In the ongoing Epic v. Google trial, new details emerge about Netflix's intriguing negotiations with Google over in-app payments. In 2017, Google extended a unique deal to Netflix, offering a discounted rate of 10 percent on its in-app payments on Android, allowing Netflix to retain 90 percent of the revenue.
The courtroom revelations indicate that Netflix, at one point, paid Google 15 percent for in-app subscriptions on Android. However, as Netflix explored its own payment methods, Google, in a strategic move, proposed the 10 percent deal to keep Netflix on its platform.
Netflix VP of Business Development, Paul Perryman, confirmed under oath that Google presented Netflix with the offer in September 2017. The proposed deal, under the "LRAP++" program, aimed to make Netflix a "platform development partner" and reduce the revenue share to 10 percent in exchange for a full commitment to Google Play Billing (GPB) globally.
Remarkably, Netflix declined the offer, choosing to forego any payments to Google for distribution via Google Play. The streaming giant now directs users to subscribe and pay through a mobile browser, emphasizing its skepticism that Google's payment system could outperform its own.
While Google didn't contest Netflix's decision during the trial, it highlighted Netflix's extensive availability across various devices, subtly suggesting that a platform of Netflix's scale could afford to bypass traditional app stores.
Although the details of Spotify's deal with Google remain undisclosed, the courtroom revelations provide a glimpse into the intricate negotiations and strategies employed by tech giants in the competitive app store landscape. The battle for favorable in-app payment rates continues to unfold, shaping the dynamics of the digital marketplace.
