
IGDA about the Amazon Android Appstore: just say no. - swombat
http://pastebin.com/cH7PZENi
======
jcl
I'm surprised the IGDA didn't also call out Amazon's apparent requirement that
a developer must allow Amazon to distribute all the software the developer is
distributing through other channels. In other words, there's no way to try out
Amazon's service with just one title -- it's all or nothing.

~~~
dpcan
I was surprised they didn't mention this as well.

Plus, the Timing of Deliveries section.

------
msy
Say hello to the new boss, same as the old boss.

Amazon, Apple et al are becoming new middle men of the digital marketplace.
Want to sell content online? If you want mass market exposure we'll have
30-70% of the revenue from the sweat of your brow and you better thank us for
the privilege.

I wonder how long until they band together and form a lobby group called the
Digital Content Providers Association of America.

~~~
swombat
And, like all middlemen, they very much deserve their cut.

What are you going to do with that pile of books in your cellar if there's no
bookshop to sell them for you? Open your own single-book store?

If you build a store, you should certainly get a healthy cut of what you sell
through your store.

~~~
Maascamp
I certainly wouldn't generalize that to _ALL_ middle men. Have you heard about
sub prime mortgages..?

~~~
swombat
Ok, probably not all. Let's say "many".

------
_delirium
Sounds like Amazon is trying to extend to apps the weird pricing racket that's
standard in the bookselling industry. A lot of books are cheaper via Amazon
than via the publisher's or author's own site precisely because of these kinds
of terms, which require you to sell to the bookseller at a steep discount over
list price, _and_ simultaneously prohibit you from selling below "list price"
yourself, outside the bookseller channels.

~~~
jrockway
I don't think an agreement with Amazon is what prevents the publisher from
selling at list price. It's the fact that Amazon (and every other bookseller)
would simply refuse to buy the books from the publisher if they were being
undercut.

~~~
jonknee
With billions of dollars on the line, I'd be shocked if it's not in writing.

------
aristidb
Amazon does however have an incentive to maximize revenue and there is a lower
bound to what a developer gets (a percentage of the list price), even if
Amazon promotes it for free, so Amazon loses money on that.

I think Amazon is better at optimizing pricing than most game developers are,
so I expect this to improve revenue for both Amazon and the game developers.
But only time will tell for sure. Panicking is not the right response.

~~~
_delirium
I can believe that if Amazon were sticking to terms for its own market, but
Amazon is attempting to prohibit anyone who sells through its market from
simultaneously trying other pricing strategies in other channels. That seems
more like a classic attempt at using market power in one channel to coerce
behavior in other channels, rather than competing on the product's actual
strength (unlike Google or even Apple).

~~~
jonknee
You can try other pricing strategies, it's just that you need to give Amazon
the lowest list price. No different than Apple really, requiring your in-app
content to match the lowest pricing available.

Amazon and [to a much greater extent] Wal-Mart play these games with physical
goods too. It's just you never get to read the terms and big distributors
don't complain publicly.

~~~
irons
_No different than Apple really, requiring your in-app content to match the
lowest pricing available._

IGDA says the Amazon terms limit you to the lowest price "available or
previously available on any Similar Service" — it's the "previously available"
that's the sticking point.

Tweetbot is having a $2.00 introductory sale on the iOS App Store, where the
price will eventually go up. If Tapbots were foolish enough to do an Amazon
version, they'd be constrained to offer that price forever. Absurd.

~~~
jonknee
I don't think Tweetbot would have any trouble launching at whatever list price
they wanted on Amazon. Amazon isn't selling iOS apps so the Apple App Store
isn't a similar service. Google's Android Market would be though.

~~~
irons
Your optimism would be touching, if it wasn't coming in the defense of such
flagrantly hostile behavior.

Even if this clause did apply only to Android recompilations and not to ports,
I trust you'll concede it is not status quo ante with Apple's already-
appalling pricing terms.

~~~
jonknee
Apple has a monopoly in the iOS app distribution game, so their pricing terms
are appalling for a different set of reasons (regardless of what they are you
must agree if you want to ship the app). While I think Amazon is playing
hardball, they in no way are the only way to sell Android applications. If the
terms aren't agreeable, just don't use their store.

------
allwein
I'd need to read the Amazon agreement much more closely, but what's to stop
developers from gaming this by taking all their apps released on Amazon's app
store and making them special "Amazon Editions"?

Then the argument is there that the minimum list price on Google's store
doesn't apply, because the Google Edition and the Amazon Edition are two
different apps.

~~~
MatthewPhillips
You can't loophole your way out of a merchant/producer relationship. They
decide what qualifies; they'll slap down your loophole and kick you out.

------
alvarosm
The post in the IGDA blog:
[http://igdaboard.wordpress.com/2011/04/14/important-
advisory...](http://igdaboard.wordpress.com/2011/04/14/important-advisory-
about-amazon%E2%80%99s-appstore-distribution-terms-2/)

------
yawn
It is curious that there haven't been any prominent developer blog posts about
how well an app has done on Amazon's store. Where are the developer comments?

------
doron
I understand the ire, but still... IGDA can pool resources, and are in perfect
position to start their very own branded Android store where they can set the
rules as they see fit.

No reason why a game specific store shouldn't exist. If the user goes the
distance to install the Amazon store, chances are they will install another.

