Netflix Declines 'Once In A Lifetime' Google Proposal
When it was announced that Netflix declines Google proposalthat would have let them keep 90% of the money they made, a lot of people wondered why they would turn down such a good deal.
There was a chance for Netflix to work with Google and keep 90% of the money it made. This was possible because Google made a special deal that no one else got. Records and evidence from the Epic v. Google trial show that the video streaming service turned down the "once in a lifetime" offer. The company had good reasons for doing so.
This Alphabet company made one of the biggest streaming services a much better offer than we usually hear about. However, Netflix still turned it down.
According to The Verge, Netflix would have been able to keep 90% of the money it gets from Google's Androidoperating system. This would have meant that Google would have only had to take a 10% stake instead of the usual 30%. This was a very special deal that was shown in court papers from the case between Epic and Google. Netflix had the chance, but they didn't take it.
The Epic v. Google hearing is about the future of Google's app store. Epic Games, the company that makes Fortnite, is suing Google. Epic sued Google in 2020 after a fight over in-app purchase fees, saying that the Google Play shop for the Android operating system was an illegal monopoly. It wants Google to make it easier to use third-party app stores, sideloaded apps, and payment systems that aren't made by Google. However, Google says that its demands would hurt Android's ability to provide a safe user experience and compete with Apple's iOS.
Yes, even though it may seem odd, Google was ready to make an exception for Netflix. Google is known for being very strict about the 30% commission it charges app developers for transactions on the Google Play Store. Why?
It's easy to understand why: Google wanted Netflix to be happy. With over 222 million users around the world, the streaming service is one of the most well-known in the world. At that point, Netflix leaving Google Play would have been a big loss for Google. They would have lost a "piece of the pie."
Netflix finally said no to the offer, even though they knew they might lose money if they went through with it. They took away the choice to subscribe through the app, which meant they wouldn't get any in-app purchase commission.
But the deal that Google wants to make with Netflix also affects people who make other apps. If Google was ready to let a big company like Netflix off the hook, why not the rest of them?
Netflix turned down the offer in part because financial projections showed that the company might lose money even at the lower 10 percent rate. Internal figures showed that Netflix could lose around $250 million in a year if all Android app sign-ups went through Google, even taking into account the small boost from in-app signups.
Google's unusual offer to Netflix shows how competitive the app store market is, where big techcompanies like Apple and Google often have a lot of power over app makers. But it also shows how powerful content providers like Netflix are becoming, giving them the power to get better terms.
Netflix may not have taken Google up on their offer, but they did take one from Apple a few years ago. As part of their deal, Apple only got 15% of the sales from iOS. For those who don't know, Apple usually takes 30 percent from developers. However, Netflix probably took them up on their offer because most iOS users in the U.S. are also used to watching videos through streaming services.
Netflix ultimately decided to go its own way instead of depending on outside partnerships. This shows that the company has faith in its own business model and payment system. The offer that Google turned down may have looked like a great chance, but Netflix made its choice based on good business sense and a desire to be successful.
Netflix might have been treated better on the Play Store. Even though it would be nice to keep 90% of the money it made, Netflix thought it would still lose money because of the relationship. Even with Google getting a 10 percent cut, the loss was thought to be a huge $250 million in just one year. This prediction about the money made it impossible for Netflix to accept the offer.