Amazon’s New Alexa Monetization Options


Back in November, Amazon announced plans to allow audio app developers to add monetization options to their skills. Its main competitor, Google Assistant, has had such tools in place for almost a year now – to little effect – which limits the case for Amazon playing catch-up. Amazon’s monetization has just gone into open release.

You can see the feature at work in TsaTsaTzu’s Six Swords game. (TsaTsaTzu joined the Amazon beta for the monetization program.) Here are our notes from the development experience:

1. Amazon’s API is a lot more svelte than Google’s is.

You as the developer have a clear path on how to implement the Amazon payment system. Your only option is to use the Amazon’s own in-house payment service, and on the business side, you are locked into their royalty rate.  (They keep 30%.) Google offers more comprehensive implementation tools, including your choice of payment provider. But with flexibility comes complexity. The Google payment options are more challenging to implement.

2. Implementation costs affect the rate of adoption of monetization tools

We as developers have to think about what you need to earn from your work in order to breakeven on your time. If you have a higher cost of implementation, you will need higher revenues (and likely longer timeframes) to break even. Since Google’s monetization set up requires more set up and maintenance, you know from the outset that you need a good business plan with multiple fall-backs. You have to be confident in your revenue streams. But since there’s no real consensus on how to make money with audio apps, there’s a lot of uncertainty around those assumptions.

Take homes:

Amazon has made monetization easier to implement than Google has. As a result, Alexa developers are more likely to invest the time and resources needed to implement monetization tools. At the same time, we aren’t seeing a lot of adoption on either platform. Would better marketing support help? Will either Amazon or Google step in to offer more options to find and cultivate new users (or keep existing ones)? Stay tuned.

Posted in Alexa, Echo, Google Assistant, Google Home, Management Consulting