Google offers 70% payout rate for mobile apps

Mobile billing on the Google
phone

This has to be sweet music to any mobile apps developer. The news is that the Google Apps store on the T-Mobile G1 phone will payout a whooping 70% of revenue (see Google Releases Details On Android Market; Will Split Revenues Between Developers And Carriers). This is groundbreaking for mobile billing and the mobile content industry for a number of reasons but you have to ask yourself is this really good news for developers?

Google says developers will keep 70% of the revenue with the remaining amount going to the mobile operators and billing settlement fees. When you delve, the payment method is Google Checkout, rather than the more established “pay on the phone bill” which is used for the vast majority of mobile content sales.

While on the surface a 70% payout rate might seem great, there are some downsides. If phone bill payment was implemented such as the mobile billing service from Bango then developers could be:

Earning more revenue because everyone with a mobile phone can pay on their phone bill but not everyone has a Google Checkout account.

Earning more revenue than the 70% payout rate, particularly for consumers who buy the content in the UK as the payout rates here are on average around 75% and go all the way up to 88% if the user is on the Orange network.

Even though T-Mobile is not involved in the billing at all, they still get a generous share of the revenues as a “reward” for letting Google onto their network. Google is now in a position to battle it out with Apple and steal some marketshare from the iPhone. This bribe, if you will, is a smart move and will win the hearts and minds of mobile operators worldwide.

Apple on the otherhand don’t give any content revenues from its apps store to any of the operators that supply the iPhone. In the Apple app store, the payment is through iTunes and good news for developers is they get a generous payout too but the carrier is completely out of the loop. How long do you think this will last? The G1phone is about to change the rules of the game.

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