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THE MONEY SHOT
Who Is Making Money in the iTunes App Store?Friday, January 14, 2011 The smartphone app platform is only a few years young. Until now, most publishers have sunk money into app development on spec. At these early stages, the game is about discovery, learnings and perhaps  achieving some preliminary scale. But ultimately, the promise of the mobile platform has been getting direct revenue from consumers. Mobile breaks the Web habit of expecting something for nothing, the media mavens insist. People pay for stuff on mobile platforms, and most of these new media have built-in incremental payments systems that make purchasing easy. But are magazine brands making much money here? Few publishers are ready yet to speak frankly about their mobile app revenues. The ABC reports that do break out digital magazine revenues give some indication of iPad sales, but what about the wider world of iPhone/iPod iOS apps? One rough indicator of financial success in apps are the lists of "Top Grossing" apps in Apple's App Store. This week, we decided to take a quick look at which magazine brands and their paid app projects have made their way into the top grossing lists. Some of the best showings from magazine brands come in the news division where Harvard Business Review’s "HBR Today" ($2.99) is ranked eighth in earnings. Slate ($1.99) is 20th. And Newsweek Mobile ($1.99) is at #28. In the entertainment category we have to dig a bit deeper to find a magazine brand represented. Cosmopolitan’s "Sex Position of the Day" ($2.99) ranks at 59th among money-earners there. Maxim ($2.99 per issue) is at #78 and Vanity Fair ($4.99) is at #84. It is in the lifestyle section where the service books show some real traction with iPhone users. Right now the recently released Real Simple Recipes: No Time to Cook? ($4.99) app is the second-highest-grossing app in the category. Not far behind at #9, AllRecipes.com's Dinner Spinner Pro is selling well. And Glamour ($3.99 per issue) is #21, while Epicurious' Recipes and Shopping List (#23) seems to be making incremental revenue from its $1.99 upgrade that allows members to sync their app to their Web site profile. In healthcare and fitness, Rodale continues to show that a diverse, service-driven portfolio of products can keep the brand in the money on mobile. The new Eat This, Not That Restaurants app may be a pricey $7.99, but users have made it the second-highest-grossing app in the category. And Rodale’s Men’s Health Workouts ($1.99) is at #14. The company’s Cook This, Not That ($7.99) is #20. The top-grossing designations at the Apple App Store are as inscrutable as the best-seller lists. The time span covered by the list is always unclear, for instance. Moreover, there is likely a substantial difference between being a top-grossing app in a high-volume category such as lifestyle and topping a less-trafficked zone like travel or medical. Still, even this cursory review of magazine brands appearing in the App Store’s top grossing lists suggests that magazines have a shot on these platforms. Their brands appear to break through with a promise of quality and reliability in a cluttered catalog of no-name contenders. The one clear pattern that emerges is that on smartphones, at least, people are not looking for magazines. They are looking for creative rethinking of content into utility. It's an app, users are telling publishers, not a magazine.
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