Google supplied Netflix a sweetheart deal to pay simply 10 % on Google Play

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Spotify is not the one one which negotiated with Google for particular therapy. Netflix did, too.

In 2017, Google supplied Netflix a particular discounted fee of 10 % of its in-app funds on Android — that means Netflix might hold 90 % of the cash — based on paperwork and testimony in the Epic v. Google trial.

At present, you may’t subscribe to Netflix from contained in the Netflix app on Android, however that wasn’t at all times the case. Netflix beforehand paid Google 15 % to try this, Netflix VP of enterprise improvement Paul Perryman stated in a 2022 video deposition that aired within the courtroom on Thursday.

As soon as upon a time, when Netflix might supply its personal technique of cost, it paid nearer to a few %, he stated. Google ultimately minimize that off. However earlier than Google simply up and took different cost mechanisms away, it tried to supply Netflix the particular 10 % deal to modify to Google Play Billing (GPB) voluntarily— somewhat than danger Netflix taking all of that income away.

Google supplied to make Netflix a “platform improvement associate” below a program it known as “LRAP++”, based on a Netflix inner doc proven in court docket at the moment. (I imagine I overheard that LRAP stands for Dwelling Room Accelerator Program.)

“Netflix is the one one that is being supplied to at this level,” the doc continued.

The deal: “Deliver revshare to 10% on the situation that Netflix have a full dedication to GPB globally.” Perryman confirmed below oath that Google really supplied that deal to Netflix in September 2017.

“Netflix is the one one that is being supplied to at this level”

Netflix didn’t take the deal, he stated. Netflix not pays Google something for distribution through Google Play, pointing folks who obtain the app to subscribe and pay in a cellular browser as an alternative.

That’s partly as a result of Netflix forecast it would lose cash even at 10 %.

“Assuming all Android in-app signups got here by way of GPB, Netflix would lose ~$250M USD on 1 12 months of signups, even when accounting for the incremental uplift,” reads a line in one other Netflix inner doc. (Netflix in contrast signing up in a browser vs. in-app Google Play funds, it provides, whereas assuming a subscriber would stick round for 36 months.)

“We don’t see a state of affairs the place Google’s cost system would outperform, and even match our personal,” Netflix argued.

Google’s legal professional didn’t contest any of this within the video deposition we noticed. As a substitute, Google spent its time confirming that Netflix is obtainable on virtually each video-playing system below the solar — successfully declaring, with out saying explicitly, that an app on the scale of Netflix can afford to bypass the shop and depend on a browser signup. Google didn’t instantly reply to a request for remark.

Whereas Netflix didn’t take Google’s sweetheart deal, it did take one from Apple again within the day. Netflix had a “distinctive association” with Apple to share solely 15 % of its income on iOS, half of Apple’s normal fee, based on an electronic mail unearthed in the course of the Epic v. Apple trial.

We don’t know the way a lot Spotify pays Google for its particular deal. Ultimately, the numbers weren’t publicly revealed throughout trial.

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