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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  • triangle

    There is no downside to the Amazon appstore for consumers or developers. Amazon provides another channel for developers to distribute their apps and promote their product. If a developer can’t produce a product that will actually sell after it is promoted (or sampled for free), then so be it. That is the market. That’s the way capitalism and the free market work.

    As a consumer, I love the Amazon appstore. And Amazon generates a ton of goodwill and loyalty for the Amazon brand overall.

    Long live the Amazon appstore.

    • Taylor Wimberly

      I agree. It seems like Amazon explained the terms of the free app of the day before the developer accepted them. If you don’t like the deal, then don’t do it.

      • codesplice

        If developers agreed to a shit deal, that’s on them. But from what I am seeing, Amazon is trying to change the terms of the deal after the fact.

        • joe

          That is just plainly not true. Amazon made it explicitely clear that the 0% terms applied to the special app of the day promotion. This is a separate promotion the developer had to opt into.

    • codesplice

      There is quite obviously a downside for developers if Amazon’s tactics cost the developer more than they bring in (see the Shift Jelly example). Once an app is released on the Amazon store, developers effectively lose all control over it. This is shady, to say the least, and makes me think twice about supporting it as a consumer.

      • joe

        It would be “shady” only if they were hiding this fact. They state this loudly up front, in fact its the key differentiator to this market.


    I agree, it in the Devs hand.. They cant turn around and them blame Amazon for it. From a personal standpoint, if free app of the day goes then I go. I would not have any use for the Amazon appstore after that. Truthfully. If I were to see them throw Holiday sales , much like the IOS appstore does then maybe.

  • Epiktetus

    I’m a big fan of the App of the Day. Who wouldn’t love them some free stuff. And about 1 in 10 turns out to be good enough that I would have paid for it if I had known about it. Mighty Grocery turned out to be so handy that I bought one for my wife’s phone so we could share our shopping lists. I also grabbed PocketCasts when it was free, but now I’m thinking that I’ll go buy it on the normal market to support them, as this is a daily-use app for me.

    For another example of how Amazon is not making devs happy, check out this story of a dev that pulled his app from their market after being FAOTD (another one I’m thinking of buying to help support):

  • Mark

    Boo f*cking hoo. Cry me a river. The dev knew what he was getting into before he put his app on Amazon. They didn’t come to his house and forcefully upload the app to their store. He did it on his own will so he knew what he was getting into.

  • codesplice

    “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.”

    Some people are apparently missing that Amazon is trying (and succeeding) to change the terms of the agreement they make with developers AFTER the app is made available on the Amazon App Store. If Shifty Jelly had gotten the 20% that they were supposed to for the 100,000 downloads of the app, then they probably would have had the money for needed server upgrades. Instead, they got nothing, and were left having to support 100,000 new customers out of pocket.

    • joe

      You are wrong. The 20% is from normal app sales. This is a special promotion that the developer had to individually opt in to, and agree to new terms to. Noone got victimized here.

      • Rich

        No, you are wrong. In this comment and every other you have made. The contract with developers plainly states that if they offer the app for free they will pay the developer 20% of what it usually would cost.

        Amazon offering it for free on any given day is the same as Amazon offering it for free on the “App of the Day” feature.

        They are changing the rules later, after the contract has been entered. I personally would not be surprised if some breach of contract (assuming there is no written signed agreement made for the “app of the day”) lawsuits start popping up.

  • Justin Shapcott

    As a developer, I chose not to enter into the Amazon Appstore due to the less than desirable terms. Every time I see a developer post about their experiences, I gain more confidence that I made the right decision.

    As a consumer, I chose to download the Free App of the Day because, based on the information that was available (and the knowledge of the terms for developers), I was under the impression that Amazon was obligated to pay the developer regardless of the “selling” price. When I found that wasn’t the case, I dumped the Amazon Appstore altogether.

  • String

    The author of this post (along with many of the commenters) really needs to get his facts straight before jumping on the sensationalist Amazon-bashing bandwagon.

    First, the name of the dev of Pocket Casts is Shifty Jelly, NOT Shift Jelly. Sure, that’s a relatively small mistake, but if you’s got one of the basic facts of the story wrong, you’re not off to a good start.

