Wednesday, August 1, 2012

Amazon's Video App for iPad Features Amazon Purchase Flow

Today's release of Amazon Instant Video for iPad contains an important variation on most media sales made to iOS devices:  it circumvents the iTunes Store infrastructure.

Much has been made of Apple's 30% "tax" on all items sold through their various iTunes-enabled e-commerce services, including the App Store, iBookstore and iTunes Music Store.  Developers or publishers have had to work with Apple to enable "in app" purchases or otherwise make their media available from Apple.  The "native app" approach was at first assumed to compliment the "native web" approach to buying things on iOS, but the pendulum has recently swung strongly in favor of the app approach.

Now, Amazon is providing a "native web" purchase path that presents a compelling alternative.  As reported by AppleInsider, "To circumvent Apple's requirements for in-app purchases, new content must be bought from Amazon via the iPad's Safari Web browser. Purchases made on through the browser will appear in the Your Video Library section of the iPad application."

While Apple boasts a system with over 400 million active credit cards on file, Amazon has nearly 200 million.  Given there are only 170 million US credit cardholders, both of these services have pretty much covered that part of the market.

So, Amazon has creating a shopping experience that starts and ends on the web, and never touches the Apple Stores.  Users download a free app from the Apple App Store, but their purchases are handled via Amazon's Web Services.  Interestingly, they have worked for years with developers like Bitmenu to refine this technique.

We expect more Sellers to choose to market their media on their own terms.