Android application piracy is a real problem in the mobile app industry, but developers do have options to minimize its impact on their monetization strategies. And in most instances, it does not involve closing the Android development door for good--if at all.
Piracy exists on all mobile platforms, but it's greatest on Google's (NASDAQ:GOOG) Android, according to Josh Martin, director of apps research in the global wireless practice at Strategy Analytics. "And games will be No. 1 in piracy for a while, because of their popularity."
Source: Yankee Group, 2011 US Consumer Survey
The level of piracy has a lot to do with Android's "Wild West, open environment, where quite frankly, nobody cares if nobody gets paid," said Carl Howe, vice president of research and data sciences for Yankee Group. A September, 2011 Yankee Group report on Android piracy surveyed 75 developers in 22 countries and found Android pirating was considered "very easy." At the high end, 16 percent of developers felt more than 70 percent of their users were running pirated versions.
Piracy rates are jumping
Howe says he has seen piracy ratios as high as 90:1 and 100:1 in some Asian countries. "It all comes down to how many protections you went through to make sure it wasn't pirated; how popular the content is; and how valuable the customer sees it to be."
He lays some of the blame on Google but feels the company took the right steps in creating a better-branded content delivery service with Google Play. The company's recently announced changes to its Play storefront developer program aimed at one form of piracy--knock off or copycat apps--should help eliminate it completely.
In April, Rovio Mobile issued an alert about fake, pirated versions of Angry Birds Space.
At the same time, developers need to understand their level of piracy and how they're being impacted. For example, developer Chris Pruett of Robot Invader posted to Twitter that as a paid app on iOS, the piracy rate of 3D action game Wind-up Knight was close to 80 percent. Nearly 100 percent of those users were from China, where they can't make purchases on Android. He sees piracy as a distraction because most of the people who install pirated software are not going to purchase an app anyway. But piracy becomes a big problem when it affects the developer in other ways, such as hogging network bandwidth and impacting server costs.
Strategies for preventing piracy
The No. 1 strategy for combatting piracy is developer education and awareness. Many developers aren't taking the time to understand the options available in the Android development platform. "As a developer you should take responsibility for knowing what's out there to protect your apps. People are all up in arms on how the open Android system breeds piracy but in reality if you implement some of the things that they currently have, you can mitigate the rest," contends Matthew Powers, CTO and lead Android developer for Applico. However, Powers does admit much of what Android offers in the way of piracy protection is buried in the documentation. He lists copy protection, code obfuscation and Google Play Licensing as three areas developers should be aware of and implementing, if applicable to their circumstances.
The early version of copy protection wasn't popular with developers because it doubled the size of .apk files. As a solution it "wasn't very good, which Google admitted," said Mike DeLaet, vice president of global sales and marketing at Glu Mobile. Nonetheless, the Yankee Group found that 52 percent of developers were using copy protection in their apps.
For code obfuscation, the Android ProGuard tool shrinks, optimizes and obfuscates application code, resulting in a smaller sized .apk file that is trickier to reverse engineer. "It comes down to how much work it takes to hack something," said David Richardson, lead developer of the Lookout Android mobile product. "If it's too much work, a hacker isn't going to want to bother."
Source: Yankee Group, 2011 US Consumer Survey
The Google licensing service and License Verification Library (LVL), which determines if the downloaded application came from a valid Google Play account should also be part of developers' toolkit in checking for pirated apps. Furthermore, with the Jelly Bean Android OS release, all paid apps will be encrypted. "If [the app] gets leaked, a hacker would need the device key to use it," Richardson said. "So it raises the barrier for someone to distribute an app they purchased."
Jelly Bean's immediate impact will be limited due to penetration realities. But once it reaches critical mass, it could be an effective anti-piracy tool if developers target apps to Android 4.1 and above, according to Richardson.
Using freemium, updates to prevent piracy
However, using these tools isn't a sure-fire way to prevent piracy. Developers who need an immediate solution should consider changing their monetization business model. Madfinger Games went this route in re-launching its game, Dead Trigger, as a free app.
Glu Mobile reports its overall piracy rate is around 2 percent using a freemium business model and smart design. It reduces piracy by doing constant updates of its titles. If hackers need to repeatedly hack the title to obtain new content, they will lose interest says DeLaet. Glu also doesn't rely on in-app purchases alone to generate revenue. "With no way to earn currency, they may be inclined to hack the game. We give them alternative ways to earn currency."
The shift from licensed-paid IP to a freemium original-IP model has proven successful for Glu. It reported second quarter smartphone revenue of approximately $19.9 million. Even more startling is that 2 percent of its users are generating the majority of that revenue.
Finally, Android detractors might suggest abandoning the market entirely as a third piracy option, but there appears to be little support for that strategy. Mika Mobile used a cost-benefit analysis to decide if the company was generating enough revenue for the time it was spending working on Android. The lack of sufficient revenue, not piracy, prompted them to leave the platform. Similarly, ChAIR Entertainment decided not to port its Infinity Blade series to Android, albeit over piracy concerns, though it isn't clear if the company has abandoned the OS completely.
Piracy may never disappear completely. On mobile devices, privacy is most prevalent in mobile games but could spread to other applications that have high average selling prices, suggests Strategy Analytics' Martin. Developers need to plan ahead and be diligent in implementing anti-piracy strategies otherwise they may risk being pirated. As long as it's easy, somebody is going to try to get it for free.