Recode:
On Wednesday, Apple detailed major shake-ups coming to its powerful app store. Those include a new revenue-sharing model that would give developers more money when users subscribe to a service via their apps — instead of keeping 70 percent of all revenue generated from subscriptions, publishers will be able to keep 85 percent of revenue, once a subscriber has been paying for a year.
Now Google plans to up the ante at its app store: It will also move from a 70/30 split to 85/15 for subscriptions — but instead of requiring developers to hook a subscriber for 12 months before offering the better split, it will make it available right away.
Still trying to wrap my head around the logic of waiting 12 months before the 85/15 split locks in.
But why keep a 70/30 ratio on regular purchases if all subscriptions are 85/15 on day one? As a customer, I still prefer regular purchases, please don’t encourage too much the devs. to all go to the subscription model…
I think Apple has the numbers to show that most users don’t hang on for 12 months, so their cut drops when it doesn’t matter anymore. And they still get to look good for being flexible.
Because maybe it encourages long-term investment in an app’s development?
This seems like the correct answer to me. It may also be recognition of the fact that Apple’s biggest value-add is the initial matching of the customer with the app.
Not much risk for Google since everything I’ve read says that nobody pays for anything on Android anyway. I’m sure Google is making as much money pointing people to iOS apps as they are from Android developers.
i think apple’s thinking is — if they offered it Day 1, devs would be tempted to switch to subscription rather than up-front, because the split is better. but their rule has always been 30% and they dont want to lower that for everyone…so they just want to offer the 15% as an incentive for serious apps that last more than a year.
youve got it all wrong. its not about looking good. its about creating an incentive to be a quality subscription app that can last longer than 12 mos.
this incentive encourages higher quality apps.
Then why wait 12 months? Wouldn’t it be a better incentive to just charge less from the start? Google thinks so.
Devs are switching to subscription pricing for the steady stream of income. I think Apple is taking 30% for a year because they don’t want to let go of their steady income.
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Apple provides a service with the App Store of discoverability. That’s what they take their 30% cut for — giving your app a place to be seen. After you’ve hooked a user for a year, you’ve proven that you’ve made an app that users are already looking for. So Apple takes less of a cut, since that “discoverability” portion is gone. They take 15% to handle credit card processing and storing/selling/distributing/bug-testing your app.
i think that’s the theory.
Doesn’t the “Google cut” go to the Telco’s anyway? So all they are really doing is paying the mobile phone companies less.