Amazon is following the footsteps of tech giants Google and Apple to attract more developers to its Android and Fire OS app store. For this, it has introduced Amazon Appstore Small Business Accelerator Program. Under this new program, it will charge less money from app developers that are new or whose net income is less than USD 1 million from apps on the Amazon Appstore. So the app that will qualify for the smaller businesses will have to pay 20 percent of total revenue in a calendar year. Earlier, Amazon used to charge 30 percent of the total revenue from these apps, including that from in-app purchases. Developers who are earning more than USD 1 million will continue to pay at the original rate. The new program launched by Amazon will additionally offer AWS credits. While it is a good deal for some developers, for others it is not better than what being offered by Google and Apple. Apple had announced App Store Small Business Program last year. Under the program, the tech giant announced that it has reduced its cut to 15 percent for all the developers who are earning less than USD 1 million in a given year. For those earning more than this threshold, the cut will be at a standard rate 30 percent.
Google too reduced the rate recently but in a slightly different way. The search engine giant said that it has lowered the commission to 15 percent from 30 per cent on the first USD 1 million revenue made by developers through the Play billing system each year. When compared to other platforms, Amazon is taking a larger cut at 20 percent. But the e-commerce giant is providing developers on its platforms Amazon Web Services credits in form of perks. The company said that all the developers that are making less than USD 1 million from Amazon Appstore will get promotional credit from AWS services. The credit will be 10 percent of the revenue in a calendar year. The credit will include infrastructure and technology support like artificial intelligence and others. Amazon said that the total combined benefits of the program will be equivalent to 90 percent of revenue. In case the revenue of the developer crosses the threshold of USD 1 million during the current year, the benefits provided under the AWS credits will cease with immediate effect for the rest of the year. The charges for such apps will revert to the standard royalty rate.
If the revenue of developers drops below USD 1 million in the future, they will by default become eligible for the Small Business Accelerator Program in the next calendar year. Amazon Appstore Director Palanidaran Chidambaram said that the company is making it easier for new and small businesses to grow through AWS credits. “Amazon is helping small businesses to build and grow their app. We are giving them access to a broad range of AWS technologies that can help them innovate and develop an app like they imagined,” Palanidaran noted in an announcement. Amazon said that the program will be launched in Q4. It said that more details about the program and how to get benefitted from it will be provided at that time. The changes in the commission have been announced at a time when tech giants are being accused of an anti-competitive approach. These companies are also increasingly under pressure from regulatory authorities. Recently, Epic Games sued Apple over its app store fees.
