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Summary:

As a free app in Amazon’s Appstore, Shifty Jelly’s Pocket Caster Android app, benefitted hugely from the exposure. Sales jumped from 20 per day to 101,491 sales on the day Amazon offered it at no charge. But there’s one problem: The company didn’t make a dime.

amazon-appstore-featured

As a recent free app of the day in Amazon’s Appstore , Shifty Jelly’s Pocket Caster Android app, benefitted hugely from the exposure. Sales of the software jumped from 20 per day to more than 101,491 on the day Amazon offered it at no charge. It sounds like another mobile app developer strikes gold, except for one small detail: Shifty Jelly didn’t earn a dime.

Amazon shares application store metrics with developers, which is how Shifty Jelly knows the download figure. Amazon even calculates the app earnings and says that the developer would have earned $54,805.14 based on the 20 percent revenue split it had previously agreed upon. But that figure went out the window once Shifty Jelly agreed to be the featured free software.

Is the exposure worth it?

In fairness to Amazon, the company clearly indicated in writing that by agreeing to be the free app, Shifty Jelly would not earn any revenues from downloads that particular day. According to the developer’s blog, this led to an internal debate over whether to accept the terms or pass.

Since the team had branched out from iOS apps and begun experimenting on Android, it chose to roll the dice. Unfortunately, even with more than 100,000 downloads in a day (and potential reviewers to help build buzz), sales returned back to around normal levels, even as customer support demands rose:

Did the exposure count for much in the days afterwards? That’s also a big no, the day after saw a blip in sales, followed by things going back to exactly where we started, selling a few apps a day. In fact Amazon decided to rub salt in the wounds a little further by discounting our app to 99 cents for a few days after the free promotion. All we got was about 300 emails a day to answer over the space of a few weeks, that left us tired and burnt out.

Again, Amazon didn’t do anything illegal or surprising here; the terms were clear to Shifty Jelly, which accepted them. But the situation highlights two problems in the fast growing mobile economy: discoverability and centralized control.

Look at me! Look at me!

Small development shops have the odds stacked against them when it comes to app discoverability. Without today’s app stores, these folks have to build their own buzz and channel efforts into marketing, when surely most of them would rather be coding. So prominent placement in a store can certainly help. And yes, the storefront owner should collect some “rent” for such placements or promotions.

A revenue-free experiment is simply too much, however. I hit Amazon’s free Android app page daily and often take advantage of it. But the best I can do to actually support the developer is to share news of the app or leave a positive review if the software warrants one. Is that enough?

In Amazon, Shifty Jelly’s Pocket Caster has 233 reviews, averaging 3.5 stars out of five. And yet, according to the company, app sales are right back where they were before the free promotion. Essentially, the company is no better off than before the promo. Amazon, however, has everything to gain and little or nothing to lose by giving such apps away. It has more people coming back daily for free Android apps and it cost nothing to develop or support them. All of the risk is put upon the developers who may or may not come out ahead over time as they seek to have their apps more discoverable.

Devs don’t make the rules

That burden on devs goes beyond financial risk, however; it illustrates the challenges of centralized control by Amazon and others who run app stores. Apple, Amazon, and Google to name a few make the terms, which developers can either agree to or decide to go it alone. But in a sea of software, can developers really afford to independently sell their wares when everyone is shopping in app stores?

Centralized control also brings other dangers, such as waiting for application approval, at least in the case for the iTunes App Store and Amazon’s Appstore, which can take up to two weeks for Amazon, said Shifty Jelly. Amazon has even modified the Pocket Caster description, according to the developer, saying the software can “instantly refresh up to 100 podcasts,” a number the developer claims Amazon simply made up. And although this example is limited to Amazon, a centralized store can even set the price of a third-party app.

Why is Amazon building up the store?

With Amazon reportedly readying an Android tablet of its own, it makes sense for the company to have its own app store to complement the Android-supported MP3 store and Cloud Player software. I like the idea of a more finely curated assortment of Android apps, as well. But terms of the free app of the day are stacked far too much in Amazon’s favor, especially when it might be making money off of actual hardware sales and needs developers for a successful tablet.

The time to tweak Amazon Appstore practices are now; before any such Android tablet arrives. That could help attract even more developers to submit their Android apps, just in time for a hardware launch, making the device more attractive. Unfortunately Shifty Jelly isn’t the only dev that has questioned the value of Amazon’s app store recently. But Amazon has build momentum for its store in anticipation for its future tablet and lure in both consumers and developers.

Why? Because it won’t surprise me if an Amazon-branded Android tablet only allows software from Amazon’s Appstore, and not from the Android Market. Apple’s iOS devices are limited to iTunes App Store and the Barnes & Noble Nook Color has its own app store as well. By building up buzz for its Appstore, Amazon can have more control over the ecosystem and experience. If that’s the case, Amazon should want devs to be happy; not upset that they theoretically lost $54,805.14 in potential sales.

  1. Richard Garrett Tuesday, August 2, 2011

    No fun at all for Jelly Caster and now a click on the link you provided says the app is no longer available. FYI and based if I remember correctly on one of your recommendations, I checked out SwiftKey hoping that it was still a free app. Alas, it wasn’t but I bought it anyway based on your suggestion. Still like it, too!

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  2. If they couldn’t afford to give away their app why did they agree to the “Free-App-of-the-Day” promotion?

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    1. Relwal, the developer certainly accepted the terms and got what was agreed to: zero revenues on the day of the promo. I was pretty clear about that. They simply didn’t gain anything from the exposure and Amazon essentially reaped all the rewards.

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      1. The difference is that Apple takes 30% but they create a win-win-win scenario for Apple, developers, and consumers.

