August 2, 2011 | by Andrew Kameka
Since the Amazon Appstore launched in March, many have asked how anyone makes money from giving away premium apps. The prevailing thought was that Amazon paid developers 20 percent of their normal sale price and gave the app favored promotion. It seemed like a win-win situation: Amazon keeps Android fans continuously coming back to its store each day, and developers would greatly increase their visibility and sales.
The Amazon Appstore is actually a win-lose according to one developer. A member of the Shifty Jelly (PocketCasts) development team claims that the Amazon Appstore is “rotten to the core” because it doesn’t pay developers “a single cent” for being featured as the Free App of the Day.
In a blog post detailing a poor experience as the featured app, the developer said that 101,491 people downloaded PocketCasts. Amazon’s developer panel showed $54,805.14 in earnings, but none of that money will find its way to ShiftyJelly HQ because Amazon doesn’t pay. Instead, the company provides “highly valuable placement” as the first app people see when visiting the site and appearing on the front page for 14 days afterward. One would think this would lead to a rise in sales, but ShiftyJelly’s figures were the same in comparison to pre-FAP placement.
We’ve put in a request for comment from Amazon to verify these claims. If true, the Amazon App Store Free App of the Day program has questionable benefits to developers.
Amazon has become a place where users go to get paid apps for free, but the only reason that made sense for developers was because people thought Amazon paid a smaller portion of their sale price and made up for it in volume. Because the audience of people actually buying apps from Amazon is so much smaller than the Android Market, it’s tough to see how giving away apps is feasible unless there’s a direct payment from Amazon.
I’d also wager that Amazon enters into different agreements with different developers. For instance, I doubt PopCap Games or Rovio would enter into such a one-sided venture for Plants vs. Zombies or Angry Birds. Those are major brands that launched as Amazon exclusives, and I’d fall out of my chair if Amazon didn’t offer cash guarantees to make that possible.