Netflix Declines Rare Offer from Google, Opting for Apple's Deal Despite Higher Cut

 Netflix Declines Rare Offer from Google, Opting for Apple's Deal Despite Higher Cut

Netflix

In a surprising turn of events, Netflix had a unique opportunity from Google, allowing it to retain 90 percent of revenue from in-app purchases on Android. This exclusive deal, reportedly not extended to any other entity, was characterized as a 'once in a lifetime' offer. However, despite the enticing terms, Netflix chose to decline, and the Epic v. Google trial shed light on the reasons behind this decision.

The 2017 offer from Google involved a reduced 10 percent cut for Netflix's in-app payments on Android, as reported by The Verge. While on the surface, this appears to be a lucrative proposition, Netflix's internal assessments revealed a potential financial setback. Even with a mere 10 percent going to Google, the streaming giant projected losses, estimating approximately $250 million in a single year, assuming all Android in-app signups utilized Google Pay Billing.

Netflix's decision was further influenced by a lack of confidence in Google's payment system surpassing or even matching its own performance. Google spokesperson Dan Jackson, when approached by The Verge, refrained from commenting on the specifics of the offer to Netflix but emphasized that providing different rates to developers was a standard practice for the tech giant.

Interestingly, Netflix had previously accepted an offer from Apple, where the Cupertino-based company only claimed a 15 percent share of revenue on iOS. This stands in contrast to Apple's typical 30 percent charge for developers. The rationale behind Netflix's acceptance of Apple's deal may be attributed to the strong presence of iOS users in the U.S. who are accustomed to media consumption through video streaming services.

The dynamics of these negotiations underscore the strategic decisions made by streaming services in navigating partnerships with major tech platforms. Netflix's careful evaluation of offers from both Google and Apple highlights the intricate financial considerations and competitive landscape within the digital ecosystem.