Amazon Teaches App Developers to Smarten Up the Hard Way
Many app developers would trade their favorite development tool for a chance at big-time promotion. Australia-based Shift Jelly got it -- a spot for their Pocket Casts podcast management software as free app of the day on Amazon's (AMZN) Appstore for Android. Overnight, the company went from a few dozen sales total to 101,491 downloads in one day. And then the developers learned that free really does mean free.
They got mad for two reasons. One, sales dropped back to their normal levels right after the promotion. The second was that Amazon had created a perception that it would pay vendors 20 percent of the app list price should the retailer deeply discount an app or even give it away. Shift Jelly just learned the hard way that the software business is tough; lots of people want to make more by ensuring that you walk away with less.
Wet behind the ears
The problem that the developers faced was a lack of business savvy. They were practically guaranteed to trip over themselves in this deal. One of the oldest plays in the book for large companies is to promise small ones exposure. Who in business doesn't want free advertising?
However, it's tough to learn the value -- and lack of it -- in promotion. As an old saying goes, you can die from exposure. In the case of Amazon, the company was calculating in saying that the promotion has value. More accurately, it can, if you handle it right and are lucky. The calculation was that Shift Jelly would jump at giving away the app to get its name out in the world. What Amazon doesn't say is that the biggest promotion value is ... to Amazon. When you want to attract people to a store, repeated giveaways do wonders to catch attention. If the products don't cost you anything, so much the better.
You've got to make free pay
The retailer had everything to gain and nothing to lose from Shifty Jelly giving away what Amazon had to know would be a lot of copies. Getting your product in front of that many people can give a business a real lift, but only if it knows how to take advantage of the opportunity. Here are some of the considerations:
- Choose a product that won't require inordinate amounts of support. Shifty Jelly spent some time fielding 300 emails a day.
- If you don't make money up front, know how you will afterward. Maybe there's an upgrade version with additional features or related items you can sell. Maybe you've developed enough experience with the product to know related items that customers are likely to buy. No matter what the approach, you need a way to convert people into paying customers.
- Make sure the product is self-contained if there is no immediately upgrade path. Shifty Jelly had to purchase extra server hardware to perform the processing that all those free Pocket Casts customers needed.
When you swim with the sharks
Those are all mechanics that you either learn from asking others in advance or by stubbing your toe but hard. The tougher lesson is what it can be like to deal with a distribution channel. Having spent years in that industry, I can attest that it can be a snake pit when you are the product vendor. And you have to know that going in, or the process will bruise your humanity and spirit.
Shifty Jelly knew ahead of time that no money would cross hands. The retailer was clear on that point. But it hinted at the possibilities, invoking major products that supposedly got their start as a free app of the day:
The Free App of the Day promotion is the most valuable and visible spot in the store. It hosted the launch of the likes of Angry Birds Rio, Plants v. Zombies and more. Amazon will not receive any sales rev share from the Free App of the Day; and in fact, with as the Free of the Day for one day, you will receive a subsequent Appstore main page placement for the following 14 days.All these highly valuable placements are at no cost to you. We want to promote your app and in exchange of the placements, at the 0% rev share for one day only.What utter misdirection. Angry Birds Rio was an extension of the mobile game tied to promotion of the animated film Rio that came out this summer. Plants vs. Zombies has been around in one form or another since 2009, though the Android version launched exclusively through Amazon. Neither example was a solo product launch.
All developers are created equal, except when they're not
More importantly, Amazon evoked an assumption that Rovio and PopCap Games both got the same deal as Shifty Jelly. How snort-worthy. Rovio was happy to give away games because it undoubtedly got money from the movie studio (and, for all I know, it might also make money from advertising in the game, as it often does). And an exclusive of an already popular game? Expect that Amazon paid for the privilege.
If the retailer was all that concerned with developers' success, then it would tell them what to expect and underscore the need to have a plan for monetization. But then, when you point out that a lot of positive reviews won't necessarily help sales much because they don't make the product more visible, you undercut your argument to get developers to give product away in the first place.
Amazon clearly played on the hopes of Shift Jelly -- and all other small Android developers. It continues to by leveraging the initial image it set of paying for apps that it gives away. Once Amazon gleaned the PR value, the need to shell out so customers could have free product was unnecessary, and so it went ... without fanfare, of course. It still keeps the promotional value of free items when its goal all along was to build traffic to the Appstore.
Any independent software developer has to expect this. Promises of exposure will do nothing without a plan on your part. Retailers (or any other "partners," for that matter) will say almost anything to get their way. When there's no statement definite enough that you could hold them to it, expect the worst.
Related:
- Look Out Publishers: Amazon Is Backburnering Book/Video Sales
- What Retailers Can Expect From Today's Deal-Shopping, Social-Medialyzing Consumers
- Apple Does Right By Its Developers. Will Google?
- Most Android Apps Make Almost No Money
- Most Apps in the Apple App Store Will Probably Lose Money
Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.
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