com/item?id=26486737
bogwog 5y ago
Cool! And when they do finally get hit with a healthy dose of antitrust regulation, they'll be forced to lower the fee (even more than this) for everyone in order to stay competitive.
nomdep 5y ago
Context: US Congress is discussing a bill that will force Play Store to act like a platform (meaning no cut at all if you choose to use another form of payment) https://world.hey.com/dhh/here-comes-the-law-eb302a46 https://world.hey.com/dhh/here-comes-the-law-eb302a46
heavyset_go 5y ago
This is just more evidence of price fixing[1] by the mobile app distribution and app payments cartel[2] consisting of Apple and Google. [1] https://en.wikipedia.org/wiki/Price_fixing https://en.wikipedia.org/wiki/Price_fixing [2] https://en.wikipedia.org/wiki/Cartel https://en.wikipedia.org/wiki/Cartel
- ribosometronome 5y ago
  Your citations appear to be links to definitions rather than evidence of price fixing by a cartel. Oops?
ilaksh 5y ago
I always say things like this and get downvotes without comment, but here goes. This is a place where decentralization has a role to play. Things like cryptocurrencies and content-centric networking, databases and search. In my opinion it should be possible to create an app store that actually isn't owned by any particular company but runs on a large network of peers and uses payments in cryptocurrency.
natpalmer1776 5y ago
Is nobody else bothered by the fact that it took impending government intervention to cause a change in practices? To me it raises all sorts of questions as to their profit margins, anti-competitive practices, and what the money they're sucking would have done for the other smaller businesses that actually wrote the apps they're profiting off of. When things get this "bad", it seems indicative of a market disorder. There is an imbalance that can't simply be solved via raising capital to start a competing service. The degree of vertical integration in the mobile device market makes supplanting their position all but impossible.
- echelon 5y ago
  Demand web installs. Frictionless web installs without scary warnings that serve to make people distrust the web. People get into cars and use the web everyday. They don't need Apple or Google branded Floaties® for Computing. Tell your legislators.

162 points by Pandabob 5y ago

More on this from The Verge [0]. [0]: https://www.theverge.com/2021/6/24/22547934/google-play-app-store-fee-15-percent-movies-tv-books-audio https://www.theverge.com/2021/6/24/22547934/google-play-app-...

jonplackett 5y ago

certain apps = free apps?

mkl95 5y ago

This change will be made effective on July 1. > The service fee for each developer will be 15% for the first $1M (USD) of earnings you make each year when you sell digital goods or services. * * https://support.google.com/googleplay/android-developer/answer/10632485 https://support.google.com/googleplay/android-developer/answ...

tonyedgecombe 5y ago
It's unusual to pay higher fees the more you sell. This is probably an indication that Google/Apple make most of their App Store profits from a small number of big developers.
- konschubert 5y ago
  It's an indication of a monopoly with a lack of competitive pressure.
- DeusExMachina 5y ago
  It's not that unusual actually. Think of all the Saas apps that charge you by tier based on some arbitrary limits. Sure, in those cases you consume more resources, but those are probably negligible compared to the increase in price. The reality is that they charge you more because you make more money from the service, hence you are willing to pay. It's not precisely the same, obviously. For one, you can chose the services you want, while you must go through Apple's App Store. And since they don't charge a percentage of revenue but charge for resources, you don't see the correlation. But the final effect is the same. The more money you make, the more you pay.
  - rplnt 5y ago
    No, in most SaaS environments bigger customers are more expensive to maintain. They are harder to shard or migrate when you need to keep their data accessible, linked, etc... That's why there are limits in the first place and the don't really have to be arbitrary.
    - realityking 5y ago
      I don’t know about most. Value based pricing is common concept in SaaS and it explicitly doesn’t price based on the cost of delivering the service. That said, a lot of higher tier offerings in SaaS differentiate themselves by SLAs, Support, assigned CSM, consulting time, etc. Those are cheap-iah to deliver when everything goes well but can cost a lot when there are problems.
- Dobbs 5y ago
  Back when Apple announced this there was a good discussion about it on Accidental Tech Podcast, about how this was a really smart move. It gives a price cut to the most number of people, but requires Apple to give the least amount of money away. This gives them really good press, and helps them to deal with their "image issues" that they have at the moment. Basically a win win.
  - YetAnotherNick 5y ago
    The stranger thing is for small apps Apple/Google is providing services of more than 30% I think. Basically they are managing everything and a lot of time also promoting it for a small price. But the apps that are already famous like fortnite, a user who install it will likely install if Apple/Google is not involved.
cwkoss 5y ago
Awesome and rare to see a progressive fee structure

sneak 5y ago

Why is there no meaningful competition in app stores for android where sideloading is possible?

