[rkalla]

<edited to remove the unintended snarky tone and clean up some points>

What I got from this blog post is that they made an uninformed decision, and ended up with an unexpected result that pissed them off from the perspective of "lost sales".

The email from Amazon clarified there were no money to made and sure enough, no money was made.

The added costs of the server is unfortunate and justifiably something to be upset about (especially if you weren't accounting for it), but I have to point out that the sales before the free-app-of-the-day listing[1] were slow: 2, 4, 14, 20 sales... then 101k copies given away in one day.

For an app selling 10-20 copies a day, how much would it have cost that company, paying a PR firm, to get it infront of 101k new users (forget about payment)... how many tweets would you have to get out or blog posts written to make 101k people aware of your app?

Amazon gave that company an incredibly aggressive marketing campaign for 1 day and from where I'm standing, gave that company an enormous opportunity to be successful with a future app or future subscription services for their existing app.

I think things like what Amazon are doing certainly don't fit in the old model of software sales and if you are betting the company on that model, it is going to be a painful trip for you.

Something to consider is that if this app offered a subscription-based premium mode or some in-app micro transactions and just 5% of people that downloaded the app engaged in that, I think the tone of this entire blog post would have been completely flipped about how awesome the Amazon model is. Even if that app could simply be used to announce the release of a new app in the app store from the same company when the time comes that would be a huge amount of people seeing that announcement that would not have otherwise seen it (not the full 100k, but whoever is still using the app).

Given that, I would assert that the Amazon App Store model isn't broken, it is just different and requires some planning to take advantage of.

If you have a flexible business model and can roll with the punches and take advantage of opportunities like these and see them coming you stand to benefit quite a bit from Amazon's free app of the day.

Let's say everything I've typed up until now is garbage and you waved it all away, another reason this was a good thing for the company: reviews.

Out of 101k people that now have this app, how many are going to eventually leave reviews? 20? 30?

How many reviews may be a half to a full star higher because the app was free and there isn't that feeling of being owed value by the reviewer because they got your app for free.

So now let's say in a few weeks (or at some point in the future) this company now has 15, 20 or 30 reviews on this app, all fairly good (4 and above).

Now that the app is no longer free, how much higher in the search results is this app going to show up for people when they are searching for apps like this? How much more likely are people browsing the Amazon App Store to buy this app because it has such good reviews?

I would argue had this guy listened to his co-founder and not flown off the handle, and left his app in the app store, and built off of this success he would have seen sales gradually increase over time, similar to how it was trending before they had the one day give away. All those sales before the give away were people finding the app because (I assume) they wanted an app like that.

The one day give away was likely a bunch of people that just grab every free app they see each day.

Either way, it sounds like he took the gift horse he was given by Amazon, punched it in the horse-face and then let it run off a cliff because it wasn't the exact horse they were expecting.

</end-backseat-internet-business-driving>

[1] http://shiftyjelly.files.wordpress.com/2011/08/results2.png?...

[campnic]

Your entire response is conjecture.

He readily admits he bought into the 20%, got and clarified the 0% offer, debated and went for it. He shows the 54k number as a way of reinforcing the bait-and-switch they are using to lure people into the market, not as a way to say 'i should have been paid $x'.

You say 'Amazon gave that company an incredibly aggressive marketing campaign for 1 day' but let me tell you what i see. 'Amazon is building their market on the backs of apps by giving them away for free.' I write Android apps for a living and I appreciated the cautionary tale. The rest of the comment you left is basically unsupportable. We have no data to say what % of people that get the app for free leave a review (and, consequently, whether or not that review is good or bad). I'm guessing we also have very little insight into how the numbers of installs affect the search rankings.

You are (probably) right, there are a bunch of people that grab just the free apps, but I don't see that as a good thing and I'm not sure how it plays into your argument. Its also not clear that the 'freemium' option was offered to the developer as an alternative of putting up their full app up for free. If it was, I would have expected PopCap to do so with Plants v. Zombies.

Its also unnecessarily diminutive to say '... I have to point out that the sales BEFORE the free-app-of-the-day listing[1] were not impressive...". The fact of the matter is they made infinitely more money before the deal of the day then we can say they did AS A DIRECT RESULT of the deal of the day listing.

[tybris]

> 'Amazon is building their market on the backs of apps by giving them away for free.

