Spotify, Google Reach ‘Groundbreaking’ Agreement For In-App Subscriptions: ‘Fair and Open Platforms Enable Better Consumer Experiences’


Amid Spotify’s long-running battle with Apple over App Store fees, the audio-entertainment platform has inked a “groundbreaking” agreement with Google (NASDAQ: GOOG) on in-app subscriptions.

Spotify (NYSE: SPOT) just recently announced the “multiyear” pact, and CEO Daniel Ek took to social media to tout the deal. As part of the newly finalized Google-Spotify union, Android users who download the music streaming app via the Play Store will have the choice of paying for subscriptions through Google Play Billing or the Spotify platform itself.

“For the first time, these two options will live side by side in the app,” Spotify higher-ups said of the payment choices, indicating also that the involved parties’ teams will coordinate “over the coming months” on the “new experience.” Execs “anticipate launching the first iteration of User Choice Billing later this year,” and the feature will ultimately “roll out in countries around the world,” according to Spotify.

“Spotify will continue to freely communicate with users about our Premium subscription service, promote discounts and promotions, and give listeners on our Free tier the ability to convert to Premium directly in the app,” officials said.

Predictably, Spotify capitalized upon the news by taking what appears to be a thinly veiled shot at Apple, while Google emphasized the “openness and user choice” of its Android operating system.

“Spotify has been publicly advocating for platform fairness and expanded payment options, among other things, because fair and open platforms enable better consumer experiences and allow developers to grow and thrive—when this happens everyone wins,” the company’s announcement message indicates on the former front.

And in a statement, Spotify chief freemium business officer Alex Norström, who spoke earlier this month about his employer’s over $300 million sponsorship deal with FC Barcelona, relayed the hope that the Google alliance will blaze “a path that will benefit the rest of the industry.”

“Android has always been about openness and user choice,” former Jawbone president Sameer Samat, currently Google’s VP of product management, added in part. “This step is an important milestone for mobile app stores and I can’t imagine a better first partner than Spotify. They value choice as much as we do and understand the importance and continued investment in Android and Play to the health of the entire ecosystem.”

Interestingly, outlets including TechCrunch have specified that the “user choice billing” agreement with Spotify represents one component of a broader pivot for Google, which is expected to pilot the program with “a small number of participating developers” ahead of a possible wider rollout. (A Spotify spokesperson communicated that Google’s commission under the new arrangement meets the streaming service’s “standards of fairness.”)

The Google-Spotify payments collaboration comes about one year after Google slashed its Play Store commission to 15 percent on each developer’s first $1 million in revenue – and roughly seven months after lawmakers introduced the Open App Markets Act. If signed into law, the bipartisan legislation would create a series of operational rules applicable to “any person that owns or controls an App Store for which users in the United States exceed 50,000,000,” the App Store and the Play Store chief among them.

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