Google Matches Apple's Plan To Give Developers A Bigger Cut of The Revenue (recode.net)

An anonymous reader writes from a report via Recode: Apple announced a new revenue sharing model on Wednesday 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. Google has decided to match Apple's latest offering. It too will move from a 70/30 split to a 85/15 split for subscriptions. However, instead of requiring developers to hook a subscriber for 12 months before offering the better split, it will make it available right away. Sources have said Google has been testing the new model over a year ago with video services in a way to get Play subscriptions to work with its TV streaming offerings like the Chromecast. Google has yet to announce when their new pricing plan will roll out. In other Google and Apple related news, Google's AI 'TensorFlow' software is coming to iOS to allow the iPhone to be able to run more sophisticated apps.

Comments

Goood! Goood!

[Anonymous Coward]

of Teh Goog!

In other related news.

[richy freeway]

No one cares about related news, stop doing it.

Re:In other related news.

[Anonymous Coward]

How about unrelated news? Because that's all I'm seeing.

Re:In other related news.

[richy freeway]

At least this time it was vaguely related inasmuch as it's involving the same companies. Otherwise, I concur.

Tacking other stories onto the end of summaries is just fucking irritating.

BeauHD, why do you keep ignoring us when we tell you to stop?

Re:In other related news.

[Anonymous Coward]

I do.

So, you're wrong.

Re:In other related news.

[richy freeway]

B-b-but, I was so sure...

I'm going for a lie down, this has all been too much.

Re:In other related news.

[Anonymous Coward]

I do.

So, you're wrong.

This isn't radio or TV where you need to inform people just tuning in every ten minutes, it's right there on the front fucking page already just four submissions down "Tensor flow coming to iOS or some shit." There's no need to "in other news..." it already. Go take your ADHD pills.

Re:In other related news.

[Anonymous Coward]

I do indeed concur. Wholeheartedly!

Re:In other related news.

[alexhs]

I do [care about related news].

Then jump to the "Related Links" section, that's what it's done for. Putting it in the summary is just redundant and annoying.

Anti-competitive agreements?

[Anonymous Coward]

It seems brain-dead obvious that there must be some coordination involved, no? That of two major companies, they happen to change the exact same thing at nearly the exact same moment? If they even went to an 86/14, it would look less like a back room deal going on.

Re: Anti-competitive agreements?

[Anonymous Coward]

You underestimate Google's ability to steal from Apple at every opportunity.

Re:Anti-competitive agreements?

[ledow]

Probably more to do with they are each making so much profit from app stores for so little work, they can each follow the competitive pricing to the bottom without even bothering to do the sums.

Re:Anti-competitive agreements?

[Yvan256]

It seems obvious to me that they are merely reaction to each other's actions.

And this time it's better for the developers so I don't really see anything negative here.

Re:Anti-competitive agreements?

[Anonymous Coward]

Capitalism is a crock, and it's always better (lowest risk, highest reward) to cooperate either tacitly or overtly.

it's only the idiots at the bottom that are taught successfully that's it's best to compete.

Re:Anti-competitive agreements?

[Anubis IV]

Not really. It strikes me more as a controlled leak on Google's part to try and derail Apple's intended narrative.

Apple announced the change in advance of WWDC next week because, to paraphrase, "the keynote speech is just too full of stuff to cover this". More or less, they're trying to build good press in advance, bring more awareness to the event, whet people's appetite for more announcements, and get some positive momentum going into the event. Which is especially needed on their part right now, because the narrative playing out in the media after last quarter's numbers is that Apple has hit its peak, is all washed up, and have got nothing left up their sleeves.

In contrast, the information coming out of Google is from unnamed sources within Google, rather than an official announcement. This wasn't something they were planning to announce two days ago, but it seems fair to think that they've been toying with the idea internally and were prepared to talk about it if Apple decided to do something similar at WWDC. With Apple announcing it early and the swell of good press both covering it and talking up WWDC next week, Google realized that their best move was to toss out a controlled leak that could help dampen Apple's good press a bit.

We've seen this exact same thing play out hundreds of times over the years. Competitor announces X and launches it before you can have your version of X to market? Let it leak that your version of X is even better and coming out soon. The press coverage ends up being rather similar for both, regardless of the fact that the nature of the information is vastly different between the two. As far as the press is usually concerned, a promised product is as good as a launched one.

Re:Anti-competitive agreements?