I don't get that. It's just a deal. They could have said no. The rules of the game are clear. Amazon can make your app free unilaterally, but you'll still get 20%. Or, you go into any arbitrary mutual business agreement with them to guarantee that your app gets promoted, at the cost of lower/no revenue. I found the fact that the latter exists informative, but in no way threatening.

My take from this whole thing is that in the technology industry, people are not used to making business deals and get scared when they do.

[irons]

I found the fact that the latter exists informative, but in no way threatening.

Why does it have to be "threatening" to be newsworthy?

[neuroelectronic]

I don't know, but hear it is.

[campnic]

I don't wish to be mistaken, my shot was more about making the logical opposite argument then making a solid description of what Amazon has done. I did read the article as critical of Amazon but I agree that the author didn't get more or less then he explicitly agreed to and that Amazon does offer something in return.

[rkalla]

campnic,

I appreciate the response. I'll try and address each thing you mentioned.

--------------------

but let me tell you what i see. 'Amazon is building their market on the backs of apps by giving them away for free.'

--------------------

This company's app uses a simple software model. You pay $1.99 and you get their app. Your comment decries the entire Amazon model as benefiting them and not the developer.

I don't agree with this and here is why... let's say this company had a subscription-based app or some in-app-payment-enabled app. Suddenly it is on 101k new devices and let's say that 5k of them (5%) buy some simple subscription or even less, some 1-time-in-app-micro-resource inside the app for $.99.

Now suddenly this blog post has a very positive tone to it and the developers are praising Amazon for such a progressive app sales model and we are all here nodding our heads about how awesome it is and you and I are high-fiving each other over Skype Video because we are so excited.

The Amazon model isn't broken and it's not building a market on the backs of its developers. It can be an aggressive, mutually-beneficial relationship if both parties are prepared to take advantage of what Amazon has to offer. These guys weren't ready for that yet, but I am willing to bet dollars to donuts that come this time next year they will have a new app back in Amazon App Store, ready to do the 1-day-free-giveaway AGAIN, but this time they are going to be prepared to take advantage of all the traffic.

----------------------

Its also unnecessarily diminutive to say '... I have to point out that the sales BEFORE the free-app-of-the-day listing[1] were not impressive...". The fact of the matter is they made infinitely more money before the deal of the day then we can say they did AS A DIRECT RESULT of the deal of the day listing.

---------------------

I agree that my comment came off way too demeaning and I didn't mean it that way. I was getting carried away with making my point that from a sheer-number-of-device-installation perspective, they went from a trickle of water to a firehose in one day and that isn't a bad thing.

[campnic]

Very rational. I agree that the Amazon model is not broken, its just different (I did not mean to suggest it was broken, though I can see that being implied from my statements). I also agree that it is OK for the developer to publicize (critically) that there was an alternative/non-public agreement to become the app of the day which varies from the publicized terms. At the end of the day, you are both "right". There are types of apps that this can work well for (which I think you do a good job arguing for) and there are pitfalls to the system which Amazon tries to not make public (which I'm thankful to the author for having written about).

[kevinpet]

If they had a subscription-based business model, they likely wouldn't have been charging for the app to be begin with. Amazon pitched it to them, and pitched it to others, as benefiting sales. Their claim needs to be evaluated on that basis, otherwise, you're just moving the goal posts.

[shiftyjelly]

Can I just reply here? Here goes. I think you missed the entire point of the article. We agreed to be featured, we stand by that decision. What we take issue with is the public perception that Amazon pays their (publicly stated) 20% of the asking price for developers to be featured. They don't. Simple as that. Everything else is a beef, yes, but not our primary beef. Also we left it a month, we got featured June 27th, it's now August. Virtually no change in sales on Amazon.

[rkalla]

shifty,

Admittedly, my response was focused more on the other beef than that single point. Given how much other information was in the post, I didn't think the 20% == 0% was the central argument; my apologies for missing that.

My core belief that in the long(er) term that the give away likely would have helped the movement and sales of your app still stands though. I think you leaving it in the store for an extra month is valuable data point, but not quite enough for me to categorically agree with "Yep, totally experiment failure, f Amazon!"

Did any reviews come in from any of those massive downloads? How were the reviews? What was the average score?

