For developers building mobile and tablet apps, in-app billing is an indispensable monetization tool.
After all, it's often easier and more profitable to give an app away for free and then charge for extra features. This is particularly true for gaming apps.
But there's another monetization tool that many developers, particularly those building content-rich apps, have been eying: in-app subscriptions.
Developers can set their own prices for subscriptions, as well as the duration (monthly or annual subscriptions seem to be the two options offered). Google is also rolling out a new HTTP-based API that will allow developers to validate and cancel subscriptions that are tied to any backend service an app relies on.
As one might expect, Google controls the entire billing process, including renewal payments. While all subscriptions are set to auto-renew, to reduce the likelihood of unwanted charges, Google will send updates to users if subscription terms change and provide email notifications with renewal payments.
Google says that 23 of the top 24 grossing apps on Google Play utilize in-app billing, so there's good reason to believe that many developers will be eager to implement subscriptions. This said, it will be interesting to see if content owners and publishers specifically embrace the ability to build apps that incorporate subscriptions.
On one hand, Google's update will certainly create new revenue opportunities. But on the other hand, the fact that the subscription is really owned by Google may give some publishers pause.
As we've seen with organizations like the Financial Times, capitalizing on mobile opportunities doesn't just depend on having the right monetization tools; it often depends on choosing where, how and by whom they're implemented.