[Anonymous Coward]

No, 85/15 is not competing, that's coordinating. They're almost the entire game in town. If, as people are saying, Google could easily afford to go lower, then competing would be saying "hey, we can do 90/10". If they can't afford it, they would be saying "well, we can come down to 80/20". When you go to a restaurant and order pasta, you don't know before looking at the menu what the cost is, because the odds of getting the same price by accident are incredibly low.

Re: Anti-competitive agreements?

[Anonymous Coward]

And vice-versa.

Re: Anti-competitive agreements?

[Anonymous Coward]

This is only better for developers with Stockholm syndrome. It's still far better to have an alternat way to sell subscriptions.

Re:Anti-competitive agreements?

[Anubis IV]

It's "coordinating" inasmuch as Google depends on this money more than Apple does and thus doesn't want to leave money on the table that they don't have to. It's no surprise that the leak would suggest they're matching Apple's numbers without beating them. Nor is the number they both picked particularly surprising, given that it's a simple halving of the previous rate.

You're assuming a conspiracy where none exists. Both of them are now providing better than the standard 30% rate that's the norm for the retail industry. That's not collusion.

Re: Anti-competitive agreements?

[Gr8Apes]

When has Apple stolen from Google?

Re:Anti-competitive agreements?

[Anonymous Coward]

the standard 30% rate that's the norm for the retail industry

There was another "standard" 30% rate set by Apple and others...

http://www.reuters.com/article/us-usa-court-ebooks-idUSKCN0W91LQ ...what a short memory we have...

Re: Anti-competitive agreements?

[gumbi west]

if an app on my iPhone crashed or just became horribly unresponsive to the point of being useless, would that count?

Re:Anti-competitive agreements?

[gumbi west]

I am not a lawyer, but it is my understanding that it is legal so long as there wasn't a colluding phone call where they agreed on 85%. Basically, the airlines do this and the courts have said, "meh."

Re:Anti-competitive agreements?

[Anubis IV]

The two situations are dissimilar in all the ways that matter. Agency pricing, which is what we're talking about here, is both legal and in widespread use across a variety of industries. There's nothing illegal about it whatsoever. Moreover, the reporter for your article got some fundamental facts regarding the case blatantly wrong, which may also explain why incorrectly believe that case has any bearing here.

For instance, the article inaccurately described agency pricing as "preventing discounting", which isn't correct in the least (e.g. see Steam). Under the agency pricing model, publishers get to set their own prices and the retailers take a percentage cut (in contrast with wholesale pricing, where the retailer pays a wholesale price and then sells it at whatever price they want for their margin). If a publisher wants to provide a discount, they're more than capable of doing so, and the retailer is more than capable of incentivizing them to do so, thus enabling healthy competition between stores.

What the article failed to mention by name was the single most important phrase of the entire case: Most Favored Nation (MFN). While MFN clauses--which specify that someone will always receive the best price offered to anyone else--are perfectly legal (e.g. we see them being used with wholesalers all the time), the courts ruled that you can't combine them with agency pricing, since doing so prevents competition.

More or less, wholesale pricing + MFN means that the MFN retailers get the best wholesale prices and then can compete by cutting into their own margins to provide discounts and drive competition. Agency pricing means that the retailers compete by incentivizing the publishers to provide discounts through their store but not through the other stores. Agency pricing + MFN, however, means that any discount a publisher gives to a retailer must also be given to all other MFN retailers. Even if a retailer were to cut their margins, the price wouldn't change since the publisher is setting it. And if the publisher chose to drop the price because you as a retailer cut your take, they'd have to drop it with your competitor too, even though your competitor didn't cut their take. That's why agency + MFN is illegal.

But none of that matters here in the least since neither Apple nor Google have MFN clauses in their contracts with app developers. As I said earlier, agency pricing by itself is perfectly legal and is in no way an indication of collusion. Quite the contrary, since agency pricing by itself is a fine way to have competition, and the fact that Google leaked their change right after Apple's announcement can be taken as evidence of that fact. One cut their margin, and the other had to do so as well to remain competitive.

Re:Anti-competitive agreements?

[Anonymous Coward]

No one is saying that this is strictly speaking illegal, but I think that even you would admit that if the two CEOs were on the phone discussing the matter first, that it could be highly illegal.

Re:Anti-competitive agreements?

[Anubis IV]

I'll grant that it would raise some questions, but even if they talked, the suggestion of illegality would be a far stretch. I mean, what would they even be colluding on? Colluding to altruistically give back half their profits to developers? It makes no sense, and even if it happened, I doubt it would be any more illegal than competing companies agreeing to donate to the same charity.

