How piracy ruins it for paid apps (Inside Apps)

The issue of pirates ripping off paid apps and reselling them is a surprisingly common problem in the Android marketplace.

Roger Cheng Former Executive Editor / Head of News
Roger Cheng (he/him/his) was the executive editor in charge of CNET News, managing everything from daily breaking news to in-depth investigative packages. Prior to this, he was on the telecommunications beat and wrote for Dow Jones Newswires and The Wall Street Journal for nearly a decade and got his start writing and laying out pages at a local paper in Southern California. He's a devoted Trojan alum and thinks sleep is the perfect -- if unattainable -- hobby for a parent.
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  • SABEW Best in Business 2011 Award for Breaking News Coverage, Eddie Award in 2020 for 5G coverage, runner-up National Arts & Entertainment Journalism Award for culture analysis.
Roger Cheng
3 min read

Mounting piracy is the dirty little secret in the world of mobile applications.

The Android market is facing a growing problem in app piracy.

Piracy isn't talked about a lot, but it has quietly grown into a major problem for many developers. It's more of an issue in Android because its open nature and loose authentication tools allow pirates to rip off and distribute paid apps.

"This is one of those problems that seem to have been running under the radar," said Carl Howe, an analyst at Yankee Group. "Every developer thinks, 'it must just be me.'"

Developers, you're not alone. A recent survey conducted by Yankee Group and location-based services and software provider Skyhook found that 27 percent of developers believe piracy in Android is a huge problem, with more than three-quarters saying that it's easy to copy and republish an Android application. Many point to pirate forums as the largest source of pirated apps.

The problem is actually causing a shift in business models. Instead of a one-off payment for an app, many are looking to give away their programs and make revenue through in-app purchases or advertisements. But for now, it's one of the primary reasons why the market for Android applications, which is expected to overtake Apple's App Store this year, doesn't yield anywhere near as much revenue.

"App piracy is extremely prevalent in the mobile phone industry, so we took an approach that circumvents it entirely," said Gary Gattis, chief executive of SpaceTime Studios.

Yankee Group and Skyhook

Pirating an Android app is a simple matter of downloading a legitimate copy, breaking down its code, copying everything except the authentication portion, and posting it on another app store. Some pirated apps are put together in a bundle of programs sold to consumers at a discount. Because Android allows phones to download apps from any app store or site, savvy users can easily grab these apps. Many customers aren't even aware they are pirated apps.

Piracy hurts developers in several different ways. Most obvious is in the loss of sales for developers who rely on people making an upfront purchase for the program. But developers say they also must take on the burden of customer complaint and support costs when a customer's pirated app doesn't work. Because they think it was obtained legally, the customer will naturally go back to the developer to fix the problem.

Howe said developers have said that for every one app they sell, they get 100 questions from people who obtained a pirated version.

If the developer doesn't address the problem, he risks hurting his brand both for that app and for future projects.

Google, meanwhile, isn't doing enough to fight piracy, according to respondents. The survey found that 54 percent of developers thought Google was too lax on its app market policies. Developers have said they have asked Google for help, but have been disappointed with the results.

Google wasn't available to comment on the issue.

The problem is not all Android. When Anders Brownworth worked for an app development startup, he noticed that one his iPhone apps, which was designed to look at account balances, saw a huge spike in usage one day. He estimated that the number of users with a pirated copy of his app was 10 times the legitimate installed base.

Because his app relied on communication to a central database in Brownworth's office, he was able to shut off access to the pirated apps, essentially making them useless.

"It didn't hit us in the pocketbook," he said.

Brownworth said he recommended that all apps have some backend communication for situations like these, although he acknowledged it may not be practical for developers.

While pirates attacked his iPhone app, he said the process is even simpler on the Android side.

"It's exceedingly easy to pirate an Android app," he said.

So what can Google do to prevent further piracy? Howe said that the search giant should mandate a certification and badge program for markets, which gives them the authority to enforce transactions and provide a hurdle for pirates with unauthorized apps.

Google could also provide payment receipts that can be verified online, as well as build-in code that deters tampering in apps, which would make it harder for pirates to rip out and alter codes to make the programs free. While these are not hard countermeasures against piracy, they do throw up some roadblocks.

"None of these steps will significantly reduce developer freedom, but they will at least make piracy a little more difficult than copying and pasting code," Howe said.