njibhu 5y ago
I'm not really answering your question here, but sideloading allow alternatives with different goals than google play. For example F-Droid is actually very big particularly with users trying to get rid of google services on their phones. But it's a marketplace for opensource apps and services, which most commercial apps are not.
- lorlou 5y ago
  F-Droid architecture is terrible (it could take them weeks to build an app, and since they build all apps updates are severely delayed) and their app is a buggy mess. In other words, F-Droid not being widely used is not an indication of people not wanting to use a third party store per se even if it only carries open source apps.
  - pverghese 5y ago
    Now we know the benefits that the google playstore provides.
  - kuschku 5y ago
    You can host your own fdroid repos and use Aurora Droid as client instead. e.g. Quasseldroid is distributed that way. The result is an awesome store UI, instantly deployed updates, and independence from the Play Store. The only disadvantage is that, because it's not preinstalled, no one knows about it.
    - lorlou 5y ago
      People want a plug and play solution, not to have to research F-Droid client alternatives and then install third party repos which they don't know if they can trust.

etothepii 5y ago

When every moderately successful app is launched in a separate company will Google say, "it's the rules that are broken there's nothing wrong with lowering your play store liability by following the rules."

HuangYuSan 5y ago
best comment

ge0rg 5y ago

All their announcements read like fees will be automatically reduced to 15% for the first 1M$, and even the linked article implies that: Starting July 1, 2021, the service fee for each developer will be 15% for the first $1M (USD) of earnings you make each year when you sell digital goods or services. However, when you read on, you realize that it's an opt-in that you need to take action on: To officially enroll for the 15% service fee tier, you must: [list of requirements and steps]

ge0rg 5y ago
From https://play.google.com/console/developers/paymentssettings https://play.google.com/console/developers/paymentssettings : Create an account group to help us understand if there are any other developer accounts that you're associated with. We'll use this information to make sure that you're eligible for Google Play developer programs and services, such as the 15% service fee. This looks like a fully arbitrary requirement that has nothing to do with the 15% fee and everything with Google collecting as much data as it can get away with.
- michaelt 5y ago
  Isn't this just saying "No creating 10 developer accounts to get the discount on $10M of earnings instead of $1M" ? Small business discounts are very vulnerable to abuse - when the UK introduced a tax break on the first £X of employee salaries, giant corporations like G4S shifted their employees to work for 48,000 new "small businesses", each with a handful of employees, to claim the tax break 48,000 times.
  - ge0rg 5y ago
    Indeed, after working through the new bureaucracy, I've come to this realization as well. But the quoted wording isn't really helpful to realize that.
  - clusterfish 5y ago
    Well... Did they send an email about this change to every app developer, or not? That would be telling.

ehnto 5y ago

That's such a large cut, I just don't think the Play Store provides nearly that much value. It's also a bit of a strong-armed position anyway, so the fee feels even more disproportionate. You only have to pay them because they've cultivated a mono-store environment for android phones.

sidlls 5y ago
The play store provides basically no value at all, not even the marginal value Apple's App Store provides.
- wpdev_63 5y ago
  You're saying that the development tools, backend hosting, and other play services provide no value to developers? I disagree but at the same time google has been doing a less than great at promoting android apps and helping developers monetize their apps. Atleast compared to apple.