I would give up the argument completely at 6 months after a few more update releases if there were 0 reviews and 0 sales, otherwise I stand by my original statement that this was a GOOD thing for you and your company.

It is my feeling that you are focusing too much on this bait and switch. Fine, it happened... but you also have your app on 101k more devices than you did the month before so do something with that, flip your perspective a bit and take advantage of it.

You cannot convince me that having your app on 101k more devices in 1 day is a bad thing (except maybe the server costs). It may be scary/odd/unexpected, but you guys are smart, you will figure out some good way to grow from this.

[kelnos]

Fine, it happened... but you also have your app on 101k more devices than you did the month before so do something with that, flip your perspective a bit and take advantage of it.

Hell, before pulling out of the Amazon app store, release a new ad-supported version, and wait until a decent number of people have upgraded. Then pull out of Amazon's store. That should help defray the costs of the new hardware. Users can still do as the author suggested: re-buy on Android Market, and for users who had already paid for the app (not on free-app day), ask for a refund. Any serious user of the app will want to switch over to the Android Market anyway, so they can get later updates.

That feels slightly underhanded, but... eh. Server costs are real.

[neuroelectronic]

Nobody would buy an app from a developer who did this.

[kelnos]

Yeah, in hindsight I realize that from the user's perspective, this really sucks. As a user who knows and understands the developer's perspective and how Amazon (intentionally or otherwise) screwed him over, I'd be sympathetic, but the vast majority of purchasers would not know any of that background information.

[rkalla]

Would appreciate clarification on the downvotes guys. If I'm missing something let me know.

[mbateman]

Generally it seems like you're expecting the OP to take on your perspective without really taking his perspective seriously. Just saying you have a "core belief" that waiting longer would help doesn't really seem like a fair point.

Why don't server/support costs matter? Why does it have to be that it's more beneficial for these guys to have their software on 100k more devices than not? Why should all business models have to work that way? And why should someone who has a business model expecting to profit from Amazon's advertised 20% be willing to accept waiving that?

OP seems to have a valid complaint against Amazon and a worthwhile warning to others in similar situations, and you're just telling him to suck it up figure out some way around it. Okay, I get what you're saying, but withdrawing from what is by all evidence an unprofitable app market driven partially by a bait-and-switch still seems perfectly reasonable.

[rkalla]

That is a fair point, I don't think the OP's complaint about the 20-to-0 switch was invalid, but I do skip past it to try and look at what kind of benefit can be squeezed from their current predicament instead of scorching the earth and walking away.

Thank you for the feedback.

[irons]

The OP clearly decided that not doing business with Amazon was the right choice for their business, and Amazon richly deserves the scorching.

Amazon looked like it was setting up an app store where Android developers had a hope of getting paid, but so far, they've created a space where the control-freakism runs deeper than under Apple (e.g., the lack of control over basics like device filtering and removing apps from sale), and the return on investment is worse than under Google.

[JeffffreyF]

Oh, hell no. Scorching Amazon for scorching the earth is exactly what is needed. You cannot comprehend the reality of a common good.

[res0nat0r]

Wait, you expected to receive 20% of your pre free giveaway price during the free app of the day promotion and Amazon just gives you money, seriously? Where exactly does it say that you get paid during a free giveaway promo?

From the FAQ:

What is the payment structure between Amazon and me? Amazon pays developers 70% of the sale price of the app or 20% of the list price, whichever is greater.

[kevinpet]

From the FAQ: Amazon pays developers 70% of the sale price of the app or 20% of the list price, whichever is greater.

I would interpret the sale price of the app to be zero, so they get 20% of list.

[res0nat0r]

I'm not sure how one concludes that getting $50k of free money is even a smart assumption to make. So they give away X amount of money per day to app developers because they are being nice?

[kevinpet]

When the FAQ appears to address something (selling at less than list price) and doesn't call out an exception for free, it's not an assumption. Companies do all sorts of things. I don't understand all the economics of amazon's business model, but I can read.

[dpcan]

You are being sarcastic, right?

[neuroelectronic]

He definitely is. The developers definitely should get paid 20% of their asking price for free downloads because some people think that's what happens. Amazon should definitely be responsible of their perception in the eyes of a few niave developers.

[cyberguppy]

I do not understand the point of this long rant when you have zero understanding of the mobile marketplace. I'm going to go ahead and take your advice and "say everything [you've] typed up until now is garbage" and "[wave] it all away" and respond to the reviews point.

