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

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Spotify isn’t the one one which negotiated with Google for particular therapy. Netflix did, too.

In 2017, Google provided Netflix a particular discounted fee of 10 % of its in-app funds on Android — which means Netflix might maintain 90 % of the cash — in keeping with paperwork and testimony in the Epic v. Google trial.

Right now, 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 do this, Netflix VP of enterprise growth Paul Perryman mentioned in a 2022 video deposition that aired within the courtroom on Thursday.

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

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Google provided to make Netflix a “platform growth accomplice” underneath a program it known as “LRAP++”, in keeping with a Netflix inside doc proven in courtroom right now. (I imagine I overheard that LRAP stands for Residing 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 underneath 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 mentioned. Netflix now not pays Google something for distribution by way of Google Play, pointing people who obtain the app to subscribe and pay in a cellular browser as a substitute.

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 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 situation 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 an alternative, Google spent its time confirming that Netflix is on the market on virtually each video-playing gadget underneath the solar — successfully stating, 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 “unique arrangement” with Apple to share solely 15 % of its income on iOS, half of Apple’s customary fee, in keeping with an electronic mail unearthed throughout the Epic v. Apple trial.

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

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