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Long Tail iTunes Book Apps Are More Expensive

In an earlier post, I examined the average price of the Top 100 PAID apps and noted that the relationship between price and popularity was somewhat dependent on the category. But in the Book category, I concluded that the Top 10 PAID apps were on average cheaper than those ranked 91-100. But what if we examine all Book apps, will the long tail apps be pricier?

The animated graphic below traces the evolution of prices in the iTunes Book category. In Q3-2009 the Book category exceeded 10,000 PAID apps, and since then long tail Book apps have (on average) tended to be much more expensive than their more popular counterparts.

Since there are far fewer FREE apps compared to other large categories, pricing is especially critical for Book apps. There are now over 28,000 Book apps, 92% of which are PAID apps††. Looking ahead, the iPad will be available in a few months and many publishers will need to learn how to price their apps for yet another device (see for example [1], [2]).

[For more on ebooks and electronic publishing, be sure to follow events at this week's TOC conference on twitter.]

(†) There is an upward trend in MEAN price from the more popular apps to the long tail, indicating that many more pricey book apps are in the long tail. The graphic also nicely shows the evolution of prices over time.

(††) The animated graph ends on 2/14/2010, at which point the chart represents the 26,000 PAID Book apps available in the U.S. iTunes App store during that week. In comparison, there were over 29,000 Game apps, 70% of which were PAID apps.

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  • Tim O'Reilly

    Ben -

    What ultimately matters to developers is total revenue – price x number of copies sold. Does your analysis give any insight into the sweet spot that generates maximum revenue?

    • http://radar.oreilly.com/ben/ Ben Lorica

      Tim,

      For now I have access only to the data Apple exposes in iTunes — the price and rank of an application within a category. The closest thing to revenue data is the list of TOP 100 GROSSING apps — but Apple only lists the Top 100 Grossing overall, and doesn’t have an equivalent list within a category. For the Top 100 Grossing list, they only rank the apps and don’t share any actual revenue numbers.

      [Moreover, only 6 Book apps have appeared on that list since Apple started it in Sep/2009.]

      Ben

  • Alasdair Allan

    Isn’t this basic economics? If something is priced cheaply, it will sell in larger volumes? So it makes sense that the “…top 10 paid apps were on average cheaper than those ranked 91-100.”

    The crucial point (from an economic perspective) is whether these applications are maximising their net profit. Is selling cheaply in larger volumes actually a winning strategy? Or are the those applications ranked 91-100 actually doing better in the real world? Surely what the margin on these titles is much more interesting than that they’re cheaper…?

    • http://radar.oreilly.com/ben/ Ben Lorica

      Hi Alasdair,

      “Isn’t this basic economics? If something is priced cheaply, it will sell in larger volumes?”

      >> I wanted to find out if this (cheap outsell expensive apps) is consistently the case, and from the graph, on average long tail apps do tend to be more expensive. However, cheap apps don’t consistently outsell expensive apps near the head of the popularity distribution. As an example, see the following graph for the week ending 2/14/2010 of the Top 2,000 apps.

      Ben

  • rabble

    It’s the oposite of what the media companies are trying to push for in the itunes store. They want to charge MORE for the widely popular things, and less for the obscure niche items.

  • Jim Lindstrom

    Ben,

    I was interested and I did a similar analysis for books — to see if the trend would hold for something lower-tech and with a much larger market.

    http://unpackingtech.blogspot.com/2010/02/ben-lorica-over-on-oreilly-radar.html

    jbl

  • MoxieMom

    Ben,
    Hello! I’m looking to price my upcoming iPhone book application, “Sleeping With the Laundry: Notes from the Mommy Track.” I was looking for what would be the optimal price. What price point breaks the sale? What price point makes it a no-brainer? I was considering the $2.99 price. It seems most top selling game applications are around $.99. Do you know where I could find more information? Any help would be appreciated. Thanks for the great research sharing so far.

    Margee
    http://www.moxiemom.com