A Bit Conflicted

A few months ago, Amazon launched their own Appstore for Android phones, however it took me until a few weeks ago to actually get it.  Long story short, Android users have the Android Market pre-installed that allows them to download free and paid apps to their phones, and the Amazon Appstore is a separate entity that does the same thing: just through Amazon.  AT&T, in their infinite wisdom, denied users the ability to install apps that weren’t from the Android Market (including the Amazon Appstore), but they finally reversed course at the end of May and decided to start allowing such things.  However, it took over two months for the update to finally make through AT&T’s network to my phone that would allow the change.  I was in constant contact with AT&T and my phone’s manufacturer, HTC, trying to get this stupid update.  They even sent me a replacement phone, but no dice.

Finally, one day I checked, and I had the ability to install the Amazon Appstore.  All of the sudden.  Lovely.

Since that time, I have grabbed a few apps and checked out some others.  There are some apps that are exclusive to Amazon’s store, and others that are only available through Android Market.  The killer feature of the Amazon Appstore, however, is their “Free App of the Day,” where Amazon allows you to download one free (normally paid) app during that 24 hour period.  Sometimes it’s a productivity app (like, today, it’s “iCooking Barbeque,” which gives you recipes.  Normally, it’s $0.99).  This past Monday, however, the free app was a game called Guitar Hero 5, which normally sells for $8.

You can hopefully see why I was anxious to get this appstore.  Sure, there are frequently things I don’t want, but sometimes, something comes along that’s normally $8 that you can get for free.  You don’t even have to install it: you just have to “buy” it and Amazon will remember that you own it.  If anything, you can just get everything and never use any of it, and not even take up the virtual space on your phone.

I am, however, at odds with what Amazon is doing with their appstore.  Sure, as the consumer, I like free stuff.  It gets me to use their service and I end up purchasing more through them than I would otherwise.  This is Amazon’s strategy in doing this in the first place (and they are paving the way to release their own tablet at the end of this year, with full integration of their own appstore, effectively bypassing Google).

But what happens to the developers of these apps?  You know, the folks that actually made the app that Amazon is giving away for free for that day?

There are more than a few horror stories out there on the internet.  One company put their app up on the store and would get a few hits a day.  Amazon offered to host their app as a free app for the day, and they decided to go ahead and do it (so, yes, it’s voluntary).  Amazon tells the developer that “We have seen tremendous results from this promotion spot and believe it will bring you a great deal of positive reviews and traffic. It is an opportunity to build your brand especially in association with a brand like Amazon’s. The current price of this placement is at 0% rev share for that one day you are placed.” So, basically, Amazon gives the app away, and neither Amazon nor the developer makes anything for it on that day.  And this is what happens:

This particular developer was making some money from a few sales a day, and then effectively gave away 100,000+ copies of their app.  Almost $55,000 of product, given away.  After that sales spike, the developer says the sales returned to the original levels.

And this developer is not alone, In another case, the developer ended up giving away 180,000 copies of their app, but they ran into a separate problem from the first example.  The Amazon Appstore apparently doesn’t discriminate between Android phones, so in some cases, a given application won’t be fully compatible with your phone…and Amazon may not tell you this.  If you download the app and it doesn’t work, you tend to review the application unfavorably.  This particular app didn’t work on a certain set of Motorola phones, which meant that anyone that downloaded it gave it a bad review.  All the sudden, these guys ended up with thousands of bad reviews for their application, on a product that shouldn’t have been on some phones in the first place.

So, am I happy I have the Amazon Appstore?  Absolutely.  However, I’m also conflicted about it.  I have heard folks on podcasts that watch the store for updates in order to hear about new products, and if a particular app comes up that they want, they wait until the next day and go ahead and purchase it in order to make sure some revenue makes it to the developer.  Amazon also offers a nifty “Test Drive” feature for many of the apps they host that allows you to actually try the app out for 30 min on your Windows PC before buying it.  Thus, you can try it out on the free day, and if you like it, choose to wait to buy it the next day.  Others will get the free app, and then if the developer makes another application, they will be sure to buy that one also (which is kinda the whole purpose of this model…you get a free app, decide you like it, and then go to the developer’s page and buy more apps from them.  Doesn’t always work, obviously…).

Just something important to keep in mind.  What’s free to us, as Consumers, isn’t free to the people that made it.  Someone is losing money when we are given things for free.