An interesting piece of information came out of the discovery process of the Epic vs. Google trial that began earlier this month. Epic, as you may know, is suing
Google, claiming that the latter’s Play Store is a monopoly. Google, like Apple, takes a percentage of revenue collected for in-app purchases. Initially set at the same 30% rate as the so-called Apple tax, Google reduced the “tax” on the first $1 million in revenue two years ago to 15%, returning to 30% once that threshold was crossed. .
Epic has decided to offer its in-game currency V-bucks for its big hit Fortnite, bypassing Apple and Google’s in-app payment process, eliminating the fees it would have to pay to Apple and Google . Both tech companies responded by booting Fortnite and Epic out of their respective
app storefronts. Epic sued Apple to no avail, and now the game developer has its day in court against Google.
Epic, as you might expect, wasn’t the only company complaining about the payments it had to make to Apple and Google. Spotify and Netflix also complained about the “commissions” they were paying. Android users can no longer subscribe to Netflix from the Android app. According to
The edgea 2022 video deposition from Netflix vice president of business development Paul Perryman revealed that Netflix paid Google 15% of revenue from in-app subscriptions before Netflix decided to stop offering it as an option to subscribers.
Android subscribers can’t subscribe to Netflix directly from the app
Perryman also said that before Google removed Netflix’s ability to offer its own in-app payment processing, Netflix only paid Google 3% of subscription revenue. Evidence presented in court yesterday included testimony showing that before Google removed other forms of subscription payment options from Netflix, it offered the company a special offer that would bring back the percentage of revenue generated by the apps that Google would receive at 10%.
The reduction in the percentage taken by Google would be authorized if Netflix alone joined Google Play Billing (GPB). A Netflix document said Google was proposing to make Netflix a “platform development partner.” The document states that Netflix was the only company offered this partnership.
Netflix executive Perryman testified under oath that the deal, proposed in September 2017, “would increase revshare to 10% on the condition that Netflix fully commit to GPB globally.” But Netflix refused because even after paying 10%, the video streaming company predicted it would lose money. An internal Netflix document states: “Assuming all registrations through the Android app go through GPB, Netflix would lose approximately $250 million over a year’s worth of registrations, even accounting for the incremental increase.” »
Today, Netflix simply tells Android users who download the Netflix app to subscribe to the service through their devices’ mobile browser. As a result, Google currently pays 0% of its revenue to Google, even though Android users cannot sign up directly from the app. As for Android users, it’s a small inconvenience that probably won’t stop most people from signing up for a subscription.
