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Google offered Netflix a sweetheart deal to pay just 10 percent on Google Play

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

In 2017, Google provided Netflix a particular discounted charge of 10 % of its in-app funds on Android — that means Netflix may preserve 90 % of the cash — in keeping with paperwork and testimony within the Epic v. Google trial.

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

As soon as upon a time, when Netflix may provide its personal technique of fee, it paid nearer to 3 %, he stated. Google ultimately lower that off. However earlier than Google simply up and took various fee mechanisms away, it tried to supply Netflix the particular 10 % deal to modify to Google Play Billing (GPB) voluntarily— fairly than threat Netflix taking all of that income away.

Google provided to make Netflix a “platform growth associate” beneath a program it known as “LRAP++”, in keeping with a Netflix inside doc proven in court docket right this moment. (I imagine I overheard that LRAP stands for Dwelling Room Accelerator Program.)

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

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

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

Netflix didn’t take the deal, he stated. Netflix now not pays Google something for distribution through Google Play, pointing people 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’d lose cash even at 10 %.

“Assuming all Android in-app signups got here by means of GPB, Netflix would lose ~$250M USD on 1 yr of signups, even when accounting for the incremental uplift,” reads a line in one other Netflix inside 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 fee 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 on the market on virtually each video-playing gadget beneath 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 commonplace charge, in keeping with an electronic mail unearthed throughout the Epic v. Apple trial.

We don’t understand how a lot Spotify pays Google for its particular deal. In the long run, the numbers weren’t publicly revealed throughout trial.

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