(Hypebot) – Apple and Google will cut the commissions charged to subscription apps by 50%, both companies have confirmed. Think of it as a very early Christmas present for Spotify and other music streamers. Even small changes can erase buckets of red ink when you have tens of millions of users.
Apple and Google will cut the commissions that developers pay to sell subscriptions to apps on iTunes and Google Play in half.
The split will dropped from 70/30 to 85/15 in the coming months. Apple's new deal keeps the split at 70/30 for the first year of any new subscription, while Google's drop is across the board.
Spotify, Pandora, Tidal, SoundCloud, Rhapsody, YouTube Music and Slacker, all consistently rank among the top grossing music apps in iTunes and Google app stores. So while specific data as to what percentage of music streaming revenue comes via Apple and Google downloaded apps, its unquestionably very substantial.
Google and Apple are both currently testing the new pricing and plan to role it out in the coming months.
Ads In The App Store
Another key component in both companies plans is the addition of paid promotion within each app store. Previously, apps were only discovered via search; but any new paid plan would favor those like Spotify and Pandora who have deeper pockets.