Spotify isn’t the only one that has negotiated special treatment with Google. Netflix did that too.
In 2017, Google offered Netflix a special discount rate of 10 percent of in-app payments on Android — meaning Netflix could keep 90 percent of the money — according to documents and testimony in the Epic v. Google trial.
These days you can’t 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, Paul Perryman, Netflix’s vice president of business development, said in a 2022 video statement aired in court on Thursday.
Once upon a time, when Netflix was able to offer its own payment method, it paid almost three percent, he said. Google eventually cut that off. But before Google took away alternative payment mechanisms, it tried to offer Netflix the special 10 percent deal to voluntarily switch to Google Play Billing (GPB) – 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 shown in court today. (I think I heard that LRAP stands for Living Room Accelerator Program.)
“Netflix is currently the only one this is offered to,” the document continued.
The deal: “Bring revenue to 10%, provided Netflix fully commits to GPB worldwide.” Perryman confirmed under oath that Google actually offered that deal to Netflix in September 2017.
“Netflix is currently the only one offering this”
Netflix did not accept the deal, he said. Netflix no longer pays Google anything for distribution through Google Play, instead directing people who download the app to subscribe and pay in a mobile browser.
That’s partly because Netflix predicted it could lose money even at 10 percent.
“Assuming all in-app logins for Android came through GPB, Netflix would lose ~$250 million USD on 1 year of logins, even accounting for incremental increases,” reads a line in another internal Netflix document . (Netflix compared signing up in a browser to in-app Google Play payments, it adds, while assuming a subscriber would stick around for 36 months.)
“We don’t see a scenario in which Google’s payment system would outperform, or even match, ours,” Netflix argued.
Google’s lawyer didn’t dispute any of this in the video statement we saw. Instead, Google spent its time confirming that Netflix is available on virtually every video-playing device under the sun – effectively pointing out, without explicitly saying, that an app on Netflix’s scale can afford to bypass the store and relying on a browser login.
Google spokesperson Dan Jackson declined to comment on the Netflix offer specifically to The Verge, but suggested it is normal for Google to offer different rates to different developers. He said: “It’s no secret that Google Play offers a range of fees that take into account the varying rates.” needs of our developer ecosystem or the economics of different industries or app verticals, such as streaming video.” He added that Google’s 2021 Play Media Experience Program (introduced after Epic’s lawsuit) has rates at which apps that use video , music, books and apps ‘can pay as low as 10%’.
While Netflix didn’t acquire Google’s beloved deal, it did acquire one from Apple at the time. Netflix had a “unique arrangement” with Apple to share just 15 percent of its revenue on iOS, half of Apple’s standard rate, according to an email unearthed during the Epic vs. Apple trial.
We don’t know how much Spotify pays Google for its special deal. Ultimately, the figures were not publicly disclosed during the trial.
Update, 11:12 PM ET: Google comment added.