Amazon introduces paid subscriptions for Alexa skills, makes them free for Prime members

Sarah Perez

After grabbing 70 percent of the voice-controlled speaker market, Amazon says it's now opening up a way for third-party developers to make money from their voice apps, known as skills, on its Alexa platform. The company announced it has introduced the ability for customers to access premium subscription content within the Jeopardy! skill - the first skill maker to receive access to the new developer tools.

This is the first time third-party developers will be able to implement a direct means of monetizing their skills themselves, but it's not the first time developers have earned money from their skills.

Earlier this year, Amazon began rewarding top-performing Alexa skill developers with direct payments - starting with games, which has proven to be a popular skill category. That program was expanded in August, to dole out cash rewards to other categories, like education, lifestyle, food & drink, music & audio, health & fitness, and productivity.

But until now, developers have not had any tools they could take advantage of that put them more in control of their voice app's business model. In fact, Amazon shut down the first ad network for Alexa skills by changing its policies so it could no longer operate.

Above: Jeopardy! skill on the Echo Show (image credit: Voicebot)

Amazon tells TechCrunch the developer tools are currently in preview with the Jeopardy! skill developer, Sony Pictures Television.

This skill seems to be especially popular among Echo device owners, as it has 1,438 rating on the Alexa Skills Store. That's a lot, given that not all Echo owners even use skills, and many skills have never been installed beyond a handful of users. The skill also has a 4.2 out of 5 star rating, indicating it's fairly well-received, too.

What's interesting about the Alexa skills subscription model is that it's being used to push consumers to a Prime membership.

According to Amazon, Prime members who enjoy the current Jeopardy! skill will now receive six additional Double Jeopardy! clues every weekday at no charge, as a perk of their membership.

Non-Prime members instead have the option to buy a monthly subscription to Double Jeopardy! for $1.99 per month via the current Jeopardy! skill. They can choose to cancel this subscription at any time using the Alexa app.

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Above: more images from Jeopardy! skill (image credits: Voicebot)

However, the core app experience available today will not change. That is, the upgrade is not putting some of the formerly free content behind a paywall - it's offering additional content for a fee (or as a perk with Prime membership.) That means existing users will still be able to enjoy the six daily clues at no cost.

"Bringing a subscription model to skills for Alexa will bring customers the benefit of new, engaging, and high-quality experiences while providing developers an additional way to earn money from their skills," an Amazon spokesperson said.

While it's true that developers will be able to make money with their skills initially via the subscription model, making the subscription content free for Prime members is not the most developer-friendly choice. After all, many Echo owners are already Prime members, and those who aren't are pushed to upgrade through things like Alexa-only Prime Day deals, access to on-demand music through Amazon Music Unlimited, and more.

Of course, this doesn't mean that developers wouldn't get paid even if their user base was largely Prime members - Amazon still has its rewards program in place, and it could continue to pay developers based on usage, if it chose.

Amazon hasn't said what, if any, cut it's taking of Sony's subscription revenue. The standard split for app stores tends to be 70/30, with subscriptions in Apple's App Store dropping to an 85/15 split in year two, for comparison's sake.

Amazon may be considering what split it wants to take on these deals through experimentation.

"We’re working to find the best model for developers. At this time, we’re not sharing specific information about the revenue split," a spokesperson said.

Following the preview with Jeopardy!, Amazon says it will notify other skill developers when the tools become more broadly available.

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