Budgets and Pricing of Book Apps

The economic realities of making and selling tablet book apps are currently as vague as Hell. In the absence of any hard figures, though, we have anecdotes, and they tend to be pretty grim.

Ustwo have rather wonderfully been very upfront about their experience with their Nursery Rhymes With Storytime app. It cost £60,000 to develop, they say, sold over 37,000 copies and rose to be the top grossing app in the App Store’s books category. All very impressive, but unfortunately it returned only £24,048 in revenue.

(Of course, as anyone familiar with the UK Children’s market will tell you, Nursery Rhymes don’t work overseas. Sure, there is some overlap with American ‘Mother Goose’ tales and a few of the rhymes are known in a few Commonwealth countries, but they are essentially British, an unusual Victorian invention that romanticises the pre-Victorian era. This is the reason why nobody makes, say, a Humpty Dumpty cartoon series these days. With this in mind, gaining the top spot in the Book App charts is pretty impressive, although of course they may have been referring to a UK-only chart)

But anyway – such anecdotes are backed up by the gist of the talk at MIPJuniour in Cannes last week, where there was much scepticism from publishers about Apps.  Egmont’s Emma Cairns-Smith sums it all up neatly:

With an e-book you can sell it at pretty much the same price as the book, but as soon as you put that on an app you have to sell it at 99p. There are real commercial issues around it. It is far more expensive for us to make an app than an e-book, and yet we can charge far less for it. That’s the conundrum.

What should we make of all this?  It’s true that the user base for tablets is still young and that another good Christmas, plus the arrival of the Kindle Fire, should see a much larger market to sell to.  Of course, as we noted when we discussed the low barriers to entry in this market, that will be matched with far greater competition.

Then there’s the cost of producing these things. They should get cheaper, as off-the-shelf development software arrives.  And yet, and yet… there is a natural tendency to budget-bloat in the creative industries. People resist lower budget productions, as if they believe it negates the value of their work. They are professionals, and big budgets are a sign of status. It’s almost as if creative people judge their own sense of self-worth by the size of the budgets they work with.

I’ve been around a while now, and I’ve seen how this all plays out. In the independent TV boom of the early 90s, the rule was that any company that made one programme but still hired a receptionist would not last the year. Whereas in the first dot com boom of the late 90s, the rule was that any company that had receptionists with Apple Macs would be gone in six months. With all that in mind, take a look at Moonbot Studios, who did the Morris Lessmore app we looked at a while back:

MOONBOT studios Office Tour from Moonbot Studios on Vimeo.

Damn, there’s a nice place to work, don’t you think? And I’m sure they’ll do brilliant things and have patient backers with very deep pockets. But while it doesn’t bode well for a company to have both a vague business model and a GIANT LAMPSHADE!!!, there doesn’t seem to be a rush to very low budgets happening, especially when you have to compete with such high-profile money-burners as this. Cheap and small, in a global marketplace, will equal invisible. At least, that’s the current thinking.

So what does that leave us with? Well there is the quasi-blasphemous idea of trying to sell apps for a lot more money. Evidence for this comes from Faber’s Waste Land App, which sells for £9.99 and reportedly made its development costs back in six weeks. We should be slightly cautious here; much of the video content for this app came from an old BBC documentary and, given the links between Faber and the Elliot estate, you have to question how much of its research and development costs were hidden.  But even so, it’s still an impressive achievement and supports Faber & Faber’s argument that good stuff is worth the money.

Of course, in this era of 99p ebooks, there’s a lot of disagreement about pricing digital content and the Waste Land example does go against the prevailing tide. To give my own example, I wrote a book called I Have America Surrounded: The Life of Timothy Leary five years ago, and while it does not sell a massive amount, it sells enough to remain in print – a sturdy ol’ backlist title. The ebook was initially priced at £2.99, where it steadily sold a few copies.  Occasionally, however, it goes down to 99p, and the sales figures shoot up like crazy.  Then it goes back to £2.99 and remains steady and unspectacular again. For that reason, it’s just gone back down to 99p.

I’ve tried to work out why this is. As far as I can see, it’s a good book and a total bargain at £2.99.  How can price be that sensitive?  My best guess is this: It’s not how good the book is, it’s how much the book is needed. People do enjoy reading about the life of Timothy Leary, it’s quite a yarn, but they don’t really need to do so. They don’t think that it’s going to affect their Twenty First Century lives a huge amount.

But when a book offers something that people feel they need, then the price point stops being so important. Then they are prepared to pay a tenner for it. The Waste Land app, I would suggest, sells to academics and poetry lovers who feel that they need to understand the poem better, and that if it costs a tenner to do so then so be it.

So for those developing apps, the question isn’t “How can I make this cheaply enough to get my money back?” Instead, the key question should become, “What would make this app sell at a Waste Land price point?” Because all the signs are that the book apps that sell are going to have large budgets, and they will need to be recouped.

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One comment on “Budgets and Pricing of Book Apps

  1. Pingback: 10 Things We’ve Learnt About Book Apps in 2011 | John Higgs

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