Just hours ago, Apple made an announcement that has developers everywhere dancing down their collective, metaphorical street: In-App Purchase is now good to go in free applications. This, of course, comes just months after Apple essentially told a room full of journalists that such ideas were nonsense – that free apps should always remain absolutely free.
Still – hindsight is always 50/50, or whatever that saying is. There were really just too many advantages to allowing it to let it pass by any longer. Freemium applications! Upselling! It made In-App Purchases seem less tacky to the user! Hurray. But there’s one major factor that isn’t quite so obvious; one issue that this, to some limited extent, solves: piracy.
Now, I’ve said it before, and I’ll say it again: none of us here, nor the vast majority of people reading this, are e-saints. When piracy becomes as convenient as it is today, damned near everyone pirates. Even as a developer who was raised around developers and hangs out primarily with developers, I don’t see piracy as a primary issue damning us all to a life of bread lines and soup kitchens.
That said, the statistics are quite depressing. In a post a few days ago, I mentioned that Beejive, a popular IM client for the iPhone, was seeing piracy rates as high as 80% amongst their user base. Many of the comments on that post suggested that if BeeJive was cheaper (It’s currently $9.99, but has gone for as much as $16.99 since launch), less people would pirate it. Unfortunately, that’s just not the case: we’ve talked to developers of applications pinned all across the pricing spectrum, and they’re all reporting the same 70-80% piracy rate.
Unfortunately (or fortunately, depending on where you stand), there has been no easy way to combat this. You can code your app to check for certain key indicators that the user is running a cracked version, but that leads to false positives, angry users, and is generally just incredibly flaky. You can try to encrypt/decrypt everything on the fly after positively confirming that the user is a valid one , but that destroys performance, drains battery life, and is.. well, it’s just absurdly friggin’ ugly. Oh, and both of these methods can still be cracked, with enough effort.
So where does In-App Purchase come into all of this? Here’s the trick: while you can crack an iPhone application and throw it up for all to download in a matter of seconds, you can’t fake an In-App purchase receipt. A pretty notable chunk of the In-App purchase process is actually handled on the developer’s server, in addition to Apple’s – so unlike the initial purchase (which devs actually get to know very, very little about), developers know pretty damn well exactly which iPhones should be running which In-App Purchase. Developers have a specific receipt for each in-app purchase, which resides on their server. Faking this would be like tricking Amazon into shipping you a TV that you didn’t pay for.
By utilizing this receipt, network-centric applications like IM applications can knock piracy rates down to trivial numbers by simply shifting their model: don’t sell the user the application, sell them the service. Give them a very, very basic version of the application out of the box for free – but if they want more functionality (in this example, that would be the full version of the IM app), they need to drop a few bucks before the server will allow them access that functionality. Once the logic for who does and does not get access is all moved server side, pirating an application becomes monumentally more difficult – you’ve either gotta figure out a way to exploit the server, or reverse engineer its workings, rebuild it, and point the client that way, instead.
With all that said, there’s a flaw in this idea: once you require server-side authentication, you’re requiring network connectivity. That’s not an issue for those apps that already require connectivity to be useful, such as IM clients and a number of other genres – but for single player games, it’s just not okay to demand the user to be online every time they play. Do that, and you’re bound to upset the very, very vocal anti-DRM crowd.
Oh well – at the very least, it’s a start. Your thoughts?
It’s also worth noting that, as far as I can tell, in-app purchase content hasn’t been cracked yet, even from the client-side of things. In other words, even in-app purchase content that *doesnt* connect to a server for any reason (suchs as levels in a video game) should be safe for the time being.
I wasn’t able to absolutely verify this, which is why I didn’t mention it in the article – plus, it’s almost inevitable that it will be cracked sooner or later, especially if there’s a rapid expansion of in-app purchase content.
+1 Good comment
Maybe there will be a monthly check, and whether or not the user has paid for the app, if not the application is disabled….
This is wha5t I think about in-app purchase and piracy: http://www.iphonedownloadblog.com/2009/10/16/in-app-purchase-kill-iphone-apps-piracy/
Basically, I don’t see how it will change anything.
