This User Choice Billing program is slowly but surely being rolled out to more and more markets, which is great news for Spotify users who are tired of high commissions from Google Play Store purchases. This way, people won’t have to feel guilty about spending their hard-earned money on apps they actually use, instead getting a better deal than if they just bought them outright.
Since Spotify released its third-party billing option for Android users in a few select markets, the company has not disclosed when or where this feature will reach its global user base. However, given Spotify’s past practices of rolling out features slowly to certain markets and then expanding them more broadly later on, it is likely that the choice will only be available to a minority of Android users at first.
Given Spotify’s success in expanding its user base, the company is likely to announce additional deployments of User Choice Billing over the coming months. This new payment option gives users more choice in how they pay for their subscription, and could further draw in new subscribers. The option is already available in 10+ markets around the world, and with continued expansion it could become a popular payment method for Spotify users worldwide.
The Google Play Billing option allows Spotify subscribers to pay for their subscription through the Google Play store instead of through the standard method of charging individuals monthly subscriptions. This new option is available in a majority of countries where Spotify currently offers its premium service, indicating that it plans to offer this feature worldwide. This opens up Spotify Premium to a wider audience than ever before and makes it easier for users to pay for the service.
Spotify is a music streaming service with over 30 million active users. It offers subscriptions and a free version, as well as an ad-
One obvious advantage of having a tester like Spotify on board is that their feedback and experience can be directly put into effect with the new billing system. Google has long been accused of abusing its market power, but reducing commissions could appease those concerns and potentially drive more users to its platforms.
This third-party billing option is the latest attempt by Google to appease regulation and antitrust litigation. As these threats increase, the company offers a way for app developers to receive less money from customers, without sacrificing quality or user experience. However, this option isn’t very favorable for developers as it only reduces commissions by 4%. Despite this drawback, the User Choice Billing system is still an improvement over traditional billing methods which can often be expensive and difficult to set up.
Bumble is one of the first dating apps to join Google’s User Choice Billing pilot, which allows users to choose their preferred way of paying for services. The app has seen a surge in users in South Africa and Brazil since the pilot was opened up, since it allows users to avoid fees associated with traditional methods like credit cards.
Developers that participate in the Google Shopping App program must follow specific UX guidelines in order to implement the purchase feature. First, they must display an information screen to each user the first time they initiate a purchase. The screen only has to be shown once, but the billing choice screen must be displayed before every purchase. This ensures that users are able to understand their options and make a informed decision before making a purchase.
This confidential deal between Spotify and Google seems to offer a considerably lower commission rate when third-party billing is used, possibly due to the higher standards that Spotify has for fairness. It remains to be seen if this offers an advantage to Spotify over its competitor, but it seems as though they are off to a good start.
Spotify’s agreement with Google could mean that the streamer can increase its subscription revenues as it faces increased competition from investors. The deal is likely to give Spotify more ad revenue which will help make up for its losses in recent years.
With its solid progress on user growth in the fourth quarter and strong revenue results, Spotify shareholders appear to be overall pleased with today’s announcement. That said, one troubling statistic revealed by Spotify was that its loss per share was larger than expected. While this may not be a cause for alarm for long-term investors – given that the company is still posting satisfactory gains in total subscribers and revenue – it may prompt some reconsideration among those who were considering selling their stock earlier today.
