There are north of 70,000 Alexa skills on the market today, capable of helping consumers do everything from booking an Uber to buying their groceries to playing a trivia game to kill some time while waiting for the pizza ordered via Alexa to arrive.
But the ongoing challenge for the developers of those Alexa skills is monetizing them. While app developers have various paths to making big money on their creations, the avenues to remuneration are fewer and further between for voice skills developers. According to CNET, the market for making Alexa skills was worth a mere $500,000 in 2016 — during the same time period when apps in the iPhone App or Google Play stores brought in roughly $43 billion in revenue.
That imbalance has improved — if not evened out — over the last two years, as Amazon has made several moves to make it easier for developers to make money off of the skills they build.
In 2017 Amazon rolled out its direct rewards program for developers whose apps lead in certain categories on the platform in terms of customer engagement, usage, visits, new customers and ratings. The program was popular, and the payouts often came to grateful programmers. The monetary rewards, however, while appreciated, were generally not enough to allow developers to quit their day jobs — and most developers, of course, didn’t receive any rewards because topping a category is not easy to do.
Last spring, however, Amazon announced two new additions intended to make it easier to make money programming skills for Alexa.
The first change came in how developers can charge for the content of their apps. While all apps on Alexa are free, developers for the first time last spring were given the ability to charge customers to unlock premium features within Alexa skills. Those purchases can either be one-offs for specific content, or ongoing subscriptions. Developers own 70 percent of revenue from the in-skill purchase, while Amazon grabs 30 percent.
Amazon’s other great leap forward for voice commerce was opening up Amazon Pay to third-party developers so that they can sell their products through their Alexa skills and let users buy with their saved Amazon payments credentials.
“I think it was getting really crucial that Amazon make these apps something that you can make money off of,” AI Developer Chandra Pradyumna told PYMNTS at the time of the announcement. “And developing for natural language interaction is actually quite hard already, when mobile apps are a much better known commodity.”
And, as of this week, Amazon is making it even easier for developers to roll out skills that can be monetized — with the launch of new developer tools that make it easier to insert in-skill purchases.
With the new tools, skills developers can now directly add in-skill purchases via the Alexa Developers Console. Prior to this upgrade, developers needed to hand-code their own in-skill purchases via command-line interface. The new tools include a step-by-step instruction guide — and an automated setup which means going forward instead of having to code anything developers can basically check off a few boxes and call it a day.
“Now, you can monetize and publish your skills all in one place, further simplifying the process to build a skill with ISP [in-skill purchases] and empowering you to create delightful, premium experiences for Alexa customers to enjoy,” reads Amazon’s blog post announcing the tools.
And the intention of this upgrade — and others that Amazon has alluded are soon to come — is making developers money. Paul Cutsinger, an Amazon Alexa exec who handles developer education and outreach, more or less said as much at an industry event last week.
“It’s important to us that you guys make lots of money, because that’ll help you continue to create better content and better experiences for our users,” Cutsinger said. “We care most deeply about making sure that the customers have a phenomenal experience. We think the best way to do that is to make sure that you guys [developers] have the money you need to make those experiences.”
Those experiences do have some limits. Kid skills aren’t eligible for in-skill purchases and parents can PIN code protect voice purchases or use Amazon voice-recognition features to prevent little ones from doing unauthorized buying. Amazon also says on its site that only skills published in the U.S. Alexa Skill Store can currently offer in-skill purchases, though the company also says that it plans to expand in-skill purchase capabilities to additional countries soon.
Good news, we imagine, to the global community of developers looking for incentives to start programming for voice.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More