Slashdot Mirror
App Store Piracy Losses Estimated At $459 Million
An anonymous reader passes along this quote from a report at 24/7 Wall St.:
"There have been over 3 billion downloads since the inception of the App Store. Assuming the proportion of those that are paid apps falls in the middle of the Bernstein estimate, 17% or 510 million of these were paid applications. Based on our review of current information, paid applications have a piracy rate of around 75%. That supports the figure that for every paid download, there have been 3 pirated downloads. That puts the number of pirate downloads at 1.53 billion. If the average price of a paid application is $3, that is $4.59 billion dollars in losses split between Apple and the application developers. That is, of course, assuming that all of those pirates would have made purchases had the application not been available to them for free. This is almost certainly not the case. A fair estimate of the proportion of people who would have used the App Store if they did not use pirated applications is about 10%. This estimate yields about $459 million in lost revenue for Apple and application developers."
A response posted at Mashable takes issue with some of the figures, particularly the 75% piracy rate. While such rates have been seen with game apps, it's unclear whether non-game apps suffer the same fate.
Look at the bigger picture. There are hundreds of thousands upon millions of smartphone users out there who want applications for their phones.
Who is next to set up a viable store? Microsoft? Google? A carrier?
Piracy is a minor problem. Monetizing users is the major problem. Can you interest users into buying your phone? What sales model can you use to get them to part with their money?
Who cares about Apple? They are just another player.
I'm suffering massive losses too - nobody gave a billion dollars yesterday! That's a billion dollar loss in a single day!
Looking around I have yet to see a single friend of mine with pirated apps. I'm just saying.
I call bullshit. There's no way that the tiny percentage of jailbroken iPhones could account for 75% of the apps in use.
If this isn't through jailbroken phones, then how are people pirating it? It's not like anyone has built a homebrew iPhone...
Liberal? Conservative? Compare perspectives at Left-Right
Big made up number is still made up.
I have an jailbroken and unlocked iPhone, but I haven't even tried to pirate apps from the app store. Frankly, I didn't know it was possible. In the past I have pirated almost everything. I just dont see the benefit of piracy to save $5 especially since it's probably a p.i.t.a to pirate an app store app. These figures look like hot air to me.
--------- I have no signature
That's exactly how it works. Unfortunately, the article makes a few (ok, a lot) of very bad assumptions (how many times can you use Assume and Estimate in a story?). They used a very popular app that 'phones home' as their yardstick, and then applied that yardstick to every app purchased in the store, all the way down to the dregs like the fart apps. Although copyright infringement on popular apps may indeed be that high, I find it very hard to give this credibility that every app in the store would have an 75% infringement rate.
"Assuming the proportion of those that are paid falls in the middle of the Bernstein estimate"
Do they even realize how ridiculous this sounds?
I think the 10% figure is completely and totally made up, pulled from the aether, with very little to back it up. However, I was floored to see that this concept was even addressed at all in the "loss" estimation process. You know that MPAA and RIAA don't acknowledge the phenomenon that if someone finds something on the sidewalk, they're more likely to pick it up than if they find the same thing for sale, even if the price is just a nickel. I hope that with repeated exposure to the concept, the whole industry will finally concede this point, but let's just say I'm not holding my breath.
[
I'm pretty sure that by tweaking a little their formula and figures, we can compute the probability of the article's authors to get laid with an alien life form.
I have discovered a truly marvelous proof of killer sig, which this margin is too narrow to contain.
Lets assume the number was accurate to the cost of the all the pirated apps...how then can they assume, given the ability to not be able to jailbreak the phone, that the pirate would pay full price for the apps that they would have potentially pirated?
The pirated market is grossly misrepresented. Most pirated movies/music/games are pirated because of availability. If it wasn't available, the pirate still wouldn't pay the original price for it. Recent success in said industries proves this.
