Spotify Strikes Unprecedented Deal with Google
In a groundbreaking move, Spotify has secured a deal with Google that allows the music streaming platform to keep all the money from subscriptions made through its own payment system on Android devices. The deal, revealed during the Epic v. Google trial, saw Spotify paying an unheard-of 0 percent commission for subscriptions via its system. For purchases made through Google’s billing system, Spotify only handed over 4 percent, a significant reduction from the standard 15 percent fee.
Google’s head of global partnerships, Don Harrison, defended the “bespoke” deal by pointing to Spotify’s massive popularity and positive impact on Android phones and user experience across Google Play services. Google backed Harrison’s testimony, stating that it’s all about a select group of developers making big moves on Android and Play. According to Google, these investment partnerships are the company’s way of improving the Android and Play experience for everyone and opening up fresh opportunities for all developers.
The historic deal also includes a commitment from both Spotify and Google to a $50 million “success fund,” underscoring the significance and mutual benefits envisioned in their arrangement. The move comes as a surprise, considering Spotify’s previous opposition to high in-app purchase fees. Earlier this year, the music streaming service made a bold move by completely ditching Apple’s App Store billing system to avoid a hefty 30% cut.
Spotify’s partnership with Google highlights the search giant’s willingness to bend the rules for big-name apps. Despite its strong stance against high in-app purchase fees, Spotify has shown a willingness to work with companies like Google to secure better terms. The deal not only benefits Spotify but also sets a precedent for other developers and app platforms to negotiate more favorable payment terms.