Rising Fees Following Google's In-App Payment Mandate... Native Apps Being Pushed Out

[Asia Economy Reporter Seungjin Lee] Starting this month, Google has implemented a mandatory in-app payment policy, causing domestic content application (app) usage fees to rise one after another. This has led not only to an increase in content prices but also to a weakening of the competitiveness of native apps.

The domestic content industry began raising prices last month to accommodate Google's 30% commission fee. Last month, Google banned updates for apps that included outlinks for external payments, and from this month, it has maintained its stance to delete apps that do not comply with the in-app payment policy.

According to the industry on the 11th, Melon, the number one music platform in terms of domestic users, decided to uniformly raise the price of service subscriptions by about 10% starting at the end of this month. Melon announced through a notice, "Due to the application of Google's in-app payment commission fee in accordance with Google's policy, the price of Melon subscriptions within the Android app will inevitably increase from June 29."

The main subscription price increases for Melon are as follows: ▲Mobile Streaming Club from 6,900 KRW to 7,600 KRW ▲Streaming Club from 7,900 KRW to 8,700 KRW ▲Streaming Plus from 10,900 KRW to 12,000 KRW ▲Hi-Fi Streaming from 12,000 KRW to 13,200 KRW.

However, if a Melon subscription is purchased before the price increase and the subscription's recurring payment is maintained, the pre-increase price will be retained. Price increases do not apply to payments made outside the Android app, such as on PC or mobile web.

The problem is that Melon's price hike has brought it closer to second place, YouTube Music. According to WiseApp, an app analytics firm that surveyed Korean Android smartphone users aged 10 and above, Melon was the most used music service app in May with 6.49 million users.

Following Melon were ▲YouTube Music with 5.86 million users ▲Genie Music with 3.27 million ▲Flo with 2.18 million ▲Naver VIBE with 1.28 million ▲SoundCloud with 810,000 ▲Spotify with 660,000 users. According to WiseApp's survey released in April 2021, Melon had 5.31 million users and YouTube Music had 2.98 million users monthly. In other words, the user gap between Melon and YouTube Music has narrowed from 2.33 million to 630,000.

YouTube Music, a music streaming app operated by Google’s video sharing platform YouTube, is relatively free from the impact of in-app payment policies compared to domestic apps. The third-ranked app, Genie Music, has also adopted Google's in-app payment system, so it is expected to raise fees in the future. In this case, YouTube Music's growth momentum is likely to accelerate further.

Meanwhile, due to Google's forced in-app payment policy, major content service usage fees have risen by about 10-20%. Online video services (OTT) Wave and TVING, as well as the music app Flo, raised subscription prices by about 15%. Naver Webtoon increased the price of cookies purchased in the Android app from 100 KRW to 120 KRW, a 20% increase.

This content was produced with the assistance of AI translation services.