I have 2 iPhones on the same iTunes account. Apple legally lets me installs app's bought on my first iPhone for free on my second. My guess is this would trigger piracy flag, as they would now see 2 iPhone unique ids for one purchase.
www.hackzilla.org - because I can
The statistics in a lot of these stories are such that if a pirated app is used once and thrown away, it's been "used".
Techdirt did a nice deconstruction of the 24/7 Wall Street analysis. In a nutshell, 24/7 Wall Street applied the Drake Equation to iPhone apps, piling on layers of hand-waving to come up with their figure.
And, to show off his geek cred, Techdirt's Mike Masnick included the xkcd Drake Equation comic.
The Busy Coder's Guide to Android Development
First of all, all of the numbers they have are pulled out of their ass. Second, there is no recognition of the fact that curiosity is not the same thing as a lost sale in the digital realm.
For me, I know that when I was younger I pirated all kinds of software, just because I wanted to see what it did. As I got older, I paid for it when I could afford it. This was the only option for those of us who didn't have an edu e-mail address to get the "taste" that the companies provide at ridiculously low prices.
I sincerely hope that Microsoft, Adobe, and Autodesk get together and create an unbreakable DRM scheme. Open source projects would immediately improve as the user base started to explode. Their marketshare would begin to reflect what everyone else already knows - that "piracy" is a vital part of their product cycle. It allows people to learn their software without burdening their support team, and hooks them into that workflow. When that person begins depending on the workflow, or begins work for a company, they are very likely to buy that product.
If they really wanted to see sales improve, they would charge according to the age of the user. If the price steadily increased from $50 to $1000 or whatever, with no upgrades unless you paid full price, and flattened once you hit age 30, there would be constant pressure to buy each year before your birthday. Companies would get thousands of curious new users every year to resell to, and they would get money, and the whippersnappers wouldn't have to worry about going to jail over the greed of some fat men feeding in Silicon Valley.
These losses from piracy are always talked about in terms of the damage they do to the economy, but I have to take issue with this; that money that isn't spent on pirated apps doesn't just vanish, it's still there to be spent on other things. Now, you might argue that maybe it won't be spent or will be spent on things that transfer money out of the economy (such as overseas businesses), but if you're spending money on the App store and don't live in the US then that's really the case anyway.
If I pirate a $10 app, that's $10 I can spend on a CD or going to the cinema or getting a takeaway or whatever, it's not $10 that magically disappears from circulation.
Few months ago Apple changed the rules and they now allow in app purchasing from free apps. before you had to charge for an app to so in-app purchasing. This allows companies to give away stripped down demo type apps with limited functionality and charge for features, new levels, weapons or whatever. And from what i'm reading on the internet it's very easy to detect jailbroken iphones and not allow them to do in app purchasing. pretty much all the piracy that was out there was on jailbroken iphones because it was easy to rip out the app DRM. the solution is to not allow any jailbroken iphone to purchase in app content
So if I download a torrent .zip of 10,000 paid apps, $3 each on the average, AppStore just lost $30,000 in sales?
Like, I would purchase them all otherwise?
45 5F E1 04 22 CA 29 C4 93 3F 95 05 2B 79 2A B2
Works just fine.
- Raynet --> .
That's an excellent point, and something that is often forgotten when talking about numbers surrounding piracy.
So an iPhone user doesn't spend $20 on a couple apps because they pirate them. Apple and software developers lose out on $20. Then, the iPhone user buys four mochas at Starbucks with the $20 they didn't spend on apps. Net loss to economy = $0.
Even if people "save" money instead of spending it, if that saving consists in investment, it's often providing capital for those who want it elsewhere in the economy. These "losses" are almost never actual "loss" to the economy as a whole, they simply result in a different distribution of the same amount of money.
The same goes for all the piracy statistics thrown about for foreign countries. I was recently discussing this with a colleague; sure, maybe country X pirates $20 million worth of CAD/CAM software. Then, they turn around and spend $20 million purchasing CNC machines from US companies.
"Anyone who [rips a CD] is probably engaging in copyright infringement." - David O. Carson
from a youtube video i watched it appears you...