Really, there's neither a need nor a benefit to colluding here. After all, doing what they did without colluding would potentially put them at a competitive advantage, whereas colluding to cut margins just hurts them both for no reason. The reason companies collude is so they can raise profits without worrying about the competition. Had they both raised their cut to 40% at the same time, that'd be cause for concern, but certainly not here.

Re:Anti-competitive agreements?

[Anonymous Coward]

When there is no other game in town (er... Windows Phone?), the point is not that they decrease things now, but that they didn't before. Who knows what the real percentage should be... maybe 99/1 is perfectly fair?

Too little too late

[Atrox666]

I already shuttered my shop and got rid of both my people. I just don't want a business partner like Google or Apple that dictates what I can sell in the marketplace to the point where I have no freedom of expression. They also are fond of reaching deep into the pockets of those that keep them in business.

Re:Too little too late

[dirk]

Well, with Apple you have a point, but less so with Google. With Apple you HAVE to go through the app store or you have no way of getting on their products. With Google though, if you don't like their app store terms, you can always sell the app as a sideload app. Sure, it's not as nice, but then again if you aren't going to let Google have their cut via the app store what do you expect. The key is though, you have an option to completely avoid Google's app store and still get your app on their products.

85% of fuck all

[Big Hairy Ian]

So Android devs now get to keep 85% of fuck all because hardly anyone using Andriod actually pays for their apps

Re:85% of fuck all

[Anonymous Coward]

Speak for yourself, knobcheese. I wouldn't pay a cent for an Apple app because it's made deliberately hard to obtain apps from other places, while Google makes it convenient for me to install apps how I want, so I'm happy to pay for useful software even when I could easily get away with not doing so.

Same for MP3s, movies, and just about all digital content: the easier you make life for me, the more I'm inclined to pay. Making it harder for me to avoid payment will just make me try harder not to pay.

Re:85% of fuck all

[Anonymous Coward]

Google does not make convenient to install app how you want. I have used apple, android and windows phone (each for more than a year). The issue with android was that there was no way to remove permission for an app. So if the app says it needs permission to dial, you had only two choice. Give permission or don't install app. This was fixed in android 6 which is released only few months ago.

With Apple, I had this control all the time. This was the reason why I switched over to iphone 6 from my nexus 5 in 2015. Even my GPS app on iOS has no location permission until I start navigation. Most google apps on the other hand collect all location information all the time and there is no way to prevent it (except in android 6).

Re:85% of fuck all

[Anonymous Coward]

For Android 5 and earlier there's this option -- which works on my older devices -- so I'm in the positive: https://play.google.com/store/...

do we have a sense of humor today?

[MobileTatsu-NJG]

There goes Android copying Apple again.

Re:do we have a sense of humor today?

[sootman]

Totally not copying. I'm sure they had this in the works for months, and it's just unfortunate timing that the day they planned to announce this was exactly one day after Apple happened to make the exact same announcement.

In all seriousness, this isn't exactly rocket science. Just like companies lower the prices of their products every so often to compete, and then other companies lower theirs in response, it's been obvious since Day 1 that *someone* would eventually offer better than 70-30. I'm only surprised that 1) it took this long and 2) that Apple was the first to do it.

Re:do we have a sense of humor today?

[Anonymous Coward]

I read your post before I read your title. Then it clicked and now I'm smiling. :)

Same option with Apple

[SuperKendall]

With iOS, you can build any app and sell it through Cydia to any jailbroken iPhone.

You will actually have a much larger potential market than a side loaded Android app would, because all jail-breakers use Cydia. Most Android owners will never find, much less load, your side loaded Android app.

Re:Same option with Apple

[Anonymous Coward]

So what you're saying, is that you support piracy and exploiting iOS's-security-holes? So you believe that the piracy scene is so out of control on iOS, that it has a "much larger potential" for earning money than through legit means?

Re: Same option with Apple

[Anonymous Coward]

40 percent of android phones have at least one side loaded app.

85% is good, but it's 85% of zilch

[micahraleigh]

In the not too distance past the 5th most downloaded app on the iOS app store made around $500 after taxes.

In other words, not enough for anyone to live on.

Certainly not those used to a regular developer's salary.

Re:85% is good, but it's 85% of zilch

[gumbi west]

Of course, most downloaded is not most profitable.

The world will certainly notice your protest.

[Brannon]

unless we get distracted by someth