~~~
TillE
It's not a bad idea. Google's choice of game categories in the Market is
bizarre, to say the least. There are a few highly specific categories which
don't particularly represent popular genres on any platform, and everything
else gets dumped in "Arcade & Action".

It's a total misunderstanding of the market, and it does quite a poor job of
selling games (at least from a customer's perspective), which is the thing you
really want in an app store.

------
gacba
Three words people: In App Purchases! If you have a free app, and then use In
App Purchasing for your real revenue stream, you won't be affected by these
Orwellian terms and Amazon's whims.

It's relatively new on Android, but a number of iOS apps are raking it in this
way and giving away the app for free...

<http://mashable.com/2011/03/29/android-in-app-live/>

~~~
JoachimSchipper
Apple has already closed this loophole, and if this becomes widespread others
will too.

~~~
beeeph
How did they close it? This is how all my iOS apps generate revenue. They're
all free with In-App Purchases. It works great.

Also, why would anyone consider this a "loophole"?

~~~
JoachimSchipper
Apple are taking their 30% cut, right? I'm not sure how Amazon's terms
interact with in-app purchases, but presumably they've thought of this.

If the NYT sells an app with bundled one-year subscription, Apple gets 30%; if
the NYT sells (well, sold) an app and a separate one-year subscription, Apple
gets nothing. If the original app is sufficiently useless, this "in-app
purchase" is clearly just a way of not paying Apple.

(Apple is not free of blame in that particular fiasco, and they take quite a
large cut. But taking an equal cut in either case is not necessarily
unreasonable.)

~~~
beeeph
Either you misunderstood IDGA's letter or you misunderstood gacba's comment,
or both. None of this has anything to do with the 30% cut they take, so I'm
not sure why you're mentioning that.

The complaint is in regards to Amazon controlling the cost of the app rather
than the developer controlling the cost of the app. That's all. Gacba was
simply saying that if you don't want Amazon controlling the cost of your app,
then make it free and sell in-app purchases. Since Amazon doesn't control how
much you sell your in-app purchases for, they lose total control over the cost
of your app and the developer gains the control back.

------
dazzla
From my limited experience (a friend's and my own app in the Amazon store from
the first week) the exposure is pretty negligible anyway. I imagine the
requirement to enable side loading (not possible with AT&T), downloading
another store app, enabling 1 click, etc is really hindering adoption. So I
don't think developers need to loose any sleep over this right now.

------
fomojola
Until Amazon fixes that, there is quite frankly no incentive to use their
store for anything that isn't free. I had thought that cross-promotion for
software that works with hardware Amazon sells would be win, but until Amazon
fixes their pricing policies I've no interest at all in their store. 30% off
the top is bad enough but at least you got to determine the price. 20% of list
price on a 99-cent app? Really?

FAIL. Call me back when you get your mind right.

------
joelackner
does anyone know how the free app-a-day promotion is being handled? does
amazon pay the developer 20% of the price for each free download?

~~~
cubicle67
point 9:

"Furthermore, Amazon dictates that developers cannot set their list price
above the lowest list price "available or previously available on any Similar
Service." In other words, if you want to sell your content anywhere else, you
cannot prevent Amazon from slashing the price of your game by setting a high
list price. _And if you ever conduct even a temporary price promotion in
another market, you must permanently lower your list price in Amazon's
market._ "

This seems to imply that if you offer your app in a free-app-a-day promotion,
you're required to offer it for free permanently to Amazon, although there's
no way that can be correct

[Edit: it seems I misunderstood the parent comment. I'm referring here to
free-app-a-day promotions like this <http://www.freeappaday.com/>. I wan't
aware Amazon offered something similar

I was saying it looked like if a developer promoted their app on a site like
this, point 9 make it look like they'd be forced to offer it for free,
forever, on the Amazon store]

~~~
mattmcknight
"And if you ever conduct even a temporary price promotion in another market,
you must permanently lower your list price in Amazon's market." seems to not
be entirely accurate with regards to the prior statement "cannot set their
list price above the lowest list price available or previously available on
any Similar Service".

If the _list_ price on the similar service doesn't change, but there is a
temporary promotion on the similar service, this condition would seem to _not_
apply.

------
kodisha
All i see is that most of the top selling apps are already on Amazon Store :/

------
foob
_Amazon steeply discounts a large chunk of its Appstore catalog (imagine: "our
top 100-rated games are all 75% off!"). Some developers will probably win in
this scenario, but some developers -- most likely, those near the bottom of
the list -- will lose, not gaining enough sales to offset the loss in revenue
per sale. Amazon benefits the most, because it captures all the customer
goodwill generated by such a promotion._

There might be some chance of Amazon doing something like this, but it is
important to point out that even in this case the developers of those 100 apps
will on average be making more money. Amazon is trying to optimize prices to
maximize their own profit and in doing so they also increase it for the
developer. Lets look at an example...

