The Price is Right: What to charge for App Books

I've been watching the slow but steady erosion of app book prices especially in the children's book area. It's not unusual to see really excellent app books for kids selling as low as $1.99 or even 99 cents. It's hard to imagine how anyone can create a decent product that will retail at 99 cents and net about 70 cents after Apple takes its 30% cut. Oceanhouse Media sells its Dr. Seuss titles for $3.99 and other tiles (e.g. Berenstain Bears) for even less. In my opinion titles by Dr. Seuss should sell for at least $4.99. So why are they so cheap? It's simple supply and demand. A Dr. Seuss title at $4.99 might sell 50 copies a day while the same title at $3.99 would sell 100 copies. It makes sense to lower the price and to gain more sales, but in the long run its deminshing the brand. Short term benefits are hard to resist in an industry as competitive as the app book market.

This is one reason I prefer publishing adult and young adult titles to children books. The assumption is generally that children books, because they are shorter, are easier to produce but its my experience that that is not true at all. With children books you have to have far more effects to maintain a child's interest. With Adult and Young Adult books you can get away with less effects in favor of higher-quality content. LEVEL 26: Dark Prophosy, which I reviewed a week ago, is an excellent example. It retails for $12.99 and is currently listed in the New and Notworthy on the App Store. Although it has an hour of complementary video it has far fewer effects than you would find in one of the Dr. Suess titles. That said, according to an interview with its creator the app book cost a million dollars to produce. No small potatoes.

Other titles such as Mrs. Spider by Callaway, which retails at $7.99 and is beautifully produced, seems more reasonable - I'll bet it cost at least $50k to produce that book. The Elements and The Planets by Touch Press retail at $13.99 which is a bargain considering the quality. In the end the adult titles will continue to be priced higher because adult books in general have a higher price point. However, the cost of creating adult books need not exceed the price of creating really good children books.

As the prices of children app books erode the quality will also fall. Only organizations like Oceanhouse Media which are experienced and very process driven will be able to compete at that level. You just can't make a living on children's books at the prices they are selling today unless you can produce one every 10 days and get them all sell in the top 100. That's not me making up numbers - its based on months of analysis and real word experience. Children books for start-ups is largely a dead market unless you can really distinguish yourself in the way that Loud Crow has done with its Peter Rabbit title. And as far as I can tell very few publisher are producing works at that level (see my list the best of the best publishers).

In the end the future of App Books is not in the children's market. It's in the adult fiction and non-fiction market. That's where we'll see the most profits and the great innovation because unlike the children book market the price points are higher and so companies can afford to take more risk and put more into the production of these books.

Quality: You can't game the consumer

My philosophy about how to win with app books has not wavered since I first thought about building my own app books in April of 2010. This is when the iPad was first released and two of the best, and the most influential, App Books were first released: Alice for the iPad and The Elements.

What Alice for the iPad and The Elements have in common is not that they were first out the door - although that helps - it's that they were, and still are, built with quality. By quality I mean not only great design but nearly flawless execution. Both books are wonderful to behold and work great. It's a lesson that I don't think app book developers, in general, take to heart.

The fundemental reality is this: People don't want to buy app books of low quality. Seems simple, but time and time again I encounter people who believe that its all about the special effects, or manipulating the ranking system, or producing lots and lots of low quality books cheaply (a numbers game), or, and this one gets me the most; its all about marketing and has little or nothing to do with quality. I hate that last argument most of all because it explifies a business strategy that has, as a fundamental tennet, that consumers are idiots.

Well, I got news for all those entrepreneurs who are trying to win at app books by gaming the consumer, you will lose. You will go belly up. You will not be remembered. Consumers are not stupid and they are not going to fork over their money for anything but the best quality app books.

One of the companies that I admire is Touch Press, the company that was formed by Theodore Gray, Stephem Wolfram, and Max Whitby. Their first book, The Elements, has (as of Feb 2011) sold over 180 thousand copies at $13.99. After Apple's 30% cut that's $1.7 million in net income. Their second book, The Planets, has sold 30 thousand copies in less than three months (net in excess of $300,000). Both books are of the highest quality and while marketing has certaintly helped, the real reason these books succeed is because of quality which results in postive blog posts, news articles, and a ton of word-of-mouth. Here's a quote from Max Whitby of Touch Press from a September 2010 interview.