    Second, and more fundamental: Amazon’s *ordinary* terms do state that they’ll give the dev a minimum of 20% of the app’s list price. HOWEVER, before an app goes on FAOTD, there is a separate agreement that neither Amazon nor the dev will make anything off it that day. This isn’t “changing the terms after the fact”, it’s a separate deal, agreed to in advance by both parties. If Amazon offers a dev FAOTD, and the dev doesn’t like the *clearly stated* terms, s/he is under no obligation to proceed.

    Both of these facts are independently verifiable. Please stop pushing misinformation. Thanks.

  • Ziggy

    I think Amazon might be differentiating between a ‘normal’ promotion where they might decide to give an app away for free (in which case the developer might still get 20% of list price), and the Free App of the Day promotion, where the terms are different (0% revenue share, as reported by multiple developers).

    I also wonder if the 0% revenue share applies to companies like Rovio and Popcap. With the Angry Birds Rio launch, IMO that’s clearly a case where Amazon needed the publicity more than Rovio did, and I would expect that Amazon paid a lot of money so they could give that game away for a day.

    • Justin Shapcott

      I’m sure you are correct. And I’m also sure that in almost every case, it is not advisable for a developer agree to do the Free App of the Day. For me it’s not about the lack of revenue for that day… the developer agrees to that, they can’t complain. I have just not heard of anyone actually gaining REAL sales volume after appearing as the Free App of the Day. Frankly, in many cases, everyone that would have thought about buying your app (and even those who wouldn’t have) probably got it that day. Now, if they had a limited number of downloads for free, then I could see it working better in the long run (than it does as is).

      • Ziggy

        > And I’m also sure that in almost every case, it is not advisable for a developer agree to do the Free App of the Day.

        That’s pretty much the conclusion I came to as well. Especially for smaller developers with few apps on the market. Like you said, most people who might have otherwise bought your app, will have got it for free.

  • aj

    The one thing i absolutely hate about amazon is that if i dont have an internet connection then guess what i cant play games i payed money for and downloaded. Granted there very few times where i dont have connection but still next time i want to on a trip and spend all my time playing plants vs zombies or peggle guess what???? i wont be able to.

  • max cox

    I have one app there, and at this point I don’t have much interest in putting additional ones up. I haven’t seen the benefit of it, really, although I think if you have associated products for sale on Amazon (some kind of accessory your software uses, for example), there might be a benefit to having an app on there. My guess is that Amazon’s upcoming family of tablets will have the Amazon App store preinstalled instead of Android Market. It will be better integrated with the OS, since they can put their app-store app on the system partition (which is required for a package installer to work seamlessly). Then the whole “underdog as overlord” play they’re apparently making will make more sense. It frankly doesn’t right now.

    • Justin Shapcott

      Perhaps, the trick is to have multiple paid-for apps on the Amazon Appstore when agreeing to the Free App of the Day. Maybe then there is a good opportunity to cross-sell. Get “App X” for free, love “App X”, notice the developer also has “App Y”, purchase “App Y”, everyone is happy(er).

  • Dvogon

    A huge downside to the Amazon app store that many developers seem unaware of, is that it is unavailable in most parts of the world. Putting you app up on Amazon makes it impossible for most Android users to pay and download it.

  • Mike Leahy

    This occurrence and the business tactics being used by Amazon targeting Android first indie & small developers is implicitly anti-Android. Indies that have a hit or developers with an established brand that have hits already on the iPhone have additional leverage to negotiate exclusivity agreements when initially releasing an Android version in addition to having negotiation power to set a fair percentage per unit price for the free app of the day promotion. That these negotiations with Shifty Jelly happened in private are already enough proof that not all developers are taking the same deal.

    I’m not refuting that the dev in question accepted the deal and knew about the deal. However, this kind of promotion when forfeiting revenue share only works if your business model / app is subscription based or up sales in app purchases. Devs should now take note of this and not accept the 0% rev share unless they can up sale to the freeloaders.. erm new users.

    What I’m refuting is that this tactic from Amazon is targeting Android developers as a class and segmenting the weakest ones off, those who developed for Android first and don’t have a hit or significant sales on the app store this not even taking into account say performance on the Android Market. So yeah.. In short this tactic is implicitly anti-indie / small developer and anti-Android.

    I thank Shifty Jelly from coming forward with their account. I’m sure we will hear more in the future. However, now that this is out in the open we can have a public debate on how indies and small developers who focused on Android first can really make a living.