New app store category also announced: “Top Kinda Free”
Is an app that is a free app for everything past a minimal amount of game pay still considered free in the app store rankings? Oh have no fear I am sure Apple in their infinite wisdom will work out a simple intuitive solution.
That said – this is a much needed change that will be welcomed by the dev community.
Good push in the right direction. I don’t think network access is much to ask from an iPhone/iPod user, especially given the requisite network access for the app store.
Uhm, how’s an iPod user supposed to have network access on the road? Are they just going to be locked out of the app while they’re away from a WiFi access point?
Once an in-app purchase is made there should be some kind of caching to cause the app to be upgraded, which should not require continuous network accessibility
Camera Zoom implements some kind of anti-piracy code. I’m trying to do the same with my app.
“…none of us here, nor the vast majority of people reading this, are e-saints.”
Pretty significant assumption, don’t you think? Does it make you feel better to insist that “damned near everyone” pirates?
No, I do not pirate software. I was a retail “shrink-wrapped” software developer once too, and I know all too well the frustration of people stealing my work.
Nor do I pirate apps. Don’t P2P music and movies. Don’t sneak around burning CDs and DVDs. Even “big ticket” items like Office and the Adobe Creative Suite on my systems are legit.
If I’m one of the few left who believe in paying for value received, then that’s pretty sad.
But I’m not so sure that’s the case, especially given the numbers of songs and apps Apple sells via iTunes. Somebody else other than me is buying billions of ‘em, and that’s for damn sure.
So give the “everyone’s doing it” meme a rest, will you?
Hell, it’s not even a good rationalization…
He didn’t say that the vast majority of people reading this are irredeemable pirates, just that they’re not e-saints. I think there is some grey area. What if you watched Family Guy on TV, thought it was hilarious so downloaded it the next day and watched it again, and then bought the DVD when it came out at the end of the season. You’ve broken the law – so you’re not a e-saint – but who has lost out here?
The sentence after “e-saints” reads, “When piracy becomes as convenient as it is today, damned near everyone pirates.”
Sorry, but that’s pretty damn unambiguous.
To answer your supposition. I’m a fan of the Showtime series Dexter, but not enough to spring for a premium cable subscription just for one show. Big fan in fact. But I didn’t download the shows during the series. No P2P.
And I bought the series when it came out on DVD. Didn’t like waiting, but I did.
The roots of pirarcy are entitlement, immediate gratification, and the lack of consequences.
Couldn’t agree more.
It used to be fun waiting for things to come out – films, albums, games.
Patience seems to be dripping out of society, which explains why the basic grammar skills are disappearing.
They are, I’m totally cereal!
So long as they are clear that they are “freemium” apps and not just free apps, AND EXPLICITLY tell you what you get for free and how much the premium part of the app costs I am ok with it. I don’t want to download an app just to find out its useless without paying for it.
Im not really sure how you pirate apps for the ipod, but I assume you just put them in your mobil apps folder. It kind of surprises me that apple doesn’t encrypt this folder and only let iTunes modify it with apps either from your ipod or that have been purchased from the itunes store in iTunes. Where else would you need to get apps from??
Jim
It’s a bit more complicated than that.
The apps are digitally signed with Apple’s App Store signature, which is all server sided. A cracker will strip the app of all of the iTunes metadata. And in order to sync it onto iTunes, one must simply install a Cydia package which patches the file which checks for iTunes app integrity.
You’re absolutely right, it IS too easy. Apple should really get their game on.
I think Polyghost is the first free-to-pay app.
http://bit.ly/2BUmRh
Very well written article covering in app purchases!
I couldn’t give a flying fuck about In-App Purchases, if they’re going to have a Category called “Free Apps” then let them be F-R-E-E.
my opinion on this is a little different. i have no problem with buying ‘content’ through a free app, for example songs for a music player app. i do however believe that the ‘premium’ version of a free app should listed as a separate app in the store. in other words i do not believe that apps should be marketed as free and than the user prompted to pay for full functionality. this one specific type of in app purchase is what apple should exclude in favor of a separate app listing in the store.
Hindsight is 20/20 – meaning perfect vision (of what happened) after the fact.
Heh, yeah. That line was sort of my own little way of jabbing at Apple’s tendency to flip-flop on issues after making their stance public. I suppose it doesn’t really make any sense out of context.