... we got some incredibly good reviews and comments, and Steven Fry Tweeted his very kind comment that our app was alone worth the price of the iPad. That was a really nice endorsement. I think that something else it taught us was just how impossible it is to market an electronic book in an old fashioned way, you just have to really produce something that’s extremely good so that it gets recommended by word of mouth and that is the single most important thing you can do to ensure you’re successful.

For every really good app book publisher there are probably 20 really bad ones. I'll list the app book publishers that I think are the best of the best right now: (listed in no particular order)

Touch Press
Loud Crow
Moving Tales
Oceanhouse Media
Anthony E. Zuiker and Hooray Society
Callaway Digital Arts
Atomic Antalope
PadWorx Digital Media

If you want to succeed in this business you have to emulate these app book publishers. Download their app books, study them, read interviews with the designers and founders, and learn how to do it right.

I'll leave you with one more quote from that September interview with Max Whitby where he gives advice to app book developers:

Focus on quality. Concentrate on doing really good things, and it goes back to what I was saying a few moments ago about how you market these titles, but the bottom line is what you produce has to be just excellent, and if it isn’t you might sell a few hundred, you might even sell a few thousand copies, but you’re not going to have a really big hit so concentrate on quality. The other thing I’d say is don’t try to do it all yourself. This is a new medium that really needs a collaboration between designers, software engineers, authors, writers, photographers, animators, and you don’t want too big a team, but you do need a combination of talents, so if you’re a individual and you want to get into this area, see who you might work with who have skills that match yours and compliment yours.

Anthony Zuiker's LEVEL 26: A New Era In App Books

Anthony E. Zuiker, the creator of the hit TV crime show CSI, has broken new ground in the App Book industry with the introduction of LEVEL 26, a series of App Books enhanced by character biographies, short films, and a social community.  It's like nothing we've seen thus far and its sure to usher in a whole new category of App Books (or what Zuiker calls Digi-Books).

I keep a constant watch on the new releases in the Books category of the App Store. It's important to know who is doing what. I'm always surprised by someone but latest installment of this series of LEVEL 26 App Books, Dark Prophecy, is the most surprising since the first great App Books, Alice for the iPad and Elements, were introduced close to a year ago.  And, its no less important.

Alice for the iPad and The Elements (both winners of the 2010 Electronic Alice) introduced the world to the power of App Books with a radically  new way of experiencing entertainment (Alice) and knowledge acquisition (Elements).  To be honest they are not the first, the CD book movement which surged and then faltered in the 90's did something like App Books are doing today. The Big difference: The Tablet form factor.  Interactive CD books failed (as well as attempts at interactive web books) because of the delivery device, the PC.  No one wants to snuggle up with their PC or laptop and read a good book.  The Tablet form factor, and in particular the iPad, made App Books possible.

Back to LEVEL 26.  There are three books in the LEVEL 26 trilogy starting with Dark Origins which was released for the iPhone in October 2011, and the second book, Dark Prophecy - the third book is not available yet. In both books the main antagonist is Steve Dark, a detective who specializes in finding the worst of the worst serial killers: Categorized as LEVEL 26 offenders.

If it was just another set of App Books combined with video (e.g. Vook) it wouldn't be not worthy at all, but its much more than that.  Developed by Hooray for Dare to Pass, Inc. (Zuiker's Production company) the books are so well written they are totally engrossing. I don't even like these kinds of books as general rule (i.e. thrillers, murder mysteries) but when I started reading the Second book Dark Prophecy I couldn't put it down. The writing is that good. Good enough to get me to jump genres and that's an accomplishment.

But its not just the writing. In addition to supporting the kinds of functionality we should expect like the  ability to change orientation and the text font size and style, the LEVEL 26 books are simply well put together.  The introduction of video every so often is really timed well - just enough to aid the story and give you a stronger sense of the characters as well as the total creepiness of the killers. The video portions are shot with the same production values you'll find in big budget crime shows like Zuiker's own CSI.  But even without the videos the ability to see a character's profile at anytime as well as the excellent writing alone make these books a joy.  The quality video shorts push them over the top to become ground breaking.

Zuiker's new App Book Dark Prophecy is simply put, the best thing to happen to App Books since Alice for the iPad and The Elements.  I fully expect to award this book an Electronic Alice in 2011 for innovation alone.

2010 Electronic Alice Awards

Last year the App Book market was born with the launch of the iPad. In the years to come we are going to see a lot more App Books - thousands of them - and in ten years it will be standard fare. But for now its all new and shiny.