Say that Amazon sells n copies of a game per day at the list price of $1. Then
they make .3n dollars per day and the writer of the app makes .7n dollars. Now
if they lower the price by 75% like the author suggests and sell m copies per
day then the app writer makes .2m dollars and Amazon makes .05m dollars.
Moneywise, this obviously only makes sense for Amazon to do if m > n6 because
they would be losing money otherwise. If this condition is met then the app
writer will make at least .2n6=1.2n that day and their profit increased by at
least 71% if Amazon was smart about their decision.

As long as Amazon changes a price such that it increases their own gain then
it also increases the gain of the developer. In the price range from
.2/.7=.286 to 1.0 of the list price this is trivially true because your
profits are directly proportional to theirs in that range. In that case you
have a minimum increase in profit of 0% but will likely see something higher.
In the range from 0.0 to 0.2 of the list price Amazon is losing money to pay
you so I'm assuming that this isn't going to happen. In the range of .2
through .286 things get a little more complicated. Look at this plot
([http://www.wolframalpha.com/input/?i=Plot%5B100*%28%28.3%2F%...](http://www.wolframalpha.com/input/?i=Plot%5B100*%28%28.3%2F%28x-.2%29%29*.2-.7%29%2F.7%2C+{x%2C.20%2C.2%2F.7}%5D))
which shows the absolute minimum percent increase in profit that the developer
sees compared to list price given that Amazon isn't losing money on the
decision. If Amazon thinks that it's a good idea to sell your app for 78% off
then you're probably about to start making a lot more money than you would
otherwise.

I understand that at first glance .2 of list price sounds scary, but as I've
shown above the developer also makes an increased profit whenever Amazon does.
This doesn't totally negate the proposition that Amazon might take a loss on
your app to help sales elsewhere but they could just as easily take a loss
elsewhere to help sales of your app. On average you'll still be making more
money. I've assumed throughout this that Amazon knows how to adjust prices to
maximize their own profits but I have a feeling that they're pretty good at
this. They have a treasure trove of data on people's shopping habits that I
can't even begin to comprehend and they're just trying to apply what they've
learned to an app store.

tl;dr: The pricing policy actually increases your profits compared to a .7/.3
split at list price as long as Amazon is acting in a way that increases their
own profits. It sounds scary at first but it's actually pretty cool that you
can have a company as experienced at this stuff as Amazon optimize the price
of your app so that you make as much profit as possible.

~~~
foob
There is one serious problem with this reasoning though. A realistic scenario
might be that somebody decides that they want to buy your app and then
compares the price at a couple of different app stores and decides to buy it
at Amazon because there's a 10% discount but would have otherwise bought it
elsewhere. In this case Amazon would have gained profit from the discount
while you would have lost it.

How this ultimately plays out for the developer is hard to predict because it
depends on how the market develops. If the Amazon store becomes very
successful and their audience shops there regardless of whether or not there
is a discount then this effect will be small. The terms guarantee that users
will only find discounts at Amazon and this will make them less likely to
check other stores when they find an app at Amazon even if it's full price. If
that's how customers behave then the optimization will stay more favorable for
the developer.

------
shareme
Just wait folks..remember most device users have do one extra step to get
these apps..if we pressure Amazon enough these terms will change..

In my own case I am going with:

1\. Android Market 2\. SlideMe 3 GetJar

..when Amazon changes the terms as it should be pricing only at their market
pricing at other markets should not bear on pricing at theirs..its a anti-
trust potential violation via the collusion implications of anti-trust law..

~~~
epoxyhockey
Users having to go through all of the extra steps just to install and enable
the Amazon app is enough reason for not publishing via Amazon's app store.

Also, users have to enable Amazon's 1-click mobile purchasing. A 2nd huge
hurdle.

~~~
jcl
That probably won't be true long-term. Amazon is perfectly capable of cutting
deals with manufacturers/carriers to get their apps pre-installed; their MP3
app comes with many Android phones.

------
tybris
or... be an entrepreneur and take a chance...

------
Shorel
Any Indie developer with experience on Steam sales to light up this issue?

Seems to me that the arguments of IGDA sound very close to the arguments of
the RIAA and real numbers will show a very different outcome, specially for
the smaller devs.

~~~
jim-greer
I don't see how the numbers could show that this scenario is fair.

\- Developer sets a minimum list price of $0.99 (fair)

\- Amazon has an 80% off sale (fair)

\- Developer later has an 80% sale on Android Market (fair)

\- Amazon can now sell the app for 96% off, because the sale on Android Market
resets the minimum list price (unfair)

The developer is punished for having a sale on a competing market by now
allowing Amazon to sell the app for $0.04, forever.

------
neutronicus
Kind of paints the Apple / Amazon spat in a new light.

~~~
cooldeal
What spat?

