UPDATE: Apple, Google Cut App Commissions By 50%, But Spotify Says It’s Not Enough

UPDATE: Apple

and

Google

will cut the

commissions charged to subscription apps by 50%.

Even

small changes can erase buckets of red ink

when you have tens of millions of users, but in a statement Spotify says its not enough and does not address core issues.

_____________________________________________

Apple and Google will cut the commissions that developers pay to sell subscriptions to apps on iTunes and Google Play in half.

The split will dropped from 70/30 to 85/15 in the coming months. Apple's new deal keeps the split at 70/30 for the first year of any new subscription, while Google's drop is across the board.

Spotify, Pandora, Tidal, SoundCloud, Rhapsody, YouTube Music and Slacker, all consistently rank among the top grossing music apps in iTunes and Google app stores. So while specific data as to what percentage of music streaming revenue comes via Apple and Google downloaded apps, its unquestionably very substantial. Google and Apple are both currently testing the new pricing and plan to role it out in the coming months.

UPDATE: "It's a nice gesture, but doesn't get to the core of the problem with the Apple tax and its payment system," said Spotify's Global Head of Corporate Communications told The Verge. "Unless Apple changes its rules, price flexibility is prohibited, which is why we can never provide special offers or discounts, and means we won't have the ability to share any savings with our customers," he continued "Apple still insists on inserting itself between developers and their customers, which means developers will continue to lack visibility into why customers churn – or who even qualifies as a long-term subscriber."Ads In The App Store

Another key component in both companies plans is the addition of paid promotion within each app store. Previously, apps were only discovered via search; but any new paid plan would favor those like Spotify and Pandora who have deeper pockets.

Expect more clarification next week at Apple's WWDC.

MORE: What Music Industry Can Expect From Monday's Apple WWDC Announcements