Aug 03 AT 10:06 AM Dustin Earley 27 Comments

When Amazon opened the doors to their Android Appstore some four months ago, no one knew exactly how the project would turn out. It was exciting because before Amazon, alternative app stores never made much of an impact. And if anyone could change that, it would have to be the company looking to sell everything from “A” to “Z.”

Well things haven’t been all bad for the Amazon Appstore since launch, but they haven’t been all good either. In a recent sit down with Venture Beat, Aaron Rubenson, director of the Amazon Appstore, spilled the beans on how the Appstore has fared so far.

According to Rubenson, things are great. He says that despite the Amazon Appstore only housing some 14,000 apps (that’s still a lot more than the 4,000 they started off with in late March), sales of apps have been very successful. Over a million in fact. He also says that the limited number of apps introduced so far has been intentional. In order to better catalogue apps, work in discovery options and fine tune cross promotions, a limited number of quality apps is necessary.

The limited number of apps available has also helped highlight areas where Amazon needs to spend more time, such as games. Games are the largest portion of Amazon’s sales at this point, something Rubenson says is “more or less tracking with what the industry sees.” While Rubenson couldn’t openly respond to a question on whether or not Amazon was working on developing games of their own, the possibility is certainly there.

Other than sales numbers and monetization, the hot subject of the night was Amazon’s Free App of the Day and developers’ rights. When Venture Beat asked, “does the promotion of an app as a free app really help the app later on when the promotion ends and then you start selling it for money again?”, Rubenson responded with:

“When developers are trying to get their product discovered, the promotion as a free app of the day is a very powerful marketing vehicle. Then once that core base of customers has a product installed, they tell their friends about it. That spurs more downloads. It rises in popularity in our store. That makes it more popular as people are scrolling through the bestseller list and notice it there. So it starts the virtuous cycle from a marketing perspective. And then increasingly as developers are using various forms of monetization post-purchase, such as advertising or in-app purchasing technology, there are all sorts of downstream monetization opportunities as well once you have that initial base.”
Aaron Rubenson Amazon

In theory, Amazon gives an app away, that app becomes popular, more people start buying and the developer walks away with more business and more money to put in the bank. Unfortunately, that’s not always how it works. You see not only does the “virtuous cycle” not always work that way, but Amazon also has a few secrets they’re looking to hide.

In an article by TechCrunch’s Jason Kincaid, Kincaid writes that he was “very clearly told that even if Amazon decided to make an app free, developers would still be making 20% of their list price. In other words, they’d still make money.” Amazon is now trying to back out of that. Developer Shifty Jelly is a prime example of how this can negatively affect a company.

When Shifty Jelly’s Pocket Casts was scheduled to hit the Appstore as the Free App of the Day, Amazon pressured Shifty Jelly into taking exactly 0% of what the app originally cost instead of the 20% Amazon promised. Not only that, but Amazon was kind enough to ask by “putting really restrictive clauses at the bottom of their emails,” that “…no one is even allowed to discuss these back door deals they are doing.” Shifty Jelly eventually agreed to the 0%, as to get in on some of that marketing action Rubenson is so keen on leaning on, and the outcome was worse than they could have possibly imagined.

Along with getting no money for the over 100,000 copies of their app that was given away that day, Shifty Jelly has seen no jump in sales numbers whatsoever. In fact the company is losing money because now they have to pay to maintain new servers for everyone who took advantage of Amazon’s generous offer. Sounds great, right?

As I said at the beginning of all this, things haven’t been all bad for the Amazon Appstore since launch, but they haven’t been all good either. They’re making great strides in app discovery and figuring out new ways to promote apps, though at what cost? By using secret money-grubbing marketing tactics and putting developers out of business? If that’s the case, then it doesn’t sound like Amazon is really doing any good at all.

People have been reaching out to Amazon for questioning, and believe me, everyone is eagerly awaiting a response.

Source: TechCrunch

Dustin Earley: Tech enthusiast; avid gamer; all around jolly guy.

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