Amazon joins Apple, Google by reducing its app store cut


The Amazon Fire HD 8 tablet, which runs Amazon's Fire OS.
Enlarge / The Amazon Fire HD 8 tablet, which runs Amazon’s Fire OS.

Apparently following the lead of Apple and Google, Amazon has announced that it will take a smaller revenue cut from apps developed by teams earning less than $1 million annually from their apps on the Amazon Appstore. The same applies to developers who are brand-new to the marketplace.

The new program from Amazon, called the Amazon Appstore Small Business Accelerator Program, launches in Q4 of this year, and it will reduce the cut Amazon takes from app revenue, which was previously 30 percent. (Developers making over $1 million annually will continue to pay the original rate.) For some, it’s a slightly worse deal than Apple’s or Google’s, and for others, it’s better.

Amazon’s new indie-friendly rate is 20 percent, in contrast to Apple’s and Google’s 15 percent. Amazon seeks to offset this difference by granting developers 10 percent of their Appstore revenue in the form of a credit for AWS. For certain developers who use AWS, it could mean that Amazon’s effective cut is actually 10 percent, not 15 or 20 percent.

But for some, it amounts to something more like giving the developer a coupon on a purchase of services from Amazon than actually putting more cash in their pockets. It leaves small developers who aren’t spending a bunch of money on Amazon’s services with a worse deal than they’d get on Apple’s or Google’s marketplaces.

As with Apple’s program—but not Google’s—the lower rate applies to developers only if they made $1 million or less in total (in this case, the numbers assessed are those from the previous year). Crossing that threshold will lead developers to pay the older, higher rate on all of their earnings. In contrast, Google always takes a smaller cut of the first million in a given year and then applies the bigger cut to revenues after $1 million without changing the amount it took from the first million.

The Amazon Appstore primarily exists as the app store for Amazon’s Android-based Fire OS software that runs on tablets. It’s also offered as an alternative App Store for users of other Android-based operating systems.

All three companies are facing various forms of regulatory scrutiny, and that scrutiny was likely a factor in Apple’s decision to cut the fees it applies to apps released by small developers on the Apple App Store. Google followed shortly afterward for its Google Play marketplace.



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