App Piracy and Mobile Payments: Make them Pay!

Piracy and Content theft (as perceived by various industries and their regulating bodies) is on the top of everyone’s mind nowadays. While there is a major drive towards internet content delivery, a vast majority of the population isn’t online just yet or even if they are, don’t have access to a lot of content. Could this be due to licensing issues, available bandwidth, region restriction or something else?

The most accessible way to get online, arguably, is via a mobile device: be it a Tablet or a Smartphone (or even a not-so-smart-phone). Applications on these devices act as both a conduit to content and as the content themselves (games would be one example where the App IS the content). So would piracy and content theft apply to these mobile platforms too? I guess so. Has anyone come up with a way to lock this down? Valve has tried that on their Steam platform (other game publishers have tried this too), with DRM, online availability requirements to play their games, etc. All of this wouldn’t work of course, if you couldn’t pay for the game. If content isn’t available at your location, even if you were willing to pay for it, what would you do? The usual answer would be that you would get it, by what ever means. This is probably why the Game of Thrones series is the most pirated show in the history of television shows.

How does this apply to apps? Think about the number of sites that give access to versions of paid apps. Think about the Cydia repositories that provide these packages.There are two parts to reducing the number of apps that are downloaded illegally:

  1. Making people aware of the actual value of what they are providing (I usually tell people who are hesitant about buying apps that it’s just the cost of a coffee at any coffee shop). People would be more willing to pay for apps if they can put the expenditure into a normal context (Paying INR 100 or $1.99 for a coffee, a one time purchase, vs the same for an app that you would potentially use multiple times).
  2. Providing an easy way to pay for these apps.

The payment method is something that needs attention. Various payment methods exist and are in use by various companies and providers. But most require a Credit Card as your payment method. This is partially motivated by safety. But what about gift cards, the way Apple does it. Buy a card for a pre-defined sum at a store and use it with your iTunes account. Paypal could be another payment method, except you need a credit card there too, as Paypal doesn’t accept most (Indian) debit cards (at least, not that I’m aware of). It can’t be a pre-defined credit card as is issued in some countries either: the system has to work everywhere.

So what do most smartphones and tablets have in common? The mobile networks that they run on. Mobile payments would make sense then right? As a post paid subscriber, you would be used to paying for usage charges beyond your free use limits. As a Pay As You Go (or pre-paid in India) subscriber, you would be used to adding credit to your account as required. Adding your app purchases to your bill would make sense then. But why isn’t it so prevalent?

Update: An interesting take away from the Nokia Strategy Summit, which Vinu is attending today, is that Operator billing is actually one of the best way to get going on app and content payment. This is a frictionless method to allow users to purchase apps from App stores and have the amount billed to their monthly bill or deducted from their pre-paid balance. No credit card, debit cards required. According to Shiv (D. Shivakumar from Nokia India), operator billing has to potential to increase purchases by up to 5 times, and two thirds of people prefer Operator Billing as a payment option on the Nokia Store.

If people pay for apps instead of getting them through alternate channels, the Application developers benefit, allowing them improve their existing Apps and coming up with the next great App.

Here’s a list of platforms that provide carrier billing (and their limitations, by region, or by type of content)
Table: OS vs Carrier Billing, number of countries and operators (if available)



Windows Phone7(USA, Australia, Canada, France, Germany, Norway, UK)
Android3 (Japan, USA, India)

Note: The number doesn’t reflect the number of carriers from each country that offers the service.

Disclaimer: The data in the table may need correction/updating. Do let us know if you have additional data.

So what does this mean for Apps and Piracy of apps? Well, people will pay, if you give them a means of paying it that doesn’t involve jumping through hoops. Make it easy, and it doesn’t get easier than carrier billing. You can even get Facebook Credits via Carrier Billing now!

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Raghu Kannan

Drummer, Car enthusiast and wanna be rally driver, between jobs and loving it! @raghukannan

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