1)jailbreak
1)install cydia
2)add all repositories
3)find and install installous
4)you now have access to pretty much every app, browses very similar to app store just a whole lot slower
you can also download them to your pc, and sync with itunes
There are many torrent that offer many DRM free or cracked ipa files. You just drop them into itunes and they copy over like a regular app. I for one use a few that I have purchased in the past but for one crash or another no longer have. Though if you could get the full version of most apps on a trial basis I would be more inclined to buy some. I hate the fact that about 90% of the apps I download turn out to be utter crap.
There's another nice deconstruction by the Right Rev. Stuart Campbell, games journalist and iconoclast: http://wosblog.wordpress.com/2010/01/15/the-most-spurious-piracy-figures-ever/
You hit the nail right on the head. How many times have I looked at an App's description, then turned away because I was "on the fence" ? What I would love is a 48 hour refund window. Buy the app, try it out, and if it is absolute shite (like most are), get your $2.99 back. You might be saying "three bucks is nothing", and you're right, but I am quite vehemently opposed to giving those three bucks to some asshat who can deliver a great writeup for a shitty app. The store ratings are also useless, because it's a well known fact that 99% of users are clueless idiots, so unless I am a also a clueless idiot, those ratings won't apply to me.
Prime example: RDP and VNC clients. There's about a dozen or so out there, and I've tried them all. All but one of them suck ass, whether it's sluggish performance, lack of configurability, or in one case I was expected to register all my usernames and passwords to a 3rd party so the app could sign in to their web service, just to give me back my logins. They also don't come cheap, $9.99 up to $24.99 for some of these stinkers. Am I really expected to spend $100 trying all these things, just to settle on the one that is indeed everything I want it to be ? Is it fair to the one good app, that all the others got paid anyway ? I think not. That one great developer deserves compensation and praise, the other 10 deserve a kick in the nuts and a chargeback fee.
-Billco, Fnarg.com
Lets assume I have sex with a different woman each day, then that means I am so good, I can charge for it. Say, a thousand euro per bonk. That makes 5000 euro per evening. But because I instead posted on slashdot to comment on your post, I missed tonights income. You owe me 5000 euro.
Check is acceptable. Thank you.\
Anyone bothered to read the article when the second sentence of the summary starts the argument with "lets assume". Lets assume the moon is made of gold, why is NASA then not rich?
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
That assumes that software is fundamentally without value
More precisely, it assumes that the marginal cost of producing software is zero.
Dev loses $20. That is $20 that he doesn't have to spend on latte's. Keep piling up these "Net loss to economy = $0"'s and Dev will be out of a job. Eventually, the whole industry is no longer viable. Where are the jobs going to come from now?
The only way the industry will no longer be viable is if everyone (or some critical mass of people) pirate. Clearly, enough people are paying for software to make the current industry viable.
Second, if someone steals a latte, Starbucks has lost the marginal material and labor that went into producing that latte, which is a significant portion of its cost. If someone pirates software, the developer's lost marginal material and labor costs are effectively zero. (Of course, this means the up front costs of material and labor are spread over fewer units sold, and if everyone pirates, then the developer has no incentive to invest material and labor in the first place).
Your logic is fine as long as there is no difference between an economy based on selling lattes and an economy based on creative and highly skilled labor.
My impression is that my logic relies precisely on the difference between an economy based on selling tangible goods and one selling intangible goods.
The whole point is the difference in the marginal cost of a latte versus some piece of software. In both cases, if you steal, the producer has to swallow the marginal cost. But the marginal cost of much commercial software is zero.
Many software companies have a complex relationship with piracy. In some cases, the network effects of a certain amount of piracy can outweigh its costs. Or, to bring up a different point, to what extent does piracy drive the sale of large capacity storage devices, media writers, portable music players, high-speed internet subscriptions, etc.?
"Anyone who [rips a CD] is probably engaging in copyright infringement." - David O. Carson