Spotify is not the only one that negotiated a special deal with Google. Netflix did it too.
In 2017, Google offered Netflix a special discount rate of 10 percent off its in-app payments on Android, meaning Netflix could keep 90 percent of the money, according to documents and testimony in the trial Epic v. Google.
Today, you can not subscribe to Netflix from the Netflix app on Android, but that wasn’t always the case. Netflix previously paid Google 15 percent to do that, Netflix vice president of business development Paul Perryman said in a 2022 video deposition that aired in the courtroom Thursday.
There was a time when Netflix could offer its own payment method, it paid about three percent, he said. Google finally cut that. But before Google simply came along and eliminated alternative payment mechanisms, it tried to offer Netflix the special 10 percent deal to switch to Google Play Billing (GPB) voluntarily, rather than risk Netflix taking away all that revenue.
Google offered to make Netflix a “platform development partner” under a program it called “LRAP++,” according to an internal Netflix document filed in court today. (I think I heard that LRAP stands for Living Room Accelerator Program).
“Netflix is the only one offered this at this time,” the document continues.
The deal: “Bring revenue sharing to 10% on the condition that Netflix has a full commitment to GPB globally.” Perryman confirmed under oath that Google actually offered that deal to Netflix in September 2017.
“Netflix is the only one offering this right now”
Netflix didn’t accept the deal, he said. Netflix no longer pays anything to Google for its distribution through Google Play, pointing at people Those who download the app subscribe and pay in a mobile browser.
This is partly because Netflix predicted it could lose money by as much as 10 percent.
“Assuming all sign-ups in the Android app are done through GPB, Netflix would lose ~$250 million in 1 year of sign-ups, even taking into account the incremental increase,” reads a line in another internal document from Netflix. (Netflix compared browser sign-up to Google Play in-app payments, he adds, assuming a subscriber would stay for 36 months.)
“We don’t see a scenario in which Google’s payments system surpasses or even equals ours,” Netflix argued.
Google’s lawyer didn’t dispute any of this in the video deposition we saw. Instead, Google spent its time confirming that Netflix is available on virtually every video streaming device out there, effectively signaling, without explicitly saying so, that an app of Netflix’s scale can afford to avoid the store and rely on of a record in the browser. . Google did not immediately respond to a request for comment.
While Netflix didn’t accept Google’s excellent deal, it did accept one from Apple back in the day. Netflix had a “unique agreement” with Apple to share only 15 percent of its revenue on iOS, half of Apple’s standard rate, according to an email uncovered during the Epic v. Apple trial.
We don’t know how much Spotify pays Google for its special offer. In the end, the figures were not publicly revealed during the trial.