Why Publishing an eBook can be more Lucrative than a mobile application

Posted on September 24, 2012

It’s not secret in the industry anymore, it is incredibly hard to become rich through the creation of mobile applications. With average pricing around to $1.67 for paid apps, and many more becoming free, the volume of downloads that you need to make a decent profit is immense.

However, there is one section of electronic, tablet focused content, where prices seem to be rising, and that is the arena of e-books. When Amazon made e-books compelling, most e-books were priced around the $10 mark, which is already substantially higher than the average selling price of an application. Since that time, and with the help of Apple, the selling price of e-books has continued to increase.

To see the difference in pricing for the same content, take Mark Bittman’s How to Cook Everything Vegetarian as an example:

Arguably, the version that has the most utility is the application version. It includes a powerful search that lets you find and discover recipes much faster than any other version.

The printed version may be agreeable to look through, to browse through for entertainment. Yet, the Kindle version has a much less powerful search than the application and is much less pretty than the printed version. It’s also the version with the highest margin! I also expect it was the version that was the cheapest to produce.

So if you have developed content, and it could be in the form of videos, simple interactive elements, music or text, are you better-off arranging that into an application or putting into an e-book?

With Apple’s iBooks Author tool, it’s rather straightforward to put the content together and make a compelling e-book that can be sold for in excess of $10, and that would be a price customers can expect to pay.

On the other hand, creating an application could run into several tens of thousands of dollars, and the average selling price would be much closer to $1. The margin would be much less.

Some back of a napkin calculations gives a rough mean average number of downloads per application as 92000. This is probably way too high as a small number of applications will get an enormous amount of downloads, such as angry birds, Facebook, Instagram etc. So, let’s imagine that the average application receives about 50,000 downloads. That’s roughly $35,000 after Apple’s retail margin is removed, probably barely enough to pay back the development costs.

For an iBook, you would need only 5,000 downloads to make the same revenue.

Worth thinking about.