December 20, 2014

Rethinking Android App Piracy

Every couple of weeks, somebody posts a link to some site that offers free pirated downloads of paid Android apps. Hacking a handful of phones to automatically slurp down the latest stuff on the Market is almost trivial, so this sort of thing will happen regularly.

The question is, what should the average developer do about it?

First, think about it with a level head. Yes, finding your stuff pirated raises emotions. No, being emotional when making business decisions is not a good idea — and dealing with piracy needs to be first and foremost a business decision.

I would start by ensuring you have a handle on the problem. Assuming your application needs or can justify the INTERNET permission, hook up with Flurry or some other analytics provider and start collecting data on the use of your app. I suspect that few pirated copies somehow attempt to disable such logging. Comparing the number of unique users reported via analytics and the number of unique users you get from the Android Market and other channels will give you a sense for how many pirated copies of your app are in use.

For the sake of argument, let’s say you have determined there are ~10,000 active users of pirated copies of your app. Considering there are only a few million Android devices in use, 10,000 would be substantial.

Next, you need to make an estimate of how many of those users would have found your application through traditional channels and elected to pay for it. Each of those is a significant hurdle, as there is no assurance that users of pirated apps are going to meander the Market much to find legitimate apps, let alone buy them.

Let’s say that there’s a 30% chance that a pirated-app user would have found your app in a legit channel and another 30% chance that those who find it would pay. Both of those percentages feel generous to me, as app “findability” is a big-time problem in mobile and paying anything for an app is a non-trivial barrier. But, with those odds, you have actually “lost” 900 sales (10,000 x 30% x 30%). And, let’s say you are netting 0.65 USD per sale after Market fees and such.

That means, for all those pirates, you’re really out $585, regardless of how many legit sales you have. Obviously, you will need to tailor all of these numbers for your own price and so on.

So, the question then becomes: what is the best use of your time? If closing down piracy is super-easy for you, such that you can take care of it just a few hours, it’s probably worth doing. If, on the other hand, trying to stop piracy of your app will take a lot of time and effort, you might consider whether you will do better devoting that time toward more marketing (increasing exposure and, therefore, legitimate sales) or towards an improved app (increasing the odds of purchases and, therefore, legitimate sales) or towards a business model that lets you distribute the app for free, so piracy is no longer an issue and might even be beneficial.

What you do not want to do is just jump into a long drawn-out battle against the pirates based on pure emotion instead of the facts of your business. Every hour you spend fighting piracy is an hour you lose for things that, hopefully, matter more to you, such as family, friends, or football (of the round or oblong variety).

Similarly, re-check your analysis from time to time. As Android grows, piracy may grow, and there may come a time when it becomes fruitful for you to invest the time, even if it does not make much sense today.

If you are interested in a more substantial analysis of why the effective price of your app will head to zero over time, I heartily recommend Mike Masnick’s posts on the Grand Unified Theory of the Economics of Free, also collected in his limited-edition book Approaching Infinity.



  • http://twitter.com/UnkzDomain @UnkzDomain

    On top of all this, you have to also consider the locations of the people who pirate your app and if they even have access to the paid market. With Google and the service providers not even allowing people to purchase applications, piracy is sometimes the only option for people who live in those locations.

  • http://fotogeek.posterous.com T.H.Foster

    I think the biggest negative aspect of piracy of Android apps (aside from it being illegal and wrong…) is updates. The majority of the Android apps that I use are constantly being updated, whether it be for a bug fix, new feature, or to support a new version of Android. Sure I can go pirate a copy of an app, but what happens when they finally add that feature I want? Go track down ANOTHER pirated copy? My laziness far outweighs my deviousness. I'll pay a buck or two and (in addition supporting the developer and furthering future updates) I'll get easy access to future version and notification when it's been updated.

  • Brad

    Well written article. I compare this to the mentality I have behind getting my oil changed. Sure I can change it myself, but I'm not that good at it and it takes me a while. I can just pay someone to do it, have it done in 30 minutes, and be on my merry way, or I can try to do it myself and spend 2 hours on it. Yeah I save 20 bucks, but I lose 2 hours in the process :)

  • Chris

    My biggest problem with piracy is not that it make me lose sale, it's that i'm paying webservices for my users. So pirates are effectively stealing money from my pocket… until i find a way to make my app free.

    • http://intensedebate.com/people/commonsguy commonsguy

      If you are paying per user for the back-end Web services, you better stop, or you will go bankrupt.

      If, instead, you are paying for back-end Web services based on overall usage (e.g., Amazon SQS per-message rates), then piracy has no more effect than higher-than-expected legitimate usage of your app. Now, that still may be a money-losing proposition, depending on the rates you have to pay, but it is a decision you should make not based exclusively on piracy.

  • http://twitter.com/MatthewPatience @MatthewPatience

    You know what, a lot of iPhone App pirates, such as Appulous, will say that they pirate apps because Apple doesn't have a return policy on apps. Android does, 24 hrs, and so this just goes to show that pirating of insignificantly expensive apps is just because of laziness.

  • Dianne

    This is a very good article on piracy of iPhone games covering many of the same issues:

    http://www.gamasutra.com/view/feature/4194/iphone

  • http://www.fallenunity.net joshua jones

    Being a very regular reader of both AndroidGuys and Techdirt, I just wanted to say that its awesome to see people promoting more progressive views on piracy that include realizing it is an issue with the business model and not any kind of moral dilemma.

