There are thousands of developers around the world that are new in the business world and face struggle due to the 30 percent fee for their apps in the Google Play Store. For new developers, cutting 30 percent fee is a lot as compared to their annual revenue. So, Google has decided to bring down the fees from 30 percent to 15 percent for the developers whose annual revenue is less than $1 million. However, for the big developers, the fees will stay intact to 30 percent fees for putting their apps on Google Play Store.
This new amendment by Google will come into action from 1st July 2021. The new reduction in commission fees by Google will affect the new start-ups, individual developers, and boutique firms in a very positive way, says Manjunath Bhat, Senior Director Analyst, Gartner to The Indian Express. He also added that “It will have little to no impact on large established application development companies in India.” (The Indian Express)
Boosting Developer Success
Sameer Samat, Vice President of Product Management, Google has written in a blog post on 16th March 2021 about how Google appreciates helping new developers make a big and sustainable business. Google always looks forward to helping new brands establish and support them with powerful marketing tools. This is because building a brand from scratch and putting the app on the record is not a very easy task. He also mentioned that Google is constantly striving to help these new developers bring their innovative ideas into real life and “give them an added boost.”
He has specifically mentioned that the deduction of the commission fees from 30 percent to 15 percent is only for the first $1 million revenue earned by a developer each year. With the huge reduction in commission fees, around 99 percent of the total global developers will have a huge impact on their businesses. And, this amount of figure can be used by the developers to scale up their business, effective marketing implementations, hiring new employees, expanding geographically, etc.
Why cut the commission fees?
In an early-stage business, the investment is always high to set the business, hire people, create a position, and marketing. So, with the reduction in the commission fees, the developers will have a much stable early-stage start-up and open more doors for them to succeed. Google thinks that this is the first step on behalf of the company to help each and every developer out there. More details will be shared regarding this incentive in the upcoming months. Google Play and Android together are trying to build a better ecosystem thus scaling up to more business and uplifting the developers’ community. Moreover, small businesses contribute significantly to the GDP of a nation, hence if they start growing rapidly it will benefit the economy of the country.
Similar initiatives by Apple
Apple also took a similar initiative last year as the company brought the commission rate down to 15 percent from 30 percent as well. But, there is a difference in how Apple proceeded with the Apple Store Small Business Program. For the Apple Store, the reduction rate is only applicable to those who make less than $1 million a year in terms of annual sales. Once they start selling above $1 million, they have to pay the standard 30 percent fees. But, Google is considering a 50 percent reduction in commission fees on the first $1 million regardless of the total revenue earned by the developer.
In the last few months, both Google and Apple have come under big allegations because of their fees and other rules. It is true that these two tech giants control more or less the entire smartphone market and the tech industry. So, many developers have no option but to abide by the rules laid by these two companies. (The Indian Express). With the reduction rate in Google’s commission fees for Play Store, many people have made several positive comments on it.
For instance, Rajan Navani, Vice Chairman and Managing Director of JetSynthesys, said, “I think in a way it helps support the Indian ecosystem, especially the smaller developers.” He also added that “ It’s a good move because with new developers coming in, more companies will engage with citizens through digital payments.” The main target of taking this initiative is to give developers better chances to scale their business and overall democratizing access to Play Store in India.
Annasha Dey is an NIT student, who apart from studying engineering is also a content writer. She has a great interest in photography, writing, reading novels, and travelling as well. She is a foodie who loves socializing and hanging out with her friends. She is also a trained Kathak dancer and a big fashion enthusiast. Dey also loves watching TV series, which includes F.R.I.E.N.D.S. and Big Bang Theory. To be a better writer she prefers to read more