The popular Sports Illustrated swimsuit edition recently was re-imagined by publishers as a mobile app and the initial debate internally centered around the proper price point. Eventually the decision was made to offer the base application for free and charge a $1.99 upgrade price for a premium version with more content and viewing options.

Now more than a half-million downloads later, the ‘free version’ has generated a healthy 10% conversion ratio and brought in more than $100,000 in revenue, beating all expectations of what a paid price point would have generated for the media company. Unfortunately, these numbers represent the iPhone version from Itunes only and that means the company was charged a 30% fee for the privilege of accessing Apple’s proprietary marketplace.

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