Recently, VideoAge came across a story in Reuters, which discussed the prevalence of unauthorized mobile apps (on that famous “second screen”) and its effect on the entertainment industry.  VideoAge editors found this trend particularly interesting after having just worked on an in-depth report for the upcoming MIP-TV issue on the second screen.

According to Reuters: “Hollywood studios, which for years have waged a war against online piracy, are now going after so-called ‘rogue’ mobile apps that use images from movies and television shows without their permission.”

The Reuters story points to a recent case in which Warner Bros. sent Google a “take down” notice demanding that the Internet giant remove from its app store “Hobbit 3D Wallpaper HD,” a mobile app that uses unauthorized images of the Oscar-nominated film. (Google removed the app within days.)

Upwards of 90 percent of apps based on a movie are infringing on a copyright or trademark, said Reggie Pierce, CEO of IP Lasso, a company that helps brand owners manage their intellectual property across the mobile app marketplace. The average movie has 1-3 official apps, and depending on the movie, dozens of apps by unlicensed developers, he said.

IP Lasso’s AppGuard helps content owners monitor mobile apps. (Some companies do this in-house, but that’s much less cost effective, Pierce said). IP Lasso’s clients are movie studios, TV companies, and members of the music and transportation industries.

Unauthorized photos, videos and logos are most prevalent in apps surrounding youth-oriented brands like the Twilight film series. Pierce also said that, in general, they see fewer unauthorized apps in the Apple store than in Google Play store, because Apple apps must go through a one-week approval process before they are made available.

Pierce said he encourages clients to work with the developers rather than immediately rush to legal action when they find an unapproved app, but he says that in most cases, a bad app is taken down in three to five days.

The high rate of copyright and trademark infringement amongst mobile apps is a downside to the “second screen” world that we live in.

And there are several risks involved. “Our main concern involves the privacy issue,” said Pierce. “Many of these free apps are collecting private information from those who download them. In fact, we believe that the rise in text spam people are seeing is a result of these types of unauthorized apps that collect private information. Many of the apps are free. .. at the cost of your privacy.”

The other potential downside — which effects the brand owners more directly — is loss of revenue. “It’s estimated that free apps account for 10-20 cents per download based on ad revenue. When you consider that many of these apps are downloaded 300,000 times, that can represent a significant amount of lost revenue,” Pierce said.

The U.S.’s Federal Trade Commissioned released a report in December stating that app developers need to do more to disclose where private information is going, especially when it comes to kids’ apps. “The FTC is moving in the right direction, but there’s still more that can be done,” said Pierce.

And, Pierce added, consumers shouldn’t just assume that if they see an app in the Google Play or Apple stores that it’s licensed or legit — because it very well may not be.

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