When users grab an App for free, they leave worse reviews in aggregate, nearly every time. In the mobile marketplace, people who have to spend money to buy Apps normally have money, and often have jobs, which sometimes means they're adults, which occasionally means they act like adults when they decide to review an app they decide to spend money on. People who download apps for free often decide to act like privileged little brats and berate an app for any feature they perceive that it should have but which they fail to find (regardless of whether said feature exists in the app). They leave poor reviews and don't factor "value" into the equation because all they ever download are free Apps and they expect nothing less than Angry Birds every single time.

[Pieces]

The other problem I've read (from another article about Amazon's Appstore, which I haven't been able to find) is that it does not support the compatibility portion of the manifest (i.e. incompatible devices are allowed to download apps). There is also no way to respond to negative reviews. The result is a lot of negative reviews by people who cannot run the app, and cannot be responded to.

[dlikhten]

Lets say you are right, the dev is saying "omg look at teh numberz i lost 100 thousandz salez"

Note: Sales did not pick up after the free app sale. Therefore that free app sale was actually a waste of time. Furthermore their app requires a server to run, since its not a subscription-based app the server is 100% on their backs. They now support 100,000 unpaid customers with a server, and ALL those customers are going to cost them in the long run.

Amazon further moved by reducing the price of the app for 3 days without consent and modified description of the app.

TL;DR = sales on amazon are for profits of amazon only, get their numbers up but provide no real value for clients. They developer makes more money selling 10 apps a week than having the promotion which permanently harmed their revenue.

[natrius]

> Amazon further moved by reducing the price of the app for 3 days without consent and modified description of the app.

Both of those actions were consented to in the agreement the company entered into with Amazon.

[dlikhten]

I don't think they were aware of this. Not from the post. But in the end YES that is the agreement, hence why rotten to the core.

Amazon always reserves the right to do whatever they want period. Its not your product, you are now an amazon employee with the right to quit.

[dibarnu]

Luckily they got mostly positive reviews, however most apps have their reviews and comments trashed. I've seen great, 5-star apps go down to 2-stars because of people who downloaded it because it was free, didn't know what it did, then didn't like it and give it a 1-star. Others give 1-star because amazon screwed up and charged them, others give 1-star because it doesn't work on their device (even the description will say it isn't going to work). These things wouldn't happen with when people find the app and choose to purchase it.

The complaint seems to be that Amazon is talking out of both sides of their mouth. Telling the public that developers are getting 20% (thus making people feel good about installing the free app) then asking developers to agree to a rule change and accept nothing instead.

[stumm]

What normal person downloads the app thinking that the developer is going to get 20%. I'd wager most people are completely ignorant of this.

[dlikhten]

"For an app selling 10-20 copies a day, how much would it have cost that company, paying a PR firm, to get it infront of 101k new users (forget about payment)... how many tweets would you have to get out or blog posts written to make 101k people aware of your app? Amazon gave that company an incredibly aggressive marketing campaign for 1 day and from where I'm standing, gave that company an enormous opportunity to be successful with a future app or future subscription services for their existing app."

There is a big difference between paying for 100k of paid users marketing campaign and getting 100k free users. When you pay for a campaign you know the amount you target and are willing to spend. From that you know what the expenses will be.

The free campaign meant 100k users unexpectadly got the app, then normal everything continued. Point being that 100k people like a free app. Angry birds was already popular prior to Amazon Store.

So the question is that did the free day give ANYTHING to any developer, lets assume zero server costs. Did the app give anything? The app benefits amazon because people use amazon store vs google store, the 100k users = user outreach, server infrastructure, damage control, reaching out to users to rate, etc. And for the day you devalue your app making paid customers feel stupid for not waiting.

[dhimes]

For me the most important part of the story is this:

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.

[kosei]

Agreed. That surprised me initially, but then I thought about it a little more. I think the issue is that with a "Free App" promotion, you get great exposure, but only to people who are going to buy your app for free.

- People who do see your free app buy it (if interested) and net you $0. They won't wait to buy tomorrow because why not buy it for free?

- People who don't see your free app won't buy later because they weren't exposed to you. Very few people will have "heard" of your app without having had the chance to buy it.

