Netflix was given a special opportunity by Google to keep 90 percent of its earnings, as revealed in a recent discovery made during the Epic v. Google lawsuit. This was a “once in a lifetime” opportunity for the video streaming behemoth, as this unique arrangement was supposedly not granted to any other business. Netflix, however, declined the offer, giving particular justifications for its choice.
In 2017, Google suggested a discounted rate of ten percent for Netflix’s in-app purchases on Android devices, according trial testimony and documentation. Even though the transaction looked good on paper, Netflix decided it was too good to be true given the expected financial consequences.
If all Android in-app signups were handled through Google Pay Billing, internal estimates suggested Netflix may lose almost $250 million in a single year—even with a 10 percent cut given to Google.
Moreover, Netflix could not see a situation in which Google’s payment system would equal or exceed its own. Dan Jackson, a spokesman for Google, declined to comment on the details of the offer made to Netflix but stressed that Google Play often offers alternative pricing plans to meet the varied demands of developers in various sectors.
Netflix turned down Google’s offer, but a few years prior, it agreed to a different one from Apple. Apple only requested 15% of iOS revenue in this agreement, which is a big drop from its usual 30% developer fee.
The fact that many iOS users in the United States utilize video streaming services may have contributed to the decision to accept Apple’s offer.
