Gigaom

The Cost of Being Amazon's Free App of the Day


As a recent free app of the day in Amazon’s Appstore, Shifty Jelly’s Pocket Caster Android app, benefited hugely from the exposure. Sales of the software jumped from 20 per day to more than 101,491 on the day Amazon offered it at no charge. It sounds as if another mobile app developer strikes gold, except for one small detail: Shifty Jelly didn’t earn a dime.

Amazon shares application store metrics with developers, which is how Shifty Jelly knows the download figure. Amazon even calculates the app earnings and says the developer would have earned $54,805.14 based on the 20 percent revenue split it had previously agreed on. But that figure went out the window once Shifty Jelly agreed to be the featured free software.

In fairness to Amazon, the company clearly indicated in writing that by agreeing to be the free app, Shifty Jelly would not earn any revenue from downloads that particular day. According to the developer’s blog, this led to an internal debate over whether to accept the terms or pass.

WAS THE EXPOSURE WORTH IT?

Since the team had branched out from iOS apps and begun experimenting on Android, it chose to roll the dice. Unfortunately, even with more than 100,000 downloads in a day (and potential reviewers to help build buzz), sales returned back to around normal levels, even as customer support demands rose:

“Did the exposure count for much in the days afterward? That’s also a big no, the day after saw a blip in sales, followed by things going back to exactly where we started, selling a few apps a day. In fact Amazon decided to rub salt in the wounds a little further by discounting our app to 99¢ for a few days after the free promotion. All we got was about 300 e-mails a day to answer over the space of a few weeks, that left us tired and burnt out.”

Again, Amazon didn’t do anything illegal or surprising here; the terms were clear to Shifty Jelly, which accepted them. But the situation highlights two problems in the fast-growing mobile economy: discoverability and centralized control.

BUILDING SOME BUZZ

Small development shops have the odds stacked against them when it comes to app discoverability. Without today’s app stores, these folks have to build their own buzz and channel efforts into marketing, when surely most of them would rather be coding. So prominent placement in a store can certainly help. And yes, the storefront owner should collect some “rent” for such placements or promotions.

A revenue-free experiment is simply too much, however. I hit Amazon’s free Android app page daily and often take advantage of it. But the best I can do to actually support the developer is to share news of the app or leave a positive review if the software warrants one. Is that enough?

In Amazon, Shifty Jelly’s Pocket Caster has 233 reviews, averaging 3.5 stars out of a possible five. Yet, according to the company, app sales are right back where they were before the free promotion. Essentially, the company is no better off than before the promo. Amazon, however, has everything to gain and little or nothing to lose by giving such apps away. It has more people coming back daily for free Android apps, and it cost nothing to develop or support them. All the risk is put on the developers, who may or may not come out ahead over time as they seek to have their apps more discoverable.

DEVELOPERS AT A DISADVANTAGE

That burden on devs goes beyond financial risk, however; it illustrates the challenges of centralized control by Amazon and others who run app stores. Apple, Amazon, and Google, to name a few, make the terms, which developers can either agree to or decide to go it alone. But in a sea of software, can developers really afford to sell their wares independently when everyone is shopping in app stores?

Centralized control also brings other dangers, such as waiting for application approval, at least in the case of the iTunes App Store and Amazon’s Appstore, which can take up to two weeks for Amazon, said Shifty Jelly. Amazon has even modified the Pocket Caster description, according to the developer, saying the software can “instantly refresh up to 100 podcasts,” a number the developer claims Amazon simply made up. And although this example is limited to Amazon, a centralized store can even set the price of a third-party app.

PREPARING FOR ITS TABLET

With Amazon reportedly readying an Android tablet of its own, it makes sense for the company to have its own app store to complement the Android-supported MP3 store and Cloud Player software. I like the idea of a more finely curated assortment of Android apps, as well. But terms of the free app of the day are stacked far too much in Amazon’s favor, especially when it might be making money off of actual hardware sales and needs developers for a successful tablet.

The time to tweak Amazon Appstore practices are now, before any such Android tablet arrives. That could help attract even more developers to submit their Android apps, just in time for a hardware launch, making the device more attractive. Unfortunately, Shifty Jelly isn’t the only dev that has questioned the value of Amazon’s app store recently. But Amazon has built momentum for its store in anticipation of its future tablet, to lure in both consumers and developers.

Why? It won’t surprise me if an Amazon-branded Android tablet allows software only from Amazon’s Appstore, and not from Android Market. Apple’s iOS devices are limited to iTunes App Store, and the Barnes & Noble Nook Color has its own app store as well. By building up buzz for its Appstore, Amazon can have more control over the ecosystem and experience. If that’s the case, Amazon should want devs to be happy, not upset that they theoretically lost $54,805.14 in potential sales.

Also from GigaOM:

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