I've been thinking about recognizing the best of App Books for last year as a blog post.  In honor of Alice for the iPad the App Book that caused me to start a new company and become obsessed with this industry, I have decided to start my own personal awards for best App Books of the year.   I call it the Electronic Alice awards.  Maybe some day I will make a little statue and send it to the winners. ;-)

So let's open the envelope and see who the winners are:


Alice for the iPad by Atomic Antelope
This book set the standard for the fiction segment of the industry. It was innovative and wonderfully made. It also sold a lot of copies which really isn't important to winning an Alice but its certainly good for the developers.

The Elements by Touch Press
What Alice for the iPad did for children's app books The Elements did for non-fication titles.  It set the gold standard and caught international attention along with over a 180 thousand sales in less than a year.

The Pedlar Lady by Moving Tails
Combining animation and text this book was beautifully crafted and probably under appreciated by the general public. Still it was an incredible achievement of art and innovation.

The Tail of Peter Rabbit by Loud Crow Interactive
Released near the end of 2010 this children's book is so well designed it actually put me into a depression (not really) as I tried to figure out how I can ever top it.  It is so elegant and beautifully designed that, although it was not entirely innovative, it set the bar so high in terms of aesthetics that other app books will be struggling to meet its standards for years to come.

Dracula by PadWorx Digital Media
This application was really the first full adaptation of a complete novel by an app book publisher. It has great graphics and fun interactions and is recognized for both its quality and its innovation. Another aspect of this book that was interesting was the integration of an album of 16 songs related to the material by a variety of artists.

That's it. I don't really give my Electronic Alice winners categories as that doesn't seem appropriate and because it makes me place artificial constraints on my choices.  I don't expect the Electronic Alice to become the Oscar of the App Book industry but I do look forward to naming the 2011 winners this time next year.

I'm Back!

Well, its been a very long time since I posted on this blog and to be honest I've really missed it. I guess I'm one of those people who need to share his ideas and to make contact with the outside world.

I've been working for about 7 months now on a start-up, FlyingWord, that is focused on the development of enhanced books for the Apple app store. We've released a couple of books including Treasure Island, 'Twas The Night Before Christmas, and A Christmas Treasury.

My over all feeling about these books is a bit mixed. I'm proud of the fact that we were able to produce them, get them on the app store, and enjoy some healthy sales. But, I've never been pleased with the outcome. Most people like them and our customer rattings are good but I can't help but feel that we could have done a lot better. This is probably common among folks creating anything. I know that every time I wrote a book I always thought it could be a lot better.

I've been watching the app book industry expand as new players like myself enter the market, offer their best efforts, and then wait to see how the market reacts. Some folks have outstanding marketing and produce so-so books. Others have fantastic books and no marketing. The later seems to be more sustainable in my opinion. Obviously, having great apps and great marketing is ideal but its hard enough to do one or the other let alone doing both.

As for me: I would rather create a beautiful book that enjoys moderate success than a mediocre book that is a landslide success. I'm a creative and I'm never statisifed with anything unless its beautiful and elegant; to be honest I don't achieve that benchmark very often. Never statisifed; that's me.

So looking forward I want to take the time to create absolutely beautiful and fantastically useful books. One thing I'm interested in is creating books that actually help people with learning disabilities to read. I had a meeting the other day with a woman who specializes in assistive technologies for people with dyslexia. It became quickly apparent to me that the an app book might be the perfect vehicle to get people with dyslexia, who tend to avoid reading for the most part, to read and enjoy the experience. Give them something fun and interactive but with features that help them with reading and I think we can change the lives of these people dramatically.

Sadly what I've seen in the assistive reading software is really horrible. I mean the mechanisms by which they assist readers are very nice but the applications themselves are horrible to look at and the content is pretty ugly. No pictures, poor typesetting, nothing that says, "Hey, read this book because you'll love the experience." I would like to change that.

So whats holding me up? Well, I have to put food on the table for one thing. Creating app books that help grown ups and young adults read better is not a very sexy technology. Venture capitalists don't want to help people; they want to make money now. As a friend told me once, a venture capitalist wants to put 50 cents in the top slot and be assured that $5 will pop out the bottom slot as quickly as possible. So unless you have a sure thing, no one is interested. I can't blame them. I just wish there was a group of investors that lead with their hearts rather than their wallets.