App revenue split more profitable than paper?

Publisher Penguin Books this week demonstrated a series of possible iPad books, presenting the concepts at an event in London, England. A number of titles may, in fact, bypass the iBookstore for the App Store, in order to enable interactivity. A children's book for instance could permit coloring drawings while reading, and still other titles could enable live chats, or augmented reality functions like displaying constellations over the real night sky. A book on human anatomy might allow people to zoom in on individual body parts and load animations on how they work.

The CEO of Penguin, John Makinson, argues that the iPad is the "first real opportunity" for a paid distribution model that people will like. "The psychology of payment on tablets is different to the psychology on a PC," he says. E-books could account for as much as 10 percent of book sales in 2011, according to Makinson, although Penguin may largely ignore the standard but non-interactive EPUB format.

"We will be embedding audio, video and streaming in to everything we do," he elaborates. "The EPUB format, which is the standard for e-books at the present, is designed to support traditional narrative text, but not this cool stuff that we're now talking about. So for the time being at least we'll be creating a lot of our content as applications, for sale on app stores and HTML, rather than in e-books. The definition of the book itself is up for grabs."

The executive notably comments that although Apple will be able to claim 30 percent of revenue from Penguin apps, the arrangement may still be preferable to the print world. There retailers can keep as much as 50 percent of revenue, even if they often charge higher prices. Penguin will be experimenting with pricing and access to consumer data, says Makinson. "There is an argument for saying Apple needs the content, that they should be paying us for our content," he adds, even if Apple has not been amenable to bargains so far.

by MacNN Staff