All Alexa skills developers can now monetize their voice apps with in-skill purchases, Amazon announced last week.
The introduction of in-skill purchasing allows skills developers to sell premium digital content — such as subscription services or one-time purchases that augment a skill’s free offerings — within an Alexa skill.
Developers will receive 70% of the revenue from the list price of their in-skill products. In-skill purchases were previously available only for a select handful of Alexa skills.
This is a big step for the Alexa platform, which previously offered no clear path to direct monetization for skills developers. While the platform does offer a developer rewards program and the ability to sell physical goods and services through Alexa skills, neither of those tactics offer developers the ability to actually regularly monetize their voice apps.
The developer rewards program offers one-off monetary awards to developers whose skills proved popular on the platform, but on a case-by-case basis with no guarantee of revenue. The ability to sell goods and services through the voice assistant helped introduce Alexa to the expanding consumer sales funnel and increase brand exposure, but doesn’t do much to incentivize the creation of unique and engaging skills.
The rollout of monetization options, coupled with Amazon’s code-free skills developer platform, will help the company hold off competitors in the voice space. There are now 40,000 Alexa skills, up from just 25,000 in September 2017, putting Alexa ahead of competitors in terms of its voice apps library. But competitors, like Google, Apple, and Microsoft, that have lagged behind Amazon, remain a threat to Amazon’s early lead.
The addition of monetization tools for Alexa skills will help Amazon draw voice skills developers from competing platforms. And Amazon’s April 2018 launch of a code-free platform that enables almost anyone to build an Alexa skill will widen the potential pool of developers. In tandem, this could help Amazon continue to grow its skills library. While the voice app industry is still in early days, if Apple’s App Store is a historical signifier, Amazon’s ability to supercharge the growth of Alexa skills could lend itself to long-term success.
Advancements in a bevy of industries are helping intelligent digital voice assistants like Apple’s Siri and Amazon’s Alexa become more sophisticated and useful pieces of technology.
Advances in artificial intelligence (AI) are allowing them to accurately understand more information, while upgrades to mobile networks are facilitating quick transfers of data to robust clouds, enabling fast response times. In addition, the swell of internet connected devices like smart thermostats and speakers is giving voice assistants more utility in a connected consumer’s life.
However, there are still numerous barriers that need to be overcome before this product platform will see mass adoption, as both technological challenges and societal hurdles persist.
Jessica Smith, research analyst for Business Insider Intelligence, Business Insider’s premium research service, has compiled a detailed report on the voice assistant landscape that:
Identifies the major changes in technology and user behavior that have created the voice assistant market that exists today.
Presents the major players in today’s market and discusses their major weaknesses and strengths.
Explores the impact this nascent market poses to other key digital industries.
Identifies the major hurdles that need to be overcome before intelligent voice assistants will see mass adoption.
Via Business Insider