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Amazon Alexa Skill Growth Has Slowed. Is That a Good Thing?

  • Alyx 

Amazon’s Alexa voice platform is used for more than interacting with Amazon itself to purchase items – much of the value it provides to consumers is from a wide ecosystem of “skills”, apps published by third party developers.

When Amazon’s Alexa platform was first introduced, the number of skills available grew at a rapid pace. In addition to developer rewards for high utilization, this was nurtured by their developer advocates, as well as a wide variety of skill templates they made available. These templates made it easy to publish simple skills like trivia and facts of the day. They’re the kind of skills that are fun to use once or twice, but unlikely to retain users for daily engagement. Over time, the appeal of building skills went more mainstream, and the ecosystem came to include hobbyists and major companies that wanted to add voice functionality for their customers. These efforts to grow the skill ecosystem worked – Amazon has said that there are over 100,000 Alexa skills globally.

Now, it seems that growth in the ecosystem of skills is slowing:

[W]hen you evaluated new Alexa skills introduced per day in the U.S. in the first half of 2019, the rate was 58% lower than the 2018 rate. In all of 2018, new third-party skills grew at the rate of 85.0 per day in the U.S. The figure fell to 38.2 new skills per day in 2019, an annualized decline of 55%. The growth rate tells the story.

Is this a good thing, or a bad thing? All new ecosystems want to see their content grow at first – drawing in new users, as well as new developers whose content contributions could become more robust over time. However, over time, the ecosystem of Amazon Echo skills was likely to hit some constraints. There are only so many different ways to build a very common app like one for weather, horoscopes or alarms (and many of these are already offered as a first-party app by Amazon, undercutting any third-party skills that would have to be installed). And the templated skills that were so popular initially were bound to run into redundancy issues. But you don’t want to see an ecosystem stall. From here, there are two major directions Amazon could go:

  • Further incentivize developers. With more ways to monetize skills and reward utilization, small developers will continue to innovate.
  • Offer more support for major applications. Customers are very familiar with interacting via a voice channel, and post-COVID, hands-free interaction has even more appeal. Right now, most people – even those of us who develop skills! – would be hard-pressed to name a sophisticated skill we use every day on our Echo devices.

Overall, a decline in skill growth may not be a bad thing, if it results in higher quality skills despite an overall lower quantity being generated. We look forward to seeing what continues to be developed on this platform in the future.