    • Mike Leahy

      [A little more commentary]

      The public perception let alone the perception of developers up until
      now when they are signing the public contract is that when apps are
      made free a minimum of 20% is paid. The public contract doesn’t state,
      “except for special promotions for which additional terms will have to
      be negotiated” or “except for the free app of the day promotion for
      which you will receive 0%”. The additional “deal” or terms demanded
      from indie & small developers who lack sufficient leverage to
      negotiate with Amazon and likely have no or minimal legal
      representation to forego any revenue reeks to me of breaking
      _consideration_ and pre-existing duty despite any notions of further
      mutual agreement. This in part because the pitch from Amazon is
      dishonest in associating these new terms in a manner as if Rovio or
      PopCap accepted similar terms; which I think not. It is also a fairly
      statistically known lack of value for app developers with a standard
      non up-sale business model. In addition app developers have already
      given consideration in the public contract to Amazon by agreeing to
      allowing them to price the app independent of list price; the return
      consideration from Amazon is 20% min share of list price when an app
      is free.

      I’m not a lawyer(tm), but what Amazon is doing with the additional
      negotiations pressuring the weakest (in leverage) developers into
      accepting nothing for their product seems dubious at best. It’s not a
      new deal for a new thing. Free is free whether it’s part of the free
      app of the day or not according to the original contract as there is
      no distinguishing terminology used. I think a good lawyer could make a
      case for any additional agreements to be void. As things go though
      anything of this nature would have to likely be a class action as
      opposed to individual developers considering who is being targeted by
      Amazon’s greed (those with inadequate leverage / resources). Sad thing
      is Amazon knows this and thus will likely continue these practices. IE
      the price for getting caught and paying up if anything ever does come
      around will be far less than establishing the app store and
      positioning it against other stores via the free app of the day on the
      backs of the least influential developers.

      On the whole the Amazon Appstore being anti-Android statement above. I
      know that may have sounded a bit off, but it’s anti-Android insofar
      that at worst developers in the weakest class segment are ones who
      developed for Android first (have no hits yet, etc). It’s also anti-
      Android because the Amazon Appstore creates asymmetric value where
      Amazon wins big and consumers win big (sort of), but this is all
      occurring on the backs of the developers who are losing big as a
      class. If the Amazon Appstore built a culture of value where consumers
      were not debased to “freeloaders” (IE what is the percentage presently
      of folks saying they only use the Amazon Appstore for the free app of
      the day?), developers were paid fairly (in this case by the public
      contract which is already dubious in some parts), and Amazon still
      made a profit in the long run that is one thing. I just happen to be
      100% pro-developer and all I can say is that hope the IGDA and others
      continue to weigh in on the matter as these revelations are not
      improving the already questionable public tactics Amazon is using for
      their app store. I also hope other developers come forward with their
      accounts though understandably that is a lot to ask for in general.

  • Rev. Spaminator

    I would like to point out another disservice that the Amazon store does to developers. As a complete freeloader I have never purchased anything from the Amazon App Store. As such I am blocked from making comments about any app I download for free. This is one of the most important benefits a dev can get from the FAOFTD. As a programmer myself I would certainly want to know what people thought of my product.

  • WickedToby741

    They need to get these rumored tablets out there. If they offer these tablets cheaply and push them heavily on, people will start buying them. Assuming that the Amazon Appstore is the default and only app market pre-loaded onto the devices, more apps will be submitted as the tablets gain in popularity. If someone owns an Amazon tablet and an Android phone, they’re more likely to most of their app shopping for both in the Amazon Appstore since its presumably the only option on the tablet (until it gets unlocked and rooted and gets custom ROMs and such).

  • madethelflint

    I think my main gripe with the situation is that Amazon is pushing this false idea that if people get it for free on one day, that will drive sales on days when it’s not free. Sure, devs should be smart enough to know better, but it certainly sounds enticing. The problem is that isn’t a sound business model (unless, as others pointed out, your app is content/subscription driven). Sure people shouldn’t buy into hype, but it’s just kinda’ “dirty” of Amazon to go around enticing people to buy into their stupid idea (I have the same gripe with Apple, Microsoft, and a few other companies that have used similar tactics).

  • Todd R. Levy

    This article and these comments are very thought provoking. My name is Todd R. Levy and our family friendly Android app store, BloomWorlds, is launching soon.

    I would like to share our fair and flexible developers terms

    The developer picks the plan and the price of the app (s). We would love your feedback.

    Thank you,