[hn_decay]

For me the most important part of the story is this

How so? Why would there be any expectation that sales would spike in the proximity of the app being a featured freebie? Does the grocery store sell more chocolate milk before or after a sale?

I would imagine quite the opposite really.

However I would revisit the situation in a few months. The app world, especially on Android, is very much one where word of mouth rules. "What app do you guys like for managing/listening to podcasts?" Having a lot of people who now have a vested interest in this app (because they think that they got a deal on it, and that it has monetary worth that wouldn't be there if it was just a normal trial or long-term freebie) yields a lot of people who may very well promote this app.

We'll see.

This whole entry sounds a little bizarre, however. The author got exactly what they should have expected. Where is the rot? There is a unexplained spitefulness that I'm just not understanding.

[dhimes]

Why would there be any expectation that sales would spike in the proximity of the app being a featured freebie?

Not necessarily. But then again maybe. This information is useful to me because it changes the expectation value of the outcome of that marketing strategy. Without it I'm just guessing, and laying the odds at 50-50.

[colbygk]

I totally disagree with the point about the nature of a free app getting a lift in reviews.

"How many reviews may be a half to a full star higher because the app was free and there isn't that feeling of being owed value by the reviewer because they got your app for free."

Breaking a rule, I cannot currently post direct references, I hope someone either corrects or bolsters this:

I have read at least one peer-reviewed study showing that people generally see a free service/item as having less value than one that costs some X $ amount. Perhaps that doesn't translate to how they feel about the quality of that service/item, but I think your assumption about the reviews being susceptible to an extra half point is not well founded.

[rkalla]

That is a good point to bring up.

I don't think that study and those results apply here verbatim because this is more the Groupon model than the "cheap service" model.

I am, for a VERY limited time, getting a product for free. The perception of value is much higher (because of the time limit) than if I were downloading an always-free product or a really cheap product.

I think the success of Groupon, effectively using the same pattern of attraction, would indicate that people DO perceive a huge value from an extreme sale/giveaway like this for such a short period of time.

I'd also argue that the sheer volume of downloads (100k vs 20 the day before) would also support that claim.

Neither point perfectly scientific and conclusive, but I felt collectively the supported my position.

[dibarnu]

Except that reality doesn't bear out your position. So far, I haven't seen you give any evidence, other than your feelings or what you think, that things are the way you say they are.

I have visited the FAD page right around midnight pacific (when the free app is revealed) every day since it was first introduced in March. A few apps start with no rating, but most have 4- to 5-stars. By the end of the FAD promotion (the free-day,) I've observed at least half of them go below 3-stars. The only ones that have gone up are the ones that had no rating to begin with. Many, but not most, do recover some of their rating. I've yet to see an app (that I recall) which regained its previous high.

My understanding, and I don't have any link to really support this, is that Groupon customers are some of the most demanding, selfish and entitled gits out there. If Groupon is so great and customers are so thrilled at getting a premium thing cheap, why do more than half of merchants say they wouldn't do the promotion again?

http://www.businessinsider.com/groupon-survey-results-2011-7

You say Groupon is successful? You're right, but pretty much only for the customers [ab]using it. Groupon loses money at an alarming rate...

http://www.minyanville.com/businessmarkets/articles/groupon-...

Your logic is really flawed when you say "I'd also argue that the sheer volume of downloads (100k vs 20 the day before) would also support that claim."

It supports the claim that people like free stuff. Once a year IHOP does a free pancake deal for charity. On those days they see roughly 50 times more customers than on a typical day. By your logic, people perceive pancakes as a huge value.

[rkalla]

dibarnu,

I will concede that point as everything you pointed out are solid arguments against it and well reasoned.

Thank you for the detailed reply.

[recoiledsnake]

>For an app selling 10-20 copies a day, how much would it have cost that company, paying a PR firm, to get it infront of 101k new users (forget about payment)... how many tweets would you have to get out or blog posts written to make 101k people aware of your app?

It's not just that, the app would've got in front of much more than 101K people for that many to download. Maybe a couple of million?

Looks like this strategy is:

1. Good for apps with ads or in-app purchaes. 2. Bad for apps that need server infrastructure on the backend.

Not all apps are like that. Since the app failed both the above categories, they shouldn't have agreed to the terms.

Other apps might be enjoying the attention happily and making money, I don't see anything 'rotten' about that.