Google's subscription fee cut good move, but still a 'Lagaan': Industry

What developers are asking for is fairness, not benevolence in the form of "reduced" commission percentages, says digital alliance

While the industry largely welcomed Google’s decision to halve the subscription fee on the Google Play store, the Alliance of Digital India Foundation (ADIF) said it was a distraction tactic. 

"The fact that Google is able to unilaterally declare and dictate prices, as is evident from this announcement as well, lies at the heart of the issue. What developers are asking for is fairness and not benevolence in the form of “reduced” commission percentages. It has never been about the percentages. Price discovery should be left to the market forces. As long as Google gets to unilaterally dictate prices and people don’t have choices, it's still a Lagaan – be it 30, 15 or even 2, the percentages do not matter. Deflect and distract seems to be what's in play here. The portrayal and grandstanding, as a measure that fully acknowledges and addresses the concerns of developers, is misleading and objectionable,” said Sijo Kuruvilla George, Executive Director, ADIF, a think tank for digital startups in India. 

Google said Thursday that starting on January 1, 2022, it will be decreasing the service fee for all subscriptions on Google Play to 15 per cent from 30 per cent, and for developers offering subscriptions, this means that first-year subscription fees will be cut in half.

The tech giant further said e-books and on-demand music streaming services, where content costs account for the majority of sales, will now be eligible for a service fee as low as 10 per cent. 

"This is a good move that is favourable for developers. What is interesting to understand here is that these are unidirectional terms that can be altered any day by Google. We have to create an environment where there is true competition to protect developers and user interest, and the market determines the right commission. Even though it is a good temporary decision it is not going to solve the problem in the long term," said Rakesh Deshmukh, Co Founder and CEO, Indus OS.

Opoyi, which stands for OPinion Of You and I, offers a personalised feed of news and opinions and provides a platform for any contributor around the world to build their audiences, said the move was welcome. 

"This is a continuing and evolving conversation between platforms and developers on how to split the pie of consumer generated revenue. Regulators are participating in this conversation to create a structure that prevents platforms from abusing their monopolistic power," said Rajiv Bansal, Founder and CEO of Opoyi. 

Since Opoyi is a free personalised news and opinions platform, it is not directly impacted by revenue sharing agreements between platforms and developers. "That being said, we are a part of the wider media ecosystem where traditional media is moving heavily towards subscription based monetisation. As a result we are closely monitoring this evolving landscape," Bansal added.

ADIF said the announcement does not address the long-standing issues and challenges of developers who will be affected by the earlier announcement by Google of "forced adoption of their billing system by March 2022". 

Some of Google Play's practices, like commissions, have been a contentious issue with developers in India and globally. In March, it lowered commission for developers when they make $1 million in annual revenue for in-app purchases. From July 1, it said it would slash its 30 per cent billing fee to 15 per cent for developers globally when they make the first $1 million of their annual revenue.

Since last year, Indian start-ups and unicorns have been claiming that Google abuses its monopoly, enforcing the billing system, and takes a 30 per cent commission on the transactions. All apps distributed on the Google Play Store, that were offering in-app purchases of digital goods, needed to use Google Play’s billing system.

"The differential pricing system that Google is attempting to implement with this announcement is also unfair and arbitrary. As per the announced policy, different categories of apps would attract different tariffs while being provided exactly the same level of service. Moreover, such pricing structures would further distort market forces to the detriment of all," said ADIF.