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Almost a year ago to the day, Amazon made generally available in-skill purchasing for Alexa, which allows voice app developers to levy a fee on in-app digital content. It has remained a U.S.-only affair since — Alexa developers abroad couldn’t build in-skill purchasing into their apps and users couldn’t complete purchases — but that’s poised to change this week.
Beginning today in preview, developers in the U.K., Germany, and Japan can add in-skill purchasing capabilities to their Alexa apps. (Interested parties can learn more by filling out this form.) That’s just the start — Amazon says in-skill purchasing will “soon” launch in other regions where Alexa-enabled devices are available, such as Canada, Mexico, Spain, India, Australia, and New Zealand.
“Soon, developers from around the world will be able to build premium skill experiences with localized content that is relevant for customers across different countries, languages, and currencies,” wrote Amazon in a blog post. “Additionally, developers who monetize their skills across numerous skill stores will be able to tap into a larger customer base, generating revenue to kick off their global voice business.”
In-skill purchasing encompasses three types of digital goods and services: one-time purchases or entitlements, subscriptions, and consumables (content that can be purchased, depleted, and purchased again). Items run the gamut from hints in a trivia app and expansion packs in an adventure game to a monthly subscription and premium features. Developers supply the list of offerings and prices and receive a 70% cut of the list price. On the customer side of the equation, voice commands trigger checkout using payment options linked to their Amazon accounts.
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Amazon notes that in-app skill purchasing has driven substantial revenue growth for folks like Gal Shenar, who’s seeing a 34% conversion rate in Escape the Airplane, and ambient sound app developer Nick Schwab, who reports that 90% of his skills’ users convert to paying subscribers after signing up for the free trial. Other apps successfully leveraging in-skill purchasing include Question of the Day, Would You Rather for Family, Escape the Room, Beat the Intro, Jeopardy!, Big Sky, and Yes Sire.
Earlier this year, Alexa rolled out new tools designed to make it easier for developers to insert in-skill purchases. The Alexa Developers Console — the dashboard from which Alexa skills can be created, modified, and deleted semi-autonomously — can now add in-skill purchases directly to apps, obviating the need to hand-code them via a command-line interface.
Beyond in-skill purchasing, Amazon offers another way for Alexa developers to monetize their apps: Amazon Pay for Alexa Skills. It’s strictly for real-world goods and services, such as food, clothing, and car pick up services.
The Alexa Skills Store — the officially sanctioned store for first- and third-party Alexa voice apps — had over 80,000 skills as of this month. But three years ago, the market for making Alexa skills was worth only about $500,000, according to CNET. That has changed drastically with the continued uptick in smart speaker ownership, with research firm RBC Capital Markets predicting that voice shopping on Alexa alone could generate more than $5 billion per year in revenue by 2020.
