Google and Spotifys app store deal could upend the mobile app economy – Protocol

Hello, and welcome to Protocol Entertainment, your guide to the business of the gaming and media industries. This Friday, were discussing Google and Spotifys new app store deal and what it means for the broader app economy, as well as what you should read, watch and play this weekend.

Earlier this week, Google and Spotify announced a joint multiyear agreement hinting at a serious shift in how much of the mobile commerce pie the search giant takes from third-party developers. The deal, which is being billed as a pilot program, allows Spotify to implement its own in-app payment system instead of Googles Play Store one: That means the streaming service will take home more of each subscription it sells.

The exact commission split is a mystery for now, but its going to be more generous than the current 85%-15% split. The implications this could have for the broader mobile economy, much of which is powered by gaming, are massive.

Spotify has been pushing for this for years. Spotify, alongside Epic Games and Netflix, has been one of the most vocal opponents of the 30% app store cut on Android and iOS. Though it has directed much of its ire toward Apple, Spotify has still supported lobbying efforts, legislation and regulation in the U.S. and abroad thats begun to chip away at both platforms once-rigid policies.

Gaming would be the real test. Spotify makes perfect sense as a first partner for the pilot program given the streaming services combative history against Googles competitor. But Google actually doesnt stand to lose all that much money here. Thats because mobile gaming, not music streaming, makes up a much bigger part of the mobile app economy.

Google is amplifying the pressure on Apple. Much of the pushback against app store legislation in countries like Japan, the Netherlands and South Korea has come from Apple, which has been steadfast in its defense of its 30% cut and less willing than Google to budge.

Its still too early to tell just how influential Google and Spotifys partnership will prove, and whether this will be the start of a sea change for the mobile app economy or just another concession Big Tech uses to forestall meaningful regulation. But until mobile game companies are extended the benefits other media apps enjoy, companies like Epic Games dont seem likely to ever back down.

Nick Statt

"To win more revenue for your sales teams, start with the customer. Understand what your customers need, and make sure that those needs are aligned to clearly defined internal success criteria. Build trust across the teams that what you sold the customer is what is being delivered." - Pilar Schenk, COO at Cisco Collaboration

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Spider-Man: No Way Home. Didnt catch the latest Spidey movie in theaters? Or maybe you did, but you really want to watch it again in the comfort of your own home? Nows your chance: The movie became available on iTunes, Google Play and a bunch of other video-on-demand stores in recent days; you can buy it for $19.99.

Eliza Masswerk.at. Joseph Weizenbaums pioneering chatbot has fascinated, enraged and amused people for decades. Playing the role of a therapist, Eliza is both very inquisitive and obviously limited in her understanding of what we tell her. And yet, we cant help but engage. We try to trip her up, get her to say something funny, swear at her or even confide in her. This week, Eliza was honored with a Peabody Award for Digital and Interactive Storytelling, which is as good of a reason as any to once again chat a bit with her. I highly recommend the online version hosted by Masswerk.at, which allows you to experience Eliza in an old-school terminal interface.

Netflix Jr. magazine Netflixjr.com. For some time now, Netflix has been on a quest to become its own best media partner. The company launched a print magazine, podcasts, newsletters and more, all doing journalism-ish things while also advertising Netflix movies and shows. The latest addition to this is the Netflix Jr. magazine, a print magazine for the preschool to early primary school crowd. Think Highlights High Five, with every page featuring characters from Netflix shows. There are puzzles, mazes, activities and even recipes (Cocomelon toast, anyone?). Netflix clearly isnt trying to reinvent the wheel here, but the magazine should still be fun for little ones, especially if theyre into shows like Ask the StoryBots or Ada Twist, Scientist. A subscription to the print version of the Netflix Jr. magazine is free, and the magazine is also available as a free digital download.

Enemies Unity. Game engines have improved a lot over the years, and theres no better way of keeping track of visual fidelity improvements than Unitys tech demos. Its latest looks like a high-end Hollywood visual effects production, but its all been rendered in real time. To add to the wow factor, its worth reading this Twitter thread from the tech and rendering lead on Unitys demo team, which explores all the intricacies of the short film in detail.

How SiriusXM bungled the Stitcher acquisition The Verge. With the $325 million acquisition of Stitcher, SiriusXM also got its hands on the podcast network Earwolf. Insiders told The Verge that the acquisition didnt exactly go over as expected. A worthwhile read, and another proof point that monetizing content with small but engaged audiences is hard.

"Trying to make every deal as big as possible often adds complexity and extends sales cycles. To accelerate growth, sellers should focus on landing faster, and then expanding, and expanding again. Getting customers into your solution sooner helps you solve their initial problems, then later, you can grow together." - Michael Megerian, Chief Revenue Officer at Yello

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Thoughts, questions, tips? Send them to entertainment@protocol.com. Enjoy your day, see you Tuesday.

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Google and Spotifys app store deal could upend the mobile app economy - Protocol