At its Playtime event for Android developers today, Google announced that apps on the Play Store will soon gain a new option that could have huge implications for subscriptions: temporary promotional pricing. "Coming soon, you'll be able to create an introductory price for new subscribers for a set period of time," Google's Larissa Fontaine wrote in a blog post. "For example, you can offer a subscription for $1 per month for the first three months before the normal subscription price kicks in."
There are many app categories where this could make a big difference. Music and video are certainly on that list; maybe cheaper introductory pricing could boost Google's own struggling YouTube Red service, or help Spotify maintain its lead over Apple Music and other rivals. Other apps like internet TV offerings (Sling TV, PlayStation Vue) and productivity tools (Evernote) also stand to benefit if developers are willing to temporarily cut their prices in hopes that customers will stay subscribed once the normal rate kicks in — either because they forgot or, more ideally, actually find the app or service to be worth the monthly charge.
"Subscriptions are the fastest growing business model on Play, with consumer spending in subscription apps increasing 10x over the last 3 years," wrote Fontaine. And with that in mind, this year both Apple and Google have adjusted the revenue-sharing terms around subscriptions to give app makers a bigger cut than before. For iOS developers, apps must maintain a customer's subscription for at least 12 months before the more favorable 85/15 split takes effect; Google Play doesn't have the same long-term subscriber requirement.