        It makes you wonder. Why is that Apple is the ONLY mobile company that boasts about the size of the checks it writes to developers?

        Amazon is only interested in winning for itself, and if developers get screwed, so what? There are other developers and other apps to take advantage of. Interesting that when Apple features apps on iTunes, they don’t ask for a payment? Apple doesn’t seem to feel the need to ask developers to change the price, adjust their take to promote the iOS ecosystem, or otherwise steal from the hard work of developers to enrich themselves.

        Funny how Amazon does.

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      2. I wholeheartedly disagree. Lets look at what was gained and lost by the players in this little drama.

        _Amazon_: An unknown sum of people, presumably well more than 101k, looked at the Amazon app store that day to see what the free app was. Perhaps a fraction of those were new to the Amazon app store so they gained some market share.

        _Shifting Jelly_: Their download count jumped by *101,491*! They gained 233 reviews! Show of hands, how many of us, lacking any other details use download count and reviews as a rough gauge of whether an app is worth/safe to download?

        What was lost? Presumably some future revenue as some of the people who may have purchased the app now have it for free. But what’s conspicuously left out of this article is this quote:

        “To add insult to injury Pocket Casts relies on a server to parse podcast feeds (allowing instant updates on your phone), and all these new users forced us to buy more hardware just to meet demand. Hardware that we are going to have to support indefinitely at our own cost.”

        They *choose* to give the app away for free *knowing* that there would be additional support costs involved. Shifting Jelly is bitter that they made a poor business decision and are trying to Shift (pun intended) the blame to Amazon.

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  3. In a painful way, Amazon has done them a favor by letting them fail early. If that many people downloaded and people still don’t care about it, maybe their app isn’t as desirable as they hoped it would be, although they should be a little patient about it. It’s not like even one tenth of the free downloaders are going to tell all of their friends to buy it; if they really liked it and told their friends, maybe their friends got a free download also.

    Also, it’s not like they have lost that much revenue, as their sales before the free download were insignificant. They didn’t have to spend money to get those free customers (unlike a lot of websites), and while they have some one-time support costs associated with the give-away, that’s a marketing expense. They got 100K beta users, and now they get to see what kind of product they have. If their company is going to go out of business because of missing out on $50K of revenue, they weren’t going to last long anyway.

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    1. Completely agree, KenG.
      Kevin, Given the problem with discoverability, with NO additional cost, the developers got a lot out of this deal.
      Saved on the marketing expense to get 100,000 downloads and the notional spend on acquiring the ~10% (10,000) – reviews/feedback/comments/ratings. Plus future sales, assuming they continue developing apps, will also benefit given that one of their apps was downloaded 100K times.
      If anything, Amazon, has something to lose here if their pick isn’t appreciated by their visitors.

      Subhash

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      1. I have been reading this story covered on several websites and if it is a marketing ploy, it worked. Although, I don’t think it deserved this much attention. Whether you do a freebie promo on an Appstore or any storefront, you cannot expect any revenue.

        I agree with KenG and Srinivas.
        As a non-developer who has experience with purchasing apps on iOS and Android stores, I will say that if this developer expected to earn $54,805.14, he is living in a dreamland. I haven’t downloaded or used their app but from salestrend I will say, on the best of best days, they can’t expect more than 100 sales. So, at best, eventhough there were 101,491 downloads, they lost the revenue worth 100 sales, i.e. $270. Almost all who downloaded, will not use it or delete it soon. So for $270, top placement on Amazon is a steal. I don’t know why are they crying foul.

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  4. anonymous coward Tuesday, August 2, 2011

    I don’t see how the terms are stacked in Amazon’s favor at all because Amazon also gives up their portion of the proceeds too. It’s a ‘free app’ not a ‘don’t pay the developer their cut app.’ The number in the title is pretty ludicrous by the way, it’s obvious none of those reasons are real so why even bring them up? It’s a transparent rhetorical trick to make it look like this cost the dev $54,805 when it really didn’t cost them anywhere near that much.

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  5. Cheaper creates contrast and can be used advantagiously.
    Free is special. Doing this stuff for free is a huge mistake.

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  6. The app is called Pocket Casts
    Latest, Amazon won’t let them remove the app from Amazon App Store unless they also agree to remove from Google Market.
    They do make money on iOS development and have been experimenting with Android. They don’t like ads and haven’t found the Android developement financially beneficial.

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  7. The developers agreed to have their app be free for a day in the first place. When Amazon paid $0 for $0 sales , the developers cry?

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  8. Seems to me that the author and the developer have missed the point of the free app promotion.
    They have to look at the long term value of acquiring each customer and develop additional revenue streams or perhaps a lite version of the software that they can upgrade to a paid for version.
    At the very least they now have over 100k new customers to sell other stuff too if they want.
    Seems like a good deal to me.

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  9. Such silliness. Shifty Jelly was selling 20 downloads on a good day – and they can survive on this $37? Resellers offer product developers a chance to promote their products and the terms are very open and clear. The perspective of Shifty Jelly is a bit myopic; consumer demand and brands are not built overnight. Instead of lamenting the extra work they must do, Shifty Jelly should calculate the comparative advertising cost of the exposure that Amazon gave them and count themselves as big winners. I guarantee you there are countless developers who can only dream of being chosen for this opportunity and would see the real value instead of whining about an immediate payoff.

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  10. Sadly, I have to say that the problem with the ShiftyJelly (or whatever they call themselves) app is not that it was free for a day, but that it didn’t do anything that free apps could do. I actually downloaded it when it was free. I tried it out. I went back to the Google Listen app from Google Labs because it worked better for me.

    They can complain all they want that Amazon didn’t help them, but in reality they didn’t help themselves by not having a unique, r even slightly special, app.

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