If Apple gives a reason why it sucks in the middle of a keynote or Q&A session, they’ll often support it within a year or so.
You’ve overlooked the fact that a huge number of approved free apps also had “paid versions”… So while this may be a good anti-piracy tactic (and I do like it on iPhone/App Store in a way that I would totally hate in a desktop app), I think there’s also a significant recognition here that they could “clean up” the store a hell of a lot by letting so many dual-version apps merge down to a single Freemium app.
Well that’s it – good game.
In 6 months all those fantastic metrics will show a significant drop in Application usage that are not free. The appeal to iPhone was free apps – period. The percent of people that actually buy apps is small so you can only squeeze a lemon so much.
I’d rather just pay a larger fee upfront then deal with this crap. You don’t seem RIM having piracy issues.
By “I’d rather just pay a larger fee upfront…”, I assume you mean a subscription fee of some sort. For ex., pay $20 per month for unlimited apps. The problem with a recurring subscription fee is how to divy it up among the app developers.
Geaux Tigers!
“not okay to demand the user to be online every time they play…”
is their some kind of local keychain that can be utilized for offline authorization?
does Blackberry allow in app purchase?
Does this mean that we will see app subscriptions introduced or will this purely be for purchases? I can see EA supporting this with their online portfolio! You want the latest football shirt, there’s a price for that…
Interesting thought as far as charging to access news sites is concerned. Wonder if Rupert Murdoch already has an app for that?
The web was flooded today with stories of how this means the death of “lite” apps and the beginning of a real freemium model for iPhone developers, there’s one really key thing missing still that skunks the whole thing, as far as I’m concerned:
Reviews.
Once upon a time you had to buy a paid app in order to review it, while free apps could be reviewed by anyone who installed them. Now people who download the free version and don’t like it — maybe because they don’t want to pay for the upgraded features — can give the app a negative review. Right now the only way that paid apps manage to get decent reviews (if they’re any good) is that payment barrier. How’s this going to work?
Apple can’t keep people from reviewing if they haven’t made an in-app purchase because plenty of such apps will be things like magazine browsers, for example, where you can read some magazines for free and pay to download others. Someone who never buys an in-app mag should still be able to review it.
Unless there’s something Apple hasn’t told us, this is no panacea, and I’m not even sure it’s better for most business models.
How can anyone even favor BeeJive over IM+ ?
/offtopic
We launched iFax Pro a few days ago. (http://bit.ly/2S86PU)
It just $0.99 and the first $0.99 in-app purchased fax is free, effectively bringing the cost of the app to FREE.
So far the results have been tremendous and iFax Pro has, within 24 hours, jumped to the top 30 Paid Business Apps in the US (and top 3 in other countries such as Greece :) )
We do believe, however, that the FREE app segment is generally perceived as second rate, especially in the Business category. That being the case, our approach may be more effective in the long run.
Any thoughts?
Thoughts:
It depends on functionality. I look at the features of fee apps and compare them to the free apps. If I can accept the loss of features, I go with the free app. I have mostly free apps because the feature set of paid apps simply is not that compelling. (I haven’t looked at your product.)
D
I’m not entirely sure that I would be out of line to suggest that a significant portion of piracy could come from downloaded packs of apps. You mentioned the level of convenience involved in acquiring things illegally. Finding something in the app store to buy is enough of a pain in the ass. If you’re looking for something in the app store to deliberately pirate … it just seems like after you’ve found the app, you’re just going way out of your way at that point.
For the release groups that crack applications, acquire prerelease music and films… it’s all about the game. The challenge of doing it and the desire to do it first. So they’re always going to find a way.
The end user comes from a slightly more murky perception. Look at music. It started off as go to the store, spend twenty dollars, come home and spend however long encoding it… or you could download it for free in half the time it would take for that whole process.
The pay services come out… download it for free, get higher quality, don’t worry about DRM breaking it when you put it on your ancient Creative whatever the hell MP3 player or burn it to a CD.
PC games … why buy a legal copy of a game when the DRM has a high probability of keeping the game from working as well as interfering with all kinds of other stuff on your system?
