Voice-First Apps Monetization: Let's Break The Ice!

Background

During the last few months, we have read and heard a lot about the need and possible ways that some sort of monetization could and should be allowed to entice and reward the Voice-First app developers. This is indeed a totally legit demand and should receive an adequate answer. Yet, as an emerging, though rapidly expanding technology field and market segment, the revenue stream generation might face a number of complexities that require survey-based fact gathering, careful analysis and an open debate among all the interested parties. 

Monetization could take place in a number of ways by following available paradigms.

At first glance, a hypothetical monetization could take place in a number of ways by following available paradigms. Here is a quick but not necessarily comprehensive list:

1. Revenue generated through direct voice-app sales and marketing based essentially on the developer's shoulders with or without the Voice-First platform provider's direct support.
2. Revenue generated indirectly through a larger premium service that offers one or more voice-apps as parallel and complimentary access channels. 
3. Revenue produced through the classic downstream advertising sponsorship and sales.
4. Revenue received directly from the Voice-First platform vendor based on an upstream subscription model.
5. Revenue created through some sort of viable combination of the previous 4 methods.

Nothing Is really as it seems: I called an angel, devil had my phone tapped

Let's run a quick review and see the potential pros and cons of each approach. 

Number 1 is the classic and well consolidated mobile app store-based monetization paradigm. It appears being a viable solution and offers a known and functional revenue sharing model to the benefits of both developers and the platform vendor. Amazon has already put in place the necessary specific infrastructure. The same could be easily implemented by Google, Microsoft, Samsung, etc. Most probably the vendors currently focused on the enterprise environment, such as Artificial Solutions, would follow alternative perspectives best aligned with corporate-wide deployments. The latter might mimic a model based on a mix and match of traditional licensing and the more recent cloud-based subscription formats.

Amazon has already put in place the necessary specific infrastructure for a store-based monetization solution.

At number 2, we have a situation a lot easier to manage since the direct voice-app revenue is not at all an issue for developers no matter working in-house or as external service providers. In this model, the developer revenue is defined as operating cost and taken care of right off the bat with an upstream solution.

Number 3 offers a more complicated context. On initial consideration, almost everybody gets the impression of a no-brainer: Voice and hence Voice-First platform are among the best-ever vehicle for commercials. Such apparent self-evident truth is simply based on our decades-old collective experience of the radio broadcast.

Our tolerance toward interstitial advertising (on both Radio and TV as well as the social media) has significantly decreased during the last couple of decades.

Although our tolerance toward interstitial advertising (on both radio and tv as well the social media) has significantly decreased during the last couple of decades, we still live with a rooted habit of hearing sudden quick ads in the middle of a normal program audio stream without being surprised. Here is the question: Is that enough to make us believe that Voice-First is just the radio broadcast redux and therefore ads could get unleashed bar none? I argue that it is not at all or, at least, not always the case. 

In one of my previous articles, I tentatively classified the current voice-apps production in 3 big categories. Among these categories, Interactive Radio or Flash Briefing type of skills/actions (hitherto more than 90% of the voice-apps) can conceivably have a better tolerability score (in the ears of the beholder) for embedding ads because the former are ultimately nothing more than interactive radiocasts. However, as we move forward, the Flash Briefing type will be inevitably and increasingly pushed to the margins to leave, in facts, the centerpiece to more genuine forms of actual conversational user experience where interjecting ads without breaking the natural dialog-flow will become a lot more complicated.

It's reasonable to conceive that advertisement interjected in a naturally flowing human-machine conversational dialog could trigger rejections on the user's end and could produce counterproductive side effects.

It's awkward when we imagine, for instance, even a simple conversation about the local traffic disrupted here and there by brief commercial announcements. While awaiting the results of more accurate users surveys, it's reasonable to believe that advertisement in a naturally flowing human-machine conversational dialog could trigger rejections on the user's end and could produce counterproductive side effects. Here is a quick imaginary but realistic taste of the awkwardness:

• User: Alexa, how is the traffic?
• Alexa: The Home Depot close to you has a special sales tax-free day. Are you....
• User: Alexa, what the hell are you talking about?
• Alexa: With the current traffic you can arrive at your destination in approximately 52 minutes. Please don't forget about today's sales tax-free special at Home Depot...
• User: Alexa, have you lost your mind?
• Alexa: Sorry, I don't understand your question.
• User: Alexa, just leave me alone!
• Alexa: Ok, but please do not forget about the Home Depot specials. By the way, do you want to learn more about the upcoming ...
• User: Alexa, shut up, please!
• Alexa: Sorry, I don't understand your question.
• User: Alexa, god....

At number 4, we find a clean upstream resolution. Here developers publish their voice apps and contractually participate in a pre-established usage-based revenue sharing logic that is carried on directly and fully managed by the Voice-First platform vendor based on end-users service subscription. Both Amazon and Google have already such infrastructure in place and could fully open it up to skill/action developers engagement. Such model could be followed suit by other players including Microsoft, Apple, Samsung, Baidu, etc. Enterprise Voice-First vendors such as Artificial Solutions could use adapted forms of such revenue sharing system in a number of standard productivity contexts.

A mixed regime offers arguably a picture rather close to what we should realistically expect to happen in the very near future.

A mixed regime, as mentioned at number 5, offers arguably a picture rather close to what we should realistically expect to see as the Voice-First goes mainstream while both the technology and the related market segment grow.

In parallel, we should also expect to observe forms of incremental monetization that will allow Voice-First platform providers to significantly increase their own revenue stream through a number of techniques such as voice-app Search Placement and Premium Content revenue sharing all the way to allowing direct Voice-First platform licensed access by third-party products and services (Smartphones, Home devices, Cars, wearables, etc.).

There is no free beer, food is expensive and wine is served only at the finish line.

If we want to believe in the utterly optimistic Voice-First specific projections for the next 3 to 5 years then we should brace ourselves for a dazzling future where the human and the machine intelligence will strengthen each other to literally re-invent the ways people will make a living. Companies such as Amazon, Google, Apple, Samsung, Baidu, and Microsoft are leading these tectonic movements yet we should always keep an eye on Shadow Flowers and continue to believe in the existence of icebergs in the open ocean.