saurik 5y ago

Large customers normally have lots of leverage: "if you don't give me a good deal, I will take my business elsewhere". I run an alternative to the Apple App Store for jailbroken iOS devices (Cydia); and, when I have sold software (which I did "at scale" for a decade) I absolutely was forced to cut deals--sometimes ones extremely lucrative for the developer--to keep the business of my largest clients from not only listing their products (which notably were generally ineligible, for technical reasons as opposed to content ones, from being available in the official App Store) with competing stores or even merely accepting payments themselves, but actively building their own competing stores! Think about it: if you are paying a hefty percentage of your revenue to someone else in fees--and are doing enough volume (as you are a large customer)--you can afford to hire an entire team to work on this problem as the App Store is in no way "magic" or anything... at which point you "may as well" offer the service to others in an attempt to cut the margins of your prior fee recipient. It should be the small customers who generally tolerate the (on a percentage basis) higher fees, as they are willing to pay a potentially "hefty cut" for the privilege of using an off-the-shelf, integrated solution that users trust, as the absolute cost of that larger cut is small, and is thereby unlikely to be large enough to make sense expending a bunch of effort building (and marketing) a bespoke solution (that users might not trust anyway); but if you aren't having to fight for the larger customers, something distorted is happening: that Apple and Google (both, which might be surprising to some but maybe less if you read Epic's lessor-known lawsuit against Google surrounding anticompetitive moves Google has taken--and maybe are now attempting to address, but only now--to lock in their Play Store) feel able to specifically squeeze their largest customers with seemingly no ramification is a testament to the power they possess to control and direct the relevant markets from their respective positions.

ericmay 5y ago
Sure, but it’s important to note that over time both companies have carved out special deals and considerations for larger customers. You can read this for yourself in the news and numerous court proceedings where emails have been released showing the companies having these exact discussions. It’s a bit contentious but it appears Epic itself tried to get a special deal from Apple [1]. Why would you even bother asking if they don’t negotiate or cut deals with different app vendors? Apple (and maybe Google idk) even changed/lowered pricing for certain app categories because of developer complaints. [1] https://techcrunch.com/2020/08/21/apple-contends-epics-ban-was-a-self-inflicted-prelude-to-gaming-the-app-store/ https://techcrunch.com/2020/08/21/apple-contends-epics-ban-w...

f6v 5y ago

Is Epic games happy now?

josefx 5y ago
Others mention that this only applies to the first million earned, so Epic would be back at the full charge within a short time.
- f6v 5y ago
  EPIC gave an impression they were fighting for fairness.

fnord77 5y ago

too late - the knives are out. app store monopolies will be broken up.

canada2us 5y ago
Agree. The big companies like Google are really greedy. Can they just lower the fees when they make way more than enough money? No, they don't. They just keep making more and more money, seeing economic inequality becomes more and more a serious problem. It's just against social good.

avipars 5y ago

I thought they lowered it already

joshstrange 5y ago
Yeah, I'm also confused as I was pretty sure this happened 3 months ago [0] [0] https://news.ycombinator.com/item?id=26486737 https://news.ycombinator.com/item?id=26486737

bogwog 5y ago

Cool! And when they do finally get hit with a healthy dose of antitrust regulation, they'll be forced to lower the fee (even more than this) for everyone in order to stay competitive.

nomdep 5y ago

Context: US Congress is discussing a bill that will force Play Store to act like a platform (meaning no cut at all if you choose to use another form of payment) https://world.hey.com/dhh/here-comes-the-law-eb302a46 https://world.hey.com/dhh/here-comes-the-law-eb302a46

heavyset_go 5y ago

This is just more evidence of price fixing[1] by the mobile app distribution and app payments cartel[2] consisting of Apple and Google. [1] https://en.wikipedia.org/wiki/Price_fixing https://en.wikipedia.org/wiki/Price_fixing [2] https://en.wikipedia.org/wiki/Cartel https://en.wikipedia.org/wiki/Cartel

ribosometronome 5y ago
Your citations appear to be links to definitions rather than evidence of price fixing by a cartel. Oops?

ilaksh 5y ago

I always say things like this and get downvotes without comment, but here goes. This is a place where decentralization has a role to play. Things like cryptocurrencies and content-centric networking, databases and search. In my opinion it should be possible to create an app store that actually isn't owned by any particular company but runs on a large network of peers and uses payments in cryptocurrency.

natpalmer1776 5y ago

Is nobody else bothered by the fact that it took impending government intervention to cause a change in practices? To me it raises all sorts of questions as to their profit margins, anti-competitive practices, and what the money they're sucking would have done for the other smaller businesses that actually wrote the apps they're profiting off of. When things get this "bad", it seems indicative of a market disorder. There is an imbalance that can't simply be solved via raising capital to start a competing service. The degree of vertical integration in the mobile device market makes supplanting their position all but impossible.

echelon 5y ago
Demand web installs. Frictionless web installs without scary warnings that serve to make people distrust the web. People get into cars and use the web everyday. They don't need Apple or Google branded Floaties® for Computing. Tell your legislators.