I had an iOS product that was doing well, and it had some DRM to prevent jailbreakers.
I had a legitimate buyer complain and after soul-searching I removed the DRM.
Sales immediately dropped to near zero and never recovered.
So at least in my experience, piracy affected sales.
In my view we don't talk about product protection enough, and instead resort to dunking on DRM all the time. Instead of talking about DRM and how it is legitimately problematic I'd like to highlight that we can protect products without DRM and still sell them - it's why products have gone to online accounts for seemingly offline software.
Of course this can be broken, the same as DRM, but done right online features can become a core part of a software and make it so offline patches remove a significant enough amount of feature that it's not worth it.
It is sadly a natural order of things. In my experience when I was younger I legitimately could not have gotten into graphic design and learned enough about it without the big name products. The pricing for something like adobe has become so far outside of reason that people will pay for the crack rather than the subscription as an example.
Very interesting theory. My theory so far has been that it's been because:
1. Data mining/data accumulation/data reselling
2. For so many devs web is what they know, so they naturally think in those terms
3. You can release updates/new versions way, way faster if much of the app is on your server
4. Future flexibility
I definitely think your theory belongs on the list. I'm wondering how impactful that is. Could be pretty big.
I think they also realize that whilst geeks will kick up a stink about "DRM" when it's done client side, the exact same thing implemented by a firewall and server rules draws no attention. So it's seen as more socially respectable, although in reality of course, software+DRM gives much better privacy than a cloud service ever can.
In reality of course, lots of very rich companies make offline or mostly offline software. Microsoft, Oracle, SAP etc. But they're unfashionable.
All the date means is that when the iPhone platform had poorly implemented DRM, piracy rates could approach nearly 100% for some types of app. Since then Apple improved their DRM and nowadays iOS devs don't worry about piracy so much. Seems like a disproof of TechDirt's thesis.
> Overall,the analysis indicates that for films and TV-series current prices are higher than 80 per cent of the illegal downloaders and streamers are willing to pay. For books, music and games prices are at a level broadly corresponding to the willingness to pay of illegal downloaders and streamers.
It would be interesting to know to what degree price is a factor in app piracy.
The important thing even more so than what price would have inspired the 1000 to pay you is the 10,000 who didn't even consider your product and what price would have changed that decision.
I've also released software which was good enough that people wanted to pirate it. I think it's a lesson you don't have to learn once on your own: it's enough to hear other people's accounts.
What you are describing is aprox 500x the effect. Your hypothesis is fantastic let me propose some alternatives.
- The same release that removed the DRM also introduced changes in the application which you didn't regard as in any way negative but which turned off users.
- You introduced changes in your price structure to account for the rampant piracy you expected and killed your sales.
- You in some way offended people and they decided to stop buying from you.
- You serve a niche and either saturated that niche, the portion of the niche that was interested in your solution, or the portion of the second group your advertising was reaching and sales dropped off
- You have an exposure problem. You experienced a positive but not permanent bounce that only coincided incidentally with removal of DRM
- Other players entered the same space diluting your market
Any of the above are more reasonable than supposing that all your users are jailbreakers.
https://www.tivocommunity.com/threads/iphone-app-dvr-remote....
User has understandably negative feelings about piracy and retroactive explains his misfortune based on it.
It's pretty obvious that well implemented DRM works. If it didn't then it would have died out a long time ago. See how much effort the games console makers put in, despite it being a highly competitive market with extreme pricing pressure. Yet, they do compete on the quality of their DRM because game studies are responsive to it.
1 out of 250 iphones is jailbroken and can even install pirated apps directly. On balance which is more likely that piracy killed his app overnight or netflix, competitors, and cable co DVRs did?
The alternative is to have us believe that nearly all his prospective users were in the 0.4% and instantly heard it on the grape vine that his app was fair game "overnight" instead of buying a $3 remote app. Does that seem even slightly credible?
It makes a better narrative than I bet my livelihood on a excellent entrant to a market that became crowded then went away.
If you do a search restricted to the time frame his product died you will note there were multiple competitors including a mobile interface m.tivo.com launched.
I will say it certainly -felt- like removing the DRM was a mistake at the time, because the cliff was dramatic and immediate.
As others have pointed out this was a product in the 2009 era, and it did eventually get replaced by a first-party app from TiVo at which point I just shut it down.
But once it backfired and affected a single paying customer, I decided to change my course.