    Similarly, I would just say to any developer facing concerns of piracy, look at some other examples of how businesses have dealt with piracy and how it has turned out for them. I believe we are all familiar with the music industry’s battle against piracy, and how little it has accomplished in the big picture. Meanwhile there are artists worldwide that are finding new and interesting business models to use where giving away the music simply increases the value of some other aspect of their business model.

    The same can be said of the movie industry, with many forward-thinking producers being ecstatic over being pirated. The movie Ink, for example, is an independent film that was recently pirated to hell. But rather than flip out, they saw the potential for taking their film further. It is now available on Hulu for free, allowing them to get a cut of ad revenue and still giving their fans what they wanted – the ability to see the movie, regardless of whether it has been released in their area.

    And for something a little closer to home, look at game developer and distributor, EA. They have had problems of piracy with the Sims games for years and used to try to fight it. But they have recently changed gears and are developing business models to allow them to monetize all those extra users, generally in the form of micropayments for add-ons to their games.

    Just keep in mind that, just as in most cases, being introduced to a much larger audience through piracy is generally not the end of business, but the beginning of a different and often much more lucrative business.

  • WillingSwede

    Well, like the first commenter suggest, there are places that can't get paid apps via market. Like Sweden for instance, I would, and will gladly pay for my apps as soon as that becomes available over here. With the low prices on apps for android, that ain't an issue.

    Sure, I could use market enabler to be able to purchase apps, but how am i to know whether i will be screwed over some day, since i hacked market?

    And sure, there are other app stores, that ain't integrated into the OS, so how about updates. As I see it, market is the only option, and I'm wondering why Google takes so long to give me the option to pay. I mean, Google Checkout is available to Swedes, so what is the problem?

    • http://intensedebate.com/people/commonsguy commonsguy

      "And sure, there are other app stores, that ain't integrated into the OS, so how about updates."

      I assume, therefore, that you never install third-party applications on Windows, OS X, Windows Mobile, Symbian, or any of the countless other operating systems for which third-party "app stores" are the norm.

      Just because Apple wants a monopoly on app distribution doesn't mean you should give Google one, too.

      • http://twitter.com/yannick_jo @yannick_jo

        Hi!

        About this all I can say is – thank god there are webpirates.
        I'll explain why:

        – I live in europe so most of the best apps are not available from the google market (locale restrictions by google). So, I spent time sending email to some developers asking for an alternative way to buy the apps the answer to most of them was negative even though I was willing to pay for them.
        http://lupislabs.blogspot.com/2009/09/robo-defens
        – Solution: well, I have some skils, and I went out googling around and managed to install "non official" versions of some my favourite apps.

  • http://www.keyeslabs.com David

    KeyesLabs has recently introduced a solution to piracy on the Android platform called Automatic Application Licensing. It's a simple and effective mechanism for verifying that users of an app have actually purchased it from the Android market.

    See:http://keyeslabs.com/joomla/index.php/projects/au

  • Jim

    How do I find these pirated apps? Any time I try to buy something through Google Checkout that's priced in Euros, my order is canceled "for possibility of fraud". Yeah, apparently buying anything from Europe is fraudulent. I know a lot of other people are having the same problem, which might help explain why developers aren't making any money. Paypal has no such problems, but the Android Market doesn't have Paypal. So until Google Checkout fixes their broken crap and processes payments in the US, my only options are:

    1. Go without
    2. Pirate

    I can't get money to the developer either way, so I might as well choose #2.

    • Mark Murphy

      I just make a purchase in Euros and had no problems. Please contact your credit card company to determine what may be going wrong with your transactions (out of sync address, out of sync phone number, card not authorized for cross-currency transactions, etc.). Credit card companies tend to be more skittish when it comes to international transactions — about 5% of my international book sales get declined by Amazon Payments, for example, due to credit card failures. So, unless you have gotten positive confirmation from your credit card company that they did not decline these purchases, you don't know where the problem truly lies.

  • http://www.marty.com.au Arty Marty

    I have used about 4 pirated apps on my phone, and eventually purchased them all. If I get an app and use it for a week or two, then I just buy it – that way it supports the developer, and I dont have to dick around looking for the latest version every week.

    There were another 5 I didn't buy, but I decided after about 4 days I didn't want them anyway, so would not have purchased.

    So really, I dont think developers should worry about it.
    I have spent about $30 on apps, so far, and if not for the android black parket, I wouldnt have!

  • https://muhammadf0628.student.ipb.ac.id farhad

    stop puracy man..

  • http://www.e-military.pl militaria

    Swietnie bojowki znalazlem w tym sklepie

  • Jimmy

    This article is not a viewpoint from a business perspective. It totally fails to mention the fact that pirating can, in the US, be considered copyright violations, especially if they are distributed over torrents. Judgments on copyright violations are often 3x licensing costs. One should note that licensing an app is not the same as purchasing it. Although I may sell my app for $2, I may license its distribution for $3000. Realistically, I can take a person to court for a judgment of $9000 against a person who distributes or downloads via a torrent (since with torrents you act as a distributor too).

    Those that do not understand how the RIAA can sue people for $120,000+ for downloading music that can be purchased for a couple dollars are ignorant to intellectual property laws that exist.

    Many pirates are not only stealing your software, but they are also encroaching on your distribution rights which are protected under copyright law. People should think their lucky stars that developers do not come after them. Fortunately, many developers do not understand their rights.

    Developers could sue the pants off of people who steal their apps, and all it takes is capturing that person’s ip address in many cases. That only takes a simple request to a server if an Internet connection is active. Anonymity on the Internet only exists down the the second to last node, so a developer could easily see what ISP you use, contact them, and get your information.

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