Brief:

• Amazon expanded a program to pay developers for their Alexa skills — the voice-enabled apps that run on the company’s Echo line of smart speakers, according to a blog post. Instead of paying only game developers, the e-commerce giant will provide rewards for top-performing and “engaging” voice apps in these categories: education and reference, food and drink, health and fitness, music and audio, lifestyle and productivity.

• Payment is based on the skill’s customer engagement, which Amazon evaluates on a monthly basis. Amazon will pay developers that qualify for the program at the end of every month. The company will also pay for Alexa skills that are used in different countries, such as the U.S., U.K. and Germany.

• Amazon lists five qualities that make a skill engaging, including voice-first design, uniqueness, game play, freshness and the ability to “make customers’ lives easier.” It cites as an example a 7-Minute Workout skill that guides a user through a brief set of exercises and keeps track of the user’s workouts. 

Insight:

Amazon needed to create some kind of incentive to get third-party developers to create Alexa skills, which are free to users of its Echo devices. Unlike Apple’s App Store or Google Play, the Alexa App Store currently doesn’t allow developers to charge users for paid voice apps, nor does it allow in-app purchases, TechCrunch reported.

Amazon recognizes that Alexa becomes more valuable with every new skill that’s developed for the platform, especially as the market for smart speakers grows more crowded. Amazon is estimated to have about 71% of the smart speaker market, followed by Google Home with 24%. Apple will introduce a Siri-powered device called the HomePod near the end of the year, while Alibaba, Lenovo, Onkyo, Harman Kardon, HP, Tencent, Samsung and Facebook have products in the pipeline.

Even without the compensation program, the Alexa platform has managed to draw software developers. Alexa is estimated to have more than 15,000 skills, compared with 378 for Google Assistant Voice Apps, according to data from Voicebot. But as the smart speaker space gets more crowded, Amazon will have to create incentives for developers to stick with its Alexa platform. Paying them for creating engaging skills is a good first step.