Sports Illustrated 2010 Swimsuit iPhone App Converts 7.8% In-app Purchases to Earn $45K – About 10x Required?

The annual Sports Illustrated Swimsuit issue is out and available in multimedia form for the iPhone…

SI Swimsuite 2010

So, how does SI generate revenue from a free app? And, might it not reduce sales of their paper magazine? The 2010 edition of the app is currently at #19 in the list of top free apps. It has been rated by 27681 users so far (3 stars out of 5). And, yes, it has an in-app purchase option that unlocks additional videos and photos for $1.99.

MinOnline has an interesting article that provides some answers to question of how SI makes money from this free app…

SI’s Freemium iPhone Model Converts 7.8% of 411,000 Downloads

MinOnline reports that 32,257 people (a small bit more than the 7.8% conversion rate) paid $1.99 for the in-app purchase option. That works out to $64,191.43. Apple’s cut is 30% of that. So, SI has earned $44,934 from their most popular edition of the year (at least it has been in the past). I suspect that SI is quite pleased with this second try of their Swimsuit app. But, my guess is that their conversion efforts probably need to be increased by a factor of 10 for every issue to be profitable. That is the challenge for dead-tree publications going forward.