Piracy in the App Store (from 360iDev)
A Brief Overview:
A few months after the launch of the App Store, developers began reporting unexplained spikes in their new user numbers, spikes that were completely irreconcilable with iTunes Connect reporting on new downloads. After investigating, it unfortunately became clear that this wasn’t an error in our reporting, but instead was due to application piracy.
To help developers better understand their traffic (and to cut down on customer support requests!), Pinch Media introduced jailbroken phone and pirated application detection to our analytics library and reports this June. We wanted to get developers a better handle on where their users were coming from, as well as some insights into the costs of piracy – both in terms of lost sales and in infrastructure costs, since many applications have a server back-end.
Interestingly, piracy is negatively correlated with per capita national GDP.
Just over 60% of paid apps using Pinch have been pirated. This estimate is also low, since application pirates occasionally disable our tracking. When an application is pirated, an average of 34% of all installs are cracked — in other words, about half of legitimate paid downloads.
Typically, pirated applications see a significant increase in usage immediately after the application is cracked and distributed, followed by 2-3 weeks of comparatively high but decline activity and culminating in low but significant piracy over the lifetime of the application.
Pirated applications are used less frequently, less intensely, and for a shorter overall length of time than purchased applications. For instance, the retention rate for pirated installs follows the same overall pattern as the retention rate for legitimate purchases, but drop-off is significantly higher.
Frequency and duration of use follow similar patterns, with pirate usage lagging legitimate usage.
We suspect application pirates use applications less for a few reasons. First, because a purchase has not been made, pirates are less qualified – their attachment to the application is much more tenuous. Second, pirates often install applications in bulk – and with more applications to choose from, pirates spend less time in any. Third, all jailbroken phones (whether the application is pirated or not) suffer from increased application crash rates, which may result in more-frequent uninstalls.
All of our stats point to a common conclusion: pirates stick around less than an average user.
Try Before you Buy?
Many pirates argue that their piracy is legitimate, because it allows them to ‘try before they buy’ and therefore ensure they’re receiving good value for money. To test this, we first set a baseline for typical conversion rates by looking at several dozen ‘lite’ to paid application pairs. ‘Lite’ applications are relatively common in the App Store, and by giving the user a sample of the paid application experience also provide an opportunity to try before buying. The average “lite” to paid conversion is approximately 7.4%. In other words, about 1 in 14 people who try a free ‘lite’ application go on to purchase the paid version.
If application pirates are purchasing applications in order to try before they buy, we would expect to see a similar conversion ratio. In fact, pirated-to-legitimate conversions are approximately 0.43%. About 1 in 233 installations of a pirated application eventually become a legitimate purchase.
Last Word
This post was adapted from a recent 360iDev presentation. Look forward to more of the insights we shared at the conference in our upcoming posts, by subscribing to our RSS feed and following us on Twitter. If you’re an app developer and are interested in tracking your own user statistics, you can sign up with Pinch Analytics for free.
- Greg Yardley
