Both Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOGL) now allow developers to keep 85 percent of all revenue earning via in-app subscriptions.
Right on, the heels of Apple announcing a new 85/15 App Store revenue sharing policy, competitor Google too said it will follow suit with a similar plan but with an added incentive.
As things stand right now, both Apple and Google will allow publishers to keep 85 percent of all revenue generated from in-app subscriptions. That makes for a generous enhancement over the 70/30 plan that is under effect so far.
However, while Apple has mandated those subscriptions need to be active for at least a year, Google has agreed to share as per the new rate structure right away without having to wait for a year. What that means is that publishers with Apple will keep on getting 70 percent share for all subscriptions for the first year with the higher 85 percent rate coming into effect only from the second year.
The new revenue policy can’t exactly be considered a new development. In fact, Google is already experimenting with it for almost a year now when it worked with video service providers to stream content to its Cast dongle. Apple is also known to have been working on it for some time as well.
However, the new revenue sharing plan from either Apple or Google does not include in-app purchases or anything that is bought outright via their respective app stores. Instead, it’s only applicable to any service users to which users subscribe. Whether the change will lead to a greater adoption of the subscription model by developers and publishers remains to be seen.
Google is allowing its developers to handle all the payment aspects on their own, something that requires being routed through the iTunes billing system at Apple. That, in turn, has also been a key sticking point among Apple developers as well.
Google is keen to see Play Store evolve as a viable long-term revenue source. For the Mountain View company, the lion’s share of its income is still dependent on ads, which again comes under increased pressure, first by the general shift in consumer preference towards mobiles followed by increased competition from companies like Facebook, which generates immense clout among the mobile-savvy users.
Apple, in turn, boasts of a more robust earnings via its App Store given that its users are known to be big spenders there.