Netflix’s Negotiations with Google Revealed Epic v. Google Trial Unveils Special Offer and Business Dynamics

Netflix’s Negotiations with Google Revealed Epic v. Google Trial Unveils Special Offer and Business Dynamics | CIO Women Magazine

Source – publinews.gt

In a surprising revelation during the ongoing Epic v. Google trial, it has come to light that Netflix, like Spotify, engaged in negotiations with Google for preferential treatment. Documents and testimonies presented in court disclosed that in 2017, Google extended a unique offer to Netflix, granting a special discounted rate of 10 percent for in-app payments on Android. This meant that Netflix could retain a substantial 90 percent of the revenue.

Netflix’s Dilemma and Strategic Shifts

Initially, Netflix allowed users to subscribe directly within the Android app but paid a 15 percent fee to Google for this privilege. However, the situation changed when Netflix, citing a 2022 video deposition by Netflix VP of Business Development Paul Perryman, revealed that they once paid as low as three percent when employing their independent payment method. Google later discontinued this practice but, prior to doing so, attempted to entice Netflix with the 10 percent deal, urging them to switch to Google Play Billing voluntarily.

An internal Netflix document unveiled during the trial detailed Google’s proposal to make Netflix a “platform development partner” under the “LRAP++” program, offering a 10 percent revenue share in exchange for a global commitment to Google Play Billing. Despite the offer, Netflix ultimately declined, choosing not to pay anything to Google for distribution via Google Play. Netflix now directs users to subscribe and pay through a mobile browser, a strategy reportedly adopted due to a forecast that even at 10 percent, Netflix could incur significant losses, estimated at around $250 million USD over a year.

Google’s Response and Netflix’s Historical Deal with Apple

During the Epic v. Google trial, Google’s attorney did not contest Netflix’s assertions. Instead, Google emphasized Netflix’s widespread availability on various devices, indirectly suggesting that a platform of Netflix’s magnitude could afford to bypass app stores and rely on browser signups. Google spokesperson Dan Jackson refrained from commenting specifically on Netflix but noted that Google Play customarily offers varying rates to different developers.

While Netflix opted not to take Google’s favorable deal, it was revealed that the streaming giant had entered into a unique arrangement with Apple in the past. According to an email disclosed during the Epic v. Apple trial, Netflix and Apple had a special deal allowing Netflix to share only 15 percent of its revenue on iOS, half of Apple’s standard rate.

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