Google offers Netflix a deal to pay just 10% on Google Play

Spotify is not The only company to negotiate special treatment from Google. Netflix did the same.

In 2017, Google offered Netflix a special 10% discount on Android in-app payments, meaning Netflix got to keep 90% of the money, according to documents and testimony. Epic v. Google Trial.

today, you can not Subscribe to Netflix from within the Netflix app on Android, but that’s not always the case. Netflix previously paid Google a 15% fee to do this, Paul Perryman, Netflix’s vice president of business development, said in 2022 video testimony played in court on Thursday.

Once upon a time, when Netflix could offer its own payment methods, it paid closer to three percent, he said. Google eventually cut this off. But before Google just took action and removed the alternative payment mechanism, it tried to offer Netflix a special payment option. 10% of transactions are voluntarily switching to Google Play Billing (GPB) rather than risking Netflix taking all the revenue.

According to internal Netflix documents shown in court today, Google offered to make Netflix a “platform development partner” under a program called “LRAP++.” (I believe I overheard that LRAP stands for Living Room Accelerator Program.)

“Netflix is ​​the only company currently offering this service,” the document continues.

The deal: “increases revenue share to 10%, conditional on Netflix making a full global commitment to GPB.” Perriman confirmed under oath that Google actually proposed the deal to Netflix in September 2017 trade.

Netflix did not accept the deal, he said. Netflix will no longer pay Google any fees for distribution through Google Play. Give advice They download the app to subscribe and pay in their mobile browser.

That’s partly because Netflix predicts it could lose money even at a 10% loss.

Another internal Netflix document reads: “Assuming all Android in-app registrations occur through GPB, even accounting for incremental growth, Netflix will lose approximately $250 million in one year’s registrations,” it added. Road, and assumes subscribers will stick with it for 36 months. )

“We do not believe that Google’s payment system will surpass or even be comparable to our payment system,” Netflix argued.

Google’s lawyers didn’t dispute that point in the video testimony we saw. Instead, Google spent a lot of time confirming that Netflix would be available on nearly every video-playing device under the sun — effectively pointing out, without explicitly stating, that a Netflix-sized app could bypass the store and rely on browser registration. Google did not immediately respond to a request for comment.

While Netflix didn’t take Google’s sweetheart deal, it did get one from Apple at the time. Netflix strikes ‘unique arrangement’ with Apple According to an email discovered during the Epic v Apple trial, the company only shares 15% of its iOS revenue, half of Apple’s standard rate.

We don’t know how much Spotify paid Google for the special offer. in the endthese figures were not publicly disclosed during the trial.