Amazon’s Appstore Cuts Reduction in Developer Revenue for Small Businesses, Adds AWS Credits – TechCrunch
Amazon is following in the footsteps of app store giants Apple and Google with the introduction this week of its Amazon Appstore small business acceleration program. The new program will reduce the commissions Amazon takes on app developer income for qualifying small businesses. Previously, Amazon’s Appstore reduced its revenue by 30%, including that from in-app purchases. Now it will only take 20% for developers who made up to $ 1 million in the previous calendar year. The program will additionally offer AWS credits.
The structure of this program is similar to that of Apple’s Small Business App Store program, announced in late 2020, which reduced Apple’s discount to 15% for developers earning up to $ 1 million, after which they moved to the higher standard rate of 30%. This rate continues as they move into the following year. Google, more recently, has taken a slightly different route, lowering commissions to 15% on the first million dollars in developer revenue earned each year through the Play billing system.
Amazon’s discount is still larger, at 20%, but that’s because it gives developers another kind of perk: AWS Credits.
The company claims that developers with less than $ 1 million in Appstore revenue in a calendar year will receive 10% of their revenue as promotional credit for AWS services. This includes infrastructure technologies such as compute, storage, and databases – to emerging technologies, such as machine learning and artificial intelligence, data lakes and analytics, and the Internet of Things. objects, Amazon notes. This brings the total benefits of the program up to the equivalent of 90% of revenue, according to Amazon.
If the developer’s revenue exceeds $ 1 million in the current year, they will revert to the standard royalty rate and no longer receive AWS credits for the remainder of the year.
And if the developer’s earnings in any subsequent year fall below $ 1 million, they will become eligible for the Small Business program again in the following calendar year.
“By helping small businesses get started with AWS through credit, we make it easier for them to build and grow their app businesses,” said Palanidaran Chidambaram, director of Amazon Appstore, in a comment. ad. “AWS gives developers easy access to a wide range of technologies so they can innovate faster and create almost anything they can imagine,” he added.
The changes to app store commission structures come at a time when tech giants are under increasing regulatory pressure on the nature of their business, which the largest app publishers including Basecamp, Spotify, Epic Games and others have argued as being anti-competitive. Epic is also suing Apple for the costs of its app store, in a case that could set a precedent. In response, Apple and Google cut fees for small businesses as a sign of goodwill – and that wouldn’t have a significant impact on their own app store platform’s revenue.
Amazon says the new program will launch in Q4 2021, and more details on how to participate will be provided at that time.