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Google Play matures with in-app subscriptions

by Kristen Nicole

Google is facing growing competition for its Google Play market, as Amazon, Facebook and even China Mobile Ltd. develop stores to sell Android apps. It’s what we’d expect from an open source system such as Android, but that doesn’t mean Google won’t fight for dominance. Apps have become part a powerful platform for commerce, and Google hopes to generate as much revenue as possible from Android.

The latest offering is in-app subscriptions for Google Play, expanding the in-app billing features launched last year. It’s another way for developers to monetize their apps through try-and-buy, virtual goods, upgrades and other models that have become popular. Google reports that 23 of the 24 top-grossing apps in Google Play use in-app billing, their total revenue exceeding that of traditional app purchases. The new subscription option can be set for monthly or annual subscriptions inside the app, complete with auto-renew. Google Play handles the transaction, alerting users of new charges and renewals, while developers get their cut.

Google Play maturing

In-app subscriptions mark another point of maturation for Google Play as a payment platform, which is powered by Google Wallet. Google needs to build up as much consumer trust around its payment platform as it can, especially if it wants to compete with Apple’s integrated payment system, and even Amazon’s familiar platform based on their long-standing experience in e-commerce. While Google Play has hundreds of thousands more apps than Amazon’s Appstore, and the lowest fees for developers, Google Play still delivers the lowest amount of revenue per user, averaging 23 cents compared to Apple’s $1 and Amazon’s 89 cents per user.

Already, Google is targeting the right industries for its new in-app subscription service, starting with mobile games. Glu Mobile will be selling custom VIP currency packages for some of its freemium Android games through subscriptions. Digital publications is another sector that’s likely to consider Google’s new in-app subscriptions, as they toy around with several distribution and payment methods to revive print media in the mobile world.

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