Amazon has announced the general availability of a way to make money from Alexa by expanding skills with premium features or content. Currently it is limited to the United States.

We reported on in-skill purchasing back in December 2017 when developers were invited to sign up for a invitation-only preview.

This is a monetization opportunity that extends an Alexa skill experience with premium digital content by way of new features or content. ISP supports both one-time purchases for entitlements that unlock access to features or content in your skill and subscriptions that offer access to premium features or content for a period of time. 

The latest roll-outs of ISPs demonstrate how premium content is expected to work: 

• SYFY WIRE by NBCUniversal
  Sci-fi, fantasy, and horror fans can subscribe and get three additional podcasts exclusive to Amazon Alexa: Geeksplain, Debate Club, and Untold Story. Each podcast offers a new episode every week.
  
  
• Yes Sire by Volley Inc.
  In this popular game, you play a medieval lord presented with an ever-expanding array of difficult choices, and must make good decisions to stay in power. Now you can buy the Wicked Witch Expansion pack, with new characters, new courtly drama, and new spooky scenarios. 

You define your premium offering and price, and Amazon handles the voice-first purchasing flow with customers using the payment options associated with their Amazon account. Amazon hands over 70 percent of list price, before any discount offered by Amazon, even though customers won't necessarily pay full price, or even anything at all.

Amazon's strategy, which is to encourage and retain membership of it Prime program is explained here: 

Amazon is ensuring that every in-skill purchase brings added value to Amazon Prime members, such as discounted price, exclusive content, or early access. 

While Amazon is currently dominating the Smart Speaker market, it had a 68% market share compared to Google's 20%, industry analysts from Loup Ventures, presented by voicebot.ai, see its lead reducing during 2018 and it being overtaken by Google Home in 2022:

These market share estimates reflect unit sales within the two years. Due to Amazon’s current lead in installed base, even if this forecast is true Echo devices may still be at parity with or slightly ahead of Google Home in terms of total users and devices in use.

Even though Alexa skills are available free of charge to users, Amazon appears to value them highly as part of its competitive edge and seems to be experiencing some success in getting owners of Echo devices to pay them attention. According to Amazon Alexa developer evangelist David Isbitski in a recent blog post: 

skill engagement grew nearly 75% in 2017 (up more than 50% YoY) and 4 out of 5 Alexa customers with an Echo device in the US have used a third-party skill. 

The prospect of making money through ISP should attract developers to creating skills that lead themselves to extension or elaboration.

Amazon is running a webinar Make Money with Alexa Skills: An Introduction on Thursday May 17, 2018 (09:00 - 10:00 PDT) for developers to learn about the different ways you can make money with Alexa skills and best practices for creating engaging, premium experiences. 

More Information 

Make Money with Your Alexa Skills through In-Skill Purchasing

8 Best Practices for Designing Premium Experiences for Alexa Skills

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