Amazon Defends Appstore Pricing

Amazon has defended the pricing system in its Appstore, saying that having full control over the price of apps in the store allows the company to market products effectively. The Amazon App Store was launched earlier this year, giving Android developers a new online shop to sell their games through. It was noted at the time that Amazon itself held the power to set the prices of apps in its store, not the developers. Shortly after launch, the International Game Developers Association board raised "significant concerns" over the distribution terms for the store, identifying potentially problematic scenarios that may arise. Even after Amazon attempted to clarify and alter the contents of the Android Appstore Developer Agreement, the IGDA group said that the changes did not fully allay its concerns. In an interview with VentureBeat, Aaron Rubenson, director for the Amazon Appstore, explained that the system is in place to provide developers with the best possible marketing. "When we looked at how we thought we could add value in this market segment, what we realized is that we are equal parts technology company and retailer," he said. "And the fact that we are a retailer at our core makes us a little bit different because we know about marketing and merchandising and proactive promotion activities. So when we launched the store we did it in a way that’s a bit different, where we are actually the seller of the apps." He continued, "As part of that, that means we are ultimately setting the sales price that the customers will pay for that app. And the reason we made that decision was that it gives us the broadest amount of flexibility in terms of marketing and merchandising and proactive promotional activities we were talking about, which we think is a real value for the customers." When questioned regarding whether developers should be given the right to choose the price of their own apps, he responded, "We certainly recognize that it’s a different model. But we decided that it was the one that made the most sense for us so that we could do the best job of marketing developers’ products effectively." "I think if you look at the site today, what you find is that the vast majority of the products are simply priced at list price. And then you’ll also find some really exciting promotional offers for our customers. And in most cases we’re working very carefully with the developers to have marketing going on both sides." "We market the apps and they do too, so that we can have as effective an awareness campaign as we can together," he concluded.