According to analysis by 24/7 Wall St., Apple and App Store software developers have lost more than $450 million to piracy since the store’s launch in July 2008. Who’s to blame? Jailbreakers. Users who jailbreak their iPhones can do a number of things that Apple doesn’t approve of, such as modifying the operating system or installing programs that don’t come from the App Store–programs that they would otherwise have to pay for.
Josh Knowles, one of my fellow Austin-native friends from way back, told me recently that his firm’s iPhone game, Critter Defense, was pirated more than bought. I was naively shocked to hear that piracy even happened in the iPhone world. But of course it does: so long as you unlock your phone and surf the piracy sites. I was reminded of that conversation over beers by Jeff Bertolucci’s piece today on the same topic, quoted above.
So, I asked Josh if he’d comment on it post-beers. He said:
[W]e see about 85-90% piracy rates. We know this because we ask all players to create a simple user account (really just a screen name) before any score will post to the global high scores list. We see about 8-10 new user accounts in our system for each sale that shows up in Apple’s iTunesConnect system.
We had a significantly lower piracy rate at first (<50% for sure, although I don’t know exactly) until we were featured on the front page of a major hacked apps website. On that day we saw ~5000% increase over our average daily new user accounts (which was awesome), but at about 99% piracy rate. Since then we’ve settled on this ~85-90% piracy rate.
He went on to say that while he’s annoyed, he’s tolerated it because of the business the app help drives in the rest of his life. The exposure, experience, and reputation they get from iPhone app development translates directly into cash for consulting and other projects. Indeed, over the years Josh has carved out an excellent niche for himself in innovating and developing social, mobile, and gaming projects, like any good ITP alum would.
The implication for those who do want more direct monetization, of course, is to figure out ways of getting cash outside of just the AppStore – Evernote is an easy example here: their app is free, but you can pay for more storage and features on the backend. The WordPress app fits here, and you can imagine people like Dragon hooking their text-to-speech application up to a service who’s billing is done outside the confines of iPhone-land.
Sounds like they should just open source their games and be done with it?
Ian
A couple things worth pointing out, neither of which changes the fact that app store piracy is illegal and wrong:
1. The 24/7 Wall Street excerpt seems to paint jailbreakers with an over-broad brush. A good portion of them are ethical folks who just want to exercise their right to install whatever software they see fit. Many popular apps that are installable only on jailbroken devices are distributed under open-source or freeware licenses. Conversely, plenty of apps in the app store are available free of charge, so the statement that jailbreakers are installing "programs that they would otherwise have to pay for" is doubly disingenuous.
2. Some portion of the "username inflation" may stem from the fact that all Touch platform devices on the same iTunes store account are authorized to download apps previously purchased on that account. For instance, I bought Tweetie on my iPod Touch. Since my wife and I share an iTunes store account, she can install Tweetie on her iPhone without paying for it again.