The control mechanisms hurt the people that legitimately purchase something, while the people who don’t have a trouble-free way around them. This will be cracked or circumvented just like everything else always is. Just because it can be.
The biggest problem that this creates is in trying to determine what is and what is not a free app.
I think the in-app purchases is a great idea but I have to call bull crap on the 70-80% pirate numbers. There is what, close to 40+ million US devices? and your telling me 70-80% of them have jailbroken and gotten apps illegally? It just doesn’t seem likely. In the small research I did supposedly 4 million people have a jailbroken devices. Not everyone of these people pirate apps but even at those statistics that’s a mere 10% of the iphone population. I can’t assume all 40 million buy apps either but I have a hard time believing that a majority of the users end up accounting for 80% pirate rates with only 20% paying customers.
I guess I’ll find out for sure as I’m launching an app later this year.
I wanted to add that if these statistics are right about pirate rates does anyone think that 80% of those people are going to turn into real conversions if they have no desire of paying for the apps to begin with?
No – no one is saying that that 80% of iPhones contain pirated software. That number stems from piracy rates on an app-by-app basis: for every 10 users that an application sees, 8 of them appear to be using a pirated copy.
Totally different things.
I’m calling B.S. Of the 200 people or so I know with an iPhone (all in my school of engineers), I am one of maybe 5 that has jailbreaked and only to get a software unlock. Not one of us jailbreakers have ever stolen an app – not worth the trouble when it’s $1 or maybe $5. There’s no way it is 8/10 of users of an application are pirating. Not when more than 90% of iPhones are not jailbroken.
Greg based on your numbers 2 users purchase the app while 8 users pirate it. Does that mean pirates are just downloading more apps than 90% of the non-jailbroken communities? I just find it a bit hard to believe because there is only roughly 4 million jailbroken phones and the number gets smaller for those who actually steal apps. If that’s the case then these people must be downloading apps like crazy to outpace paid apps.
The numbers just don’t jive in my head I guess. I’ll be sure to let you know how my app does and what kind of rates I see.
Many people get pirated versions of apps or music tracks just for the sake of collecting them. I know quite a few collectors who would never have spent 1% of the total cost of their collection had they been unable to obtain illegal copies.
Collectors skew the piracy numbers. The real question is: how many pirates would have paid for the apps if cracked copy were unavailable. The answer is a tiny percentage of the number of pirates.
It reminds me of Microsoft and other software companies saying that they are loosing billions a year because of piracy, assuming that every single pirate out there would have purchased a full price version of the app if piracy didn’t exist.
This is exactly right, and not enough people take this logical step. You can’t lose something you never had for one. For two, a great number of the people who download illegal MP3s or cracked software never would have spent any money in the first place. If it’s free… hey why not. But I’m not giving Will.I.am my $15.99 no matter what I see Fergie do.
I really don’t see how a TV shipped from amazon metaphor can be used. Since were discussing digital purchases, it will always be possible to make a duplicate of that purchase. It’s just only a matter of time before someone figures out how to install that “duplicate” onto the Iphone while bypassing security. On the other hand, maybe I’m just missing something…
It’d be pretty awesome if one of these articles described what in-app purchasing actually means rather than just the implications.
I can’t really say that piracy should just be ignored because pirates will just never buy your products.
The ease of obtaining pirated products will encourage more people to take that path, instead of the legal path. One negative effect is “It makes people lazy, and makes them more consumptive”
Yes, they might not be interested to buy your products. But, they might be “willing” to spare some money, if the desire and motivation is good enough to obtain your product, while the illegal path is too hard or exhaustive to do.
Of course we can’t say that Microsoft lose billions of dollars, because of pirated copies. But, they’re losing the potential to gain more revenues that they might have if pirated copies don’t exist.
If your product is a best selling product and very good, you should not ignore piracy. But, if your product is something that people really don’t care, to be pirated or not won’t change a thing.
I would like to add something.
Pirates are not lazy, I would say they’re working hard enough (no matter what value in it) to be able to break protection in digital products.
But, if they’re starting to redistribute those copies illegally. That what makes people lazy, and it makes people spoiled, because of “how easy it’s” to obtain great stuff for free.
The end result is, nobody will buy your product if your product is not better than those pirated products that are widespread and available illegally.