A couple of days ago, Amazon made an announcement which took a few people by surprise. For what has seemed forever, Amazon has offered a free app of the day. In fact, this was one of the aspects which the Amazon Appstore had over the Play Store. Well, the announcement which came through two days ago, effectively shuttered the app of the day program. In replace, Amazon announced that they were essentially opening the floodgates on their Appstore and making all apps free. Well, to be clear, they were claiming they were making $10,000 worth of apps free. Although, in reality, this is presumably the extent to the developers who have signed up for the program. Following on from the original news, Amazon have now shared some more details about how the program in general will work.
As was already noted, Amazon have opened up roughly $10,000 worth of games and apps which are now free. To the user, these are completely free. There is no cost to download and there are no IAPs. You simply play and use for free. To compensate, the developers who have signed up for the program are paid a fee by Amazon for every minute that the user spends in the game or app. Amazon has now confirmed that rate developers will be paid is $0.002 per minute. That does not sound like much, but it does seem to be the going rate. In fact, when Apple launched their Apple Music, this was the exact rate Apple were paying artists during the trial period per stream. So in contrast, per minute is probably a lot better for App developers than per stream. Not to mention, if it is a high traffic game or app and one in which users spend considerable time, then this will probably accumulate quite fast. There is also the repeat aspect which needs to be taken into consideration. Developers will get this per minute rate for every minute and every time the user plays the game or uses the app. So per user, the amount a developer could make might actually be higher than the more direct-to-user methods of monetization.
Amazon also make the point that their model takes away the need for a developer to decide whether to go down the paid or freemium route. By using their model, there is no convincing the user to download the game/app or to buy an IAP. If they try your game, hate it, uninstall it, you still get paid for the time they were in it. Further still, Amazon also note that there is nothing stopping developers making additional revenues from in-app advertising...if you so wish.
So it does seem that this has the potential to be a winner for everyone. Users get to use and play for free, developers have the opportunity to make more money (per user) than they might through traditional routes and Amazon (if it all goes to plan) will generate what it has struggled to generate until now. A substantial chunk of the app store user market.