Apple Blames High Australian Markups for Digital Content on Media Rights Holders

[MacRumors]

At an Australian Parliament inquiry into high markups on technology goods and services today, Apple Australia Vice President Tony King blamed rights holders for international price disparities in the company's digital content, according to The Sydney Morning Herald.

"The pricing of this digital content is based on the wholesale prices which are set through negotiated contracts with the record labels, movie studios and TV networks," said Mr King, who is Apple's vice president for Australia, New Zealand and South Asia.

King went on to say that "the content industry still runs with perhaps old-fashioned notions of country borders or territories or markets" and that it creates confusion for customers. He also said that Apple's iTunes pricing in Australia is "comparable to other Australian physical and online stores."

When asked by Labor MP Ed Husic, who is a member of the committee conducting the inquiry, whether Apple could influence the price of digital content in Australia, King said that it was up to the rights holders. King also said that Apple would love to see "cheaper, lower prices in the Australian market," according to News.com.au.

Earlier today, MacStories noted that markups in Australia average as much as 61.4% for music, 33.5% for movies and 25.9% for TV shows when a subset of content offerings is compared to prices in the United States once Australia's Goods and Services Tax (GST) has been accounted for. Markups for Apple's hardware products are more reasonable, with Mac, iPad and iPod prices in Australia generally falling within 10% of U.S. prices. The iPhone line, however, can go as high as a 16% markup for the iPhone 5 and 4S, while the iPhone 4 is actually slightly cheaper in Australia than it is in the United States.

King said that Apple had gone to great lengths to make sure that its hardware products are priced at "parity" in Australia, which takes into account Australian GST as well as the cost of delivering its products to the country.

Adobe and Microsoft were also questioned as part of the inquiry following summonses being issued last month, with Adobe explaining that it charges Australian customers $1000 extra for a software suite because users are receiving a "personalized" service on their local website. Microsoft said its prices, which include a $2000 increase for a software suite, were based on market competition and that users would vote with their wallets if they didn't agree.

Article Link: Apple Blames High Australian Markups for Digital Content on Media Rights Holders

[ArmCortexA8]

Obviously the 61.4% price markup indicates to me their negotiations for Australia were pretty poor. Maybe they should renegotiate and get this resolved. Seems to me like price gouging at this rate.

[Santabean2000]

I'm sick of the content industry holding the world to ransom. It's almost our duty to display civil disobedience (read downloads) to force them into alternative models.

People will pay a reasonable fee for good content if the model is done right. Piracy for music has tailed away since the rise of Spotify et al. It's about time the TV and film industry moved to similar offerings.

[batchtaster]

Apple's response sounds about right, and seems to be reflected in the percentage markups; that is, there's not an across-the-board markup for all content, making it believable that music rights holders have different demands from movies or TV shows.

Adobe and Microsoft's responses are complete ass. Show me the "personalized service on their local website". And let me trade it in for the extra $1000 I'm outlaying for the privilege of that non-existent service, since I'd rather have the cash. Microsoft's is simply that people are paying it, so they can charge it. Which is true, but still ass-worthy.

[Squilly]

Commence lawsuit in 3.... 2... 1...

[Peace]

Originally Posted by Squilly

Commence lawsuit in 3.... 2... 1...

Who is going to sue whom ?

[Squilly]

Originally Posted by Peace

Who is going to sue whom ?

Australia will sue Apple.... just like Mexico, Italy, UK, and nearly every other country in the world did.

[Peace]

Originally Posted by Squilly

Australia will sue Apple.... just like Mexico, Italy, UK, and nearly every other country in the world did.

For what ? Apple just showed them it's the content providers that do the markup .

[jav6454]

Originally Posted by batchtaster

Apple's response sounds about right, and seems to be reflected in the percentage markups; that is, there's not an across-the-board markup for all content, making it believable that music rights holders have different demands from movies or TV shows.

Adobe and Microsoft's responses are complete ass. Show me the "personalized service on their local website". And let me trade it in for the extra $1000 I'm outlaying for the privilege of that non-existent service, since I'd rather have the cash. Microsoft's is simply that people are paying it, so they can charge it. Which is true, but still ass-worthy.

Exact same thinking. Apple was more, "Don't look at me" while Microsoft and Adobe were "Pfff, cause we can, who else you gonna turn too?"

[Squilly]

Originally Posted by Peace

For what ? Apple just showed them it's the content providers that do the markup .

Remember this thread? http://forums.macrumors.com/showthread.php?t=1541341
Australia will get mad... eventually.

[Peace]

Originally Posted by Squilly

Remember this thread? http://forums.macrumors.com/showthread.php?t=1541341
Australia will get mad... eventually.

Australia would be better served by suing Microsoft and Adobe. They don't care whereas Apple at least explained why the markup exists.

[jozeppy26]

So CS6 is about 72% more expensive in Australia than the states. Why not just use a VPN and buy from the Adobe via the online US store? Would it catch you when you go to enter a billing address? Just torrent it, screw Adobe

[Squilly]

Originally Posted by Peace

Australia would be better served by suing Microsoft and Adobe. They don't care whereas Apple at least explained why the markup exists.

Everyone wants a piece of Apple...

[tekboi]

Apple... do something about this!

[iSamurai]

Originally Posted by MacRumors

Adobe explaining that it charges Australian customers $1000 extra for a software suite because users are receiving a "personalized" service on their local website. Microsoft said its prices, which include a $2000 increase for a software suite, were based on market competition and that users would vote with their wallets if they didn't agree.

yeah righto $1k for personalised service... like making the website upside down so it appears the right side up here in Oz? And also typical MS response... it's like saying what are you going to do about it...

I think Apple's hardware prices are fair, which are about the same than US prices when factored in the GST. iTunes content pricing is another story which I hope will be resolved in the near future.

[a0me]

If you think that the Australian mark-ups are bad, take a look at the Japan.
Over here, songs are priced twice what they sell for in the US iTunes Store.

And the equivalent of the RIAA in Japan are wondering why sales are down...

[Pyrrhic Victory]

If you're paying for digital media and software, you're doing it wrong. The industry's false economy depends on conning you into you to subsidizing everyone who doesn't pay.

[Erasmus]

I would love to see Apple move to a unified App Store, with all non-US currencies converted on-the-fly, with current exchange rates. Makes things simpler for Apple, and cuts out the price-gouging middle-men. Most importantly, it's fair.

Furthermore, I hope Apple continues to push its own App Store as a replacement for music record labels (instead of buying songs at a large markup from them), meaning the greedy bleeps can be cut out for good.

[Krazy Bill]

Originally Posted by Santabean2000

I'm sick of the content industry holding the world to ransom.

Ransom?

Don't buy it. You'll live - I promise.

[iLilana]

more reasons to dissolve the labels.

[OLDCODGER]

Originally Posted by Krazy Bill

Ransom?

Don't