Mobile Piracy, Schmiracy

After seeing this recent story on limiting mobile app piracy via jailbroken devices, we wanted to get a developer’s take on how seriously they consider piracy in their development process. Here’s bitHeads‘ Jeff Bacon with the answer.

Mobile piracy is a far cry from the BBS / FTP / IRC / Gnutella hay-day of PC piracy in the ’90s. PCs are pretty much wide open platforms where data, app and ecosystem protections have, traditionally, been virtually nonexistent. Contrast that to mobile platforms which started as totally closed (J2ME), then open (BlackBerry), then closed again (iTunes App Store), and now a mix. Throughout the last decade or so of mobile app development, mobile app piracy has always been possible, but possible doesn’t always make it problematic.

Looking at the problem of mobile piracy starts with trying to assess the economic impact of piracy on the mobile developer. To start, throw out almost every dollar-value statistic you hear about software piracy (mobile or otherwise). It behooves corporate entities and advocacy groups to count every single instance of piracy as the loss of a full-price sale. This allows a company to have inflated numbers when pressing for legislative solutions to piracy as well as tell their shareholders “if only it wasn’t for piracy, look how much more money we would be making!”

It’s important to try and decide what percentage of the instances of piracy actually represent a lost sale vs. which are additional users that would have chosen a competitor or gone without were the piracy option not available (or too much effort to be worthwhile). Some people have looked at the percentage of jailbroken iOS devices and made the leap to say that that percentage is a reasonable estimate of the piracy percentage on iOS. However many people jailbreak their device for less nefarious reasons than piracy (I have been in that camp many times). BlackBerry applications (surprisingly enough) have always been the easiest to copy off of a device, and yet, in all my years of shipping BlackBerry applications, piracy was never more than a minor concern on the platform.

There’s a theory (that I mostly subscribe to) which says that people have a specific amount of disposable income that they allocate to various activities. If someone gets something for free (like a pirated app) they are not likely to pocket the cost of the application, but to re-allocate those funds — and just as likely to re-allocate the funds to another app. So by that theory, app piracy does as much to add users to an app (and possibly another advocate for your app if that person becomes a fan) as it does to deflate actual revenue. If a person doesn’t have the disposable income to spend on your app in the first place, pirating it isn’t really a lost sale.

Game Center Piracy

Taking into account that you don’t lose money by having someone pirate a free app, the freemium business model has further mitigated losses suffered by mobile developers. By monetizing via ads and/or in-app purchases, any free downloads (legit or not) can still result in a paying customer. That doesn’t mean that there’s no piracy risk for in-app purchases, but all piracy prevention is a trade off between locking down your app, and putting barriers in place for legitimate users. Since most software piracy is a function of how easy it is to pirate the app, leveraging in-app purchases and ads means that the effort for pirates is increased and the casual pirates probably end up monetizing anyway (even if at a lower rate than normal users).

Ultimately, piracy is not a “non-issue” for mobile developers, but it’s much more valuable to focus on monetizing all users and driving up legitimate sales, than it is to spend an in-ordinate amount of time locking down your app super tight or fretting about mobile app piracy. In the end, the apps people pirate most are the apps that are desirable. If you create a desirable app you’ve got the first (and most important) step done to creating a successful app and should focus on figuring out how to monetize the average user better rather than worrying about the typical software pirate getting your app for free.

About the author

Jeff Bacon

Jeff Bacon is the Director of Mobile Strategy at bitHeads Inc. He helps companies understand how to best bring their business to mobile and plan execution strategies to maximise the value mobile can bring to any business. You can read more on the bitHeads’ blog: www.bitheads.com/blog or follow @bitHeads or @TheSuaveHog on Twitter. Check out bitHeads’ mobile portfolio here: http://www.bitheads.com/mobilecustomershowcase.php

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