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Why is there no black market for iPad apps?

If you own one, turn on your iPad or iPhone and open up iTunes. How many of the songs did you buy yourself, and how many did you download illegally or rip from a friend’s CD? 10 per cent? 20 per cent? 50? After your pangs of guilt have subsided, go and have a look at your list of apps. I already know how many of those you pirated – precisely none.

Hardly a week goes by without a damning new report on effects of piracy of the music, film, and game industries. The IFPI has just told us that global music sales fell by a third in the past seven years, with the modest increases in digital music sales failing to fill the gap. Once again, pirates (rather than, say, the recession or changing tastes) are singled out as culprits, with the dark prediction that if nothing is done, then 1.2 million “creative industry” jobs in Europe alone could be lost.

A couple of days later, Apple triumphantly thanked the world for downloading 10 billion apps for the iPhone, iPod, and iPad – that’s over 60 apps for every single iOS device out there. No doubt many of those 10 billion were free apps, but neither Apple nor its thousands of developers will be complaining about the billions in revenues they’re pulling in.

So, what’s happening? Have Apple, the world’s greatest inventors, figured out a way of stopping piracy? And if they haven’t, why is Apple still flourishing?


No matter how young or old they are, most people I know have a passing knowledge of how to find pirated content, whether that’s simply by searching YouTube for old TV shows, or by downloading eBooks and games from websites or torrents.

Yet there’s one curious exception to this: no one seems to know how to pirate apps for the iPhone or iPad. It’s not because it’s impossible, or even because it’s difficult – it only takes a few minutes to “jailbreak” your iPhone and set everything up. In fact, I’d rate it as being about the same difficult as downloading movies or TV shows.

There are just two simple reasons why app piracy isn’t common:

1. Most apps are incredibly cheap
2. Buying an app takes about 5 seconds

It’s not because Apple or its developers are sending armies of lawyers around the world chasing down pirates, or because governments have threatened to cut off pirates’ internet connections; it’s because people just can’t be bothered. Most users recognise that an app like TuneIn Radio, which gives iPhones and iPads the features of a £100+ DAB radio, is an astonishingly good bargain at 59p.

But why are apps so cheap in the first place? Part of the answer lies in the sheer number of developers who create apps; when there’s so much competition, prices are bound to get forced down. There are also far lower costs involved in the production and distribution of apps; all a budding developer needs is an £867 Apple laptop and a $99 annual developer fee. Everything else is essentially free, from programming lessons to development tools.

Of course, you can’t count a developer’s time as free, but when a 14-year-old boy can create a game that’s downloaded by millions, it’s clear that bedroom programmers really do have the opportunity to succeed on the iPhone. Even the most frugal independent band would be hard pressed to spend less than £1000 on instruments and equipment if they wanted to make a hit single.

Apple is now the beneficiary of an extremely profitable virtuous circle: the more devices they sell, the more developers will flock to their banner – and the more apps that are made, the more popular their devices will become. They’ve sold over 160 million iOS devices in a mere four years, and the rate is only accelerating.

So, when there are hundreds of good games for sale for 59p, it’s difficult for developers to convince people to pay much more – and if you multiply 59p by hundreds of thousands or millions of sales, then you can still do very well. In fact, I’m certain that apps would cost even less if Apple hadn’t set a minimum at 59p.

That said, piracy isn’t non-existent on the iPhone and iPad. In most countries, fewer than 10 per cent of iPhones have been ‘jailbroken’, a pre-requisite for piracy; only China, Russian and Brazil have rates about 20 per cent, and the most lucrative markets in the US and Europe hover around 5 per cent.

Clearly developers would prefer it if there was no piracy at all, but most aren’t particularly worried by the few pirates that are out there. Jey Biddulph, creator of Flip It! Gyro, an iPhone game, and Infinote, a note-taking utility for the iPad, told me that Flip It! was pirated around a month after its release. “Looking at analytics, I can see that it was downloaded over 20,000 times within a couple of days of release. Since then I’m sure it’s been downloaded many thousands of times more. These figures come from comparing the number of new devices which use the game to the number of sales.”

Is he concerned about the piracy? “Well, I’m a realistic person. I don’t believe the majority of these people would have paid for the game if they couldn’t get it for free.” As an experiment, Jey recently made Flip It! free over a weekend, resulting in 100,000 downloads. He explains: “This may be a little controversial, but as an independent developer, nothing is more true than any coverage is good coverage. Visibility is the biggest barrier in the app store and when a version of your app is pirated, sites cover it, people retweet it and those who pirate it show it to others who may become legitimate purchasers.”

In any case, some of the most profitable iPhone apps *are* effectively unpiratable, because they make their money through “in-app purchases”. These apps (usually games) are typically free to download but require users to pay for extra levels or features, just like Farmville or Cafe Society on Facebook, and can easily rack up hundreds of dollars of charges if used by unsuspecting children.


By lowering the cost of entry for developers and fashioning a smooth payment process, Apple have made piracy on the iPhone, iPod, and iPad practically irrelevant. They’ll never be able to stamp it out completely – pirates are too determined and smart for that – but it won’t stop them from making billions in profit every quarter. It’s a strategy that other creative industries would do well to copy.

Filed in: Technology News

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