The new voice app economy: Can you earn money by creating Alexa skills?

We can now use voice commands to control our devices. Telephones, cars and smart speakers have virtual assistants ready to help users with anything they need. However, the success of assistants like Amazon’s Alexa, Apple’s Siri or Google Assistant greatly depends on the utility and quality of their apps. The company, founded by Jeff Bezos, which is the leader in the smart speaker sector, has sold 100 million units of the Amazon Echo in the United States since its launch, and its voice app market now provides 80,000 skills (what its apps are called). However, this unstoppable growth of the skills market could work against it. The professors at the UOC's Faculty of Computer Science, Multimedia and Telecommunications Robert Clarisó and César Córcoles gave their views on this development.

“The skills market has enormous potential with the ability to be used for both smart speakers and mobile phones, but it also poses major challenges,” notes Córcoles, also a researcher in the UOC's TEKING group. Getting the virtual assistant to recognize a voice and its meaning is more complicated, in general, than in other systems. “Today it’s a tool that allows users to do two things at once when their hands are tied or if they have vision problems, but sometimes it can be quite a feat to find the ‘magic’ word to get to what you’re after.”

For the success of smart speakers to be sustainable over time it is essential for voice apps to give value to the user, while also being backed up by quality development. “When a new app platform is launched, such as the skills market, the first apps developed are the most simple (calculators, weather forecast apps, apps for ordering a pizza, etc). Programmers estimate the effort needed – and, therefore, the cost – and the return they can yield. But there comes a point when developing a new app is sometimes not profitable,” Clarisó points out, who is also a researcher in the IN3 SOM Research Lab group at the UOC.

Amazon knows this. It is aware that if it does not upgrade the appearance of some of its major apps for users, there is a long-term risk of decline in the use of smart speakers or other voice-activated devices. The number of skills for Alexa in the United States rose from 25,784 in 2018 to 56,750 in early 2019, according to a Voicebot report. This period represents a growth of 120% in the number of apps; however, there was a much bigger increase between 2017 and 2018, at 266%.

Is developing skills a good business?

International experts have noted that the skills market, since the launch of Amazon Echo in 2015, has not had a voice app as successful as other smartphone app when they first appeared. Moreover, on the App Store or Play Store platforms there are millions of reviews and ratings by users whereas, in contrast, there are very few on this voice app platform, where the most popular apps have only accumulated a few hundred ratings. And perhaps this is why, since 2017, the company has sought to strengthen this ecosystem by starting a rewards programme for skills developers outside of the company.

A rewards programme that, after first being offered in the United States and then in the United Kingdom, Germany, Japan and India, has just reached Spain, France and Italy in order to widen the skills market and also make them available in other languages. The company increasingly rewards developers who achieve more consumer interactions in its key categories: teaching and reference, food and drink, games and curiosities, childhood, health and well-being, lifestyle, music and audio, and productivity.

Amazon says it has paid millions of dollars to independent skills creators in over 20 countries since launching this programme, however the exact figure is unknown. And it’s an amount that has been split between many programmers all over the world. Some cases have been documented in which developers have received a cheque for 1,500 dollars, 2,000 dollars or more in the first month. What the company wants, according to Rob Pulciani, the general manager of Amazon Alexa, is for every skill created to make this virtual assistant smarter or more useful. On CNET, Pulciani explains that they cannot do this themselves, so what they want is to enable external developers to innovate and expand Alexa’s abilities rapidly. “If the developer community is successful, we will be too.”

The new Alexa economy is starting to take shape, according to programmers, marketing executives and industry analysts. For around a year, developers have also been able to include payments in the app. At first, Alexa wanted all the apps to be free for users, but this demanded a major effort for developers to create a skill and a financial return that did not compensate the work they had done. Now, with payments within the app, there is another incentive to create new innovative and creative skills.

However, Clarisó recalls that sometimes it is risky for people not linked to the company to develop apps for platforms controlled by third parties, such as Alexa. “The platform’s conditions of use can change and mean that the app they have created is no longer allowed. Or, if it is very successful it may end up being copied or incorporated by the platform as a basic service, endangering the survival of the developer’s business,” he warns. This is what has happened recently to developers for mobile devices and was reported by The New York Times in April. Apple’s iOS system introduced functions to help users limit the time they or their children spend connected to devices, such as the iPhone and iPad. Since these functions appeared, all the apps that provided the same service have been restricted or eliminated.