App Piracy


Let me clear things up a bit. I AM NOT PRO PIRACY.

I have touched on this before, in The Truth About Software Piracy and more recently, Are applications making us dumb?

Look. Africans Do Not Pay For Software. In Any Medium.

Africans don’t pay for apps. We crack them. Even the wealthiest of app users won’t pay for an app when he or she can get it for free.

This is why it has been reported that 83% of software in East and Southern Africa is pirated. This includes corporate accounts with spending power.

While developers speculate on the viability of monetizing apps, VAS Content Providers and Mobile Networks and their partners are earning thousands of dollars from USSD and SMS based content services such as ring tones, marketing promos,raffles, edutainment and NGO initiatives.

This is where the money is.

Forget the iPad/iPhone and Android apps.

Even in the projected 5-10 years, user retention is low, competition is too stiff from international apps who are better capitalized,more established, who’s end game on tech projects are built around sound business, very different from the tunnel vision that most dev. projects seem to be, purely tech without considering the whole concept as a business with an exit strategy.

But the simplest reason is that people won’t buy it when they can get similar value for free.

My perspective is based on statistics on software usage, on whatever medium, in east and southern Africa. It has been reported by that 83% of software in this region is pirated.

This is on the PC platform, with way more security checks and sound business models than the fledgling mobile markets.

After several years and several counts of winners of global and regional application and software development awards in East Africa, we are yet to see an impactful and properly monetized software in the region. If you know of any, kindly tell me of them.

On the basis of this peculiar financial and behavioral history of Africa’s spending and software usage habits, why do we expect people to spontaneously begin paying for mobile applications? Whoever thinks this is possible must be counting on primitive energy.

A clearer example: No sooner had Miguna Miguna’s politically explosive book, Peeling Back the Mask been released, than the same had been forwarded to every Kenyan email address and hosted on every download portal on the internet. I guarantee you that no other book in Kenya’s history reached the eyes of its readers sooner than this one.This is how Kenyans treated an alleged  “whistleblower”. How much more shall they respect your app that tells them what time their bus will arrive?

MONETIZATION

You can make NGO’s, the World Bank, USAID, UN, pay for the app. You might (with a  little insider help, ) make a government pay for the app. But it is easier to have a lion live through ransacking a Masaai herdsman’s cattle pen than making an end user pay for an app.

The key thing here, I believe, is if you truly want to monetize your concept,it will be about who pays for the app.

I have glanced at some discussions on piracy, and specialists posit that in the next five to ten years, we will be a strong app market.

Flash forward ten years, Smart phones are commonplace, accessible, and affordable, Africa is developing, Vision 2030, blah blah…which means the app market will no longer be a small niche market but a mass market.

The small chance that this market will be profitable is based on the following dependencies:

  1. The software is unhackable
  2. The networks receive half of the revenue.
  3. Payments are favourable: The cost is low, or the consumer pays indirectly, or in small bits long term.
  4. The platform has lock in. (For one thing, unless the Samsung App store and the Android market place aka Google Play store is as “watertight” and controlled as the Apple store, there is little chance that any app business will monetize in Africa, its difficult to achieve high margins due to the several layers of service provider mouths to feed)

My Conclusion

In my view, local application developers will be like the music industry,where global management and production companies like Universal and Sony have the platforms, means and structures to take on the long term capital costs, while the local app developer will have little revenues and limited rights to his application.

As such its my view that international platform owners, the Nokias, Blackberries,Apples, Samsungs, Microsofts of this world stand to gain from this market. Not forgetting the Chinese.

Ok, I’ll just leave this here….

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2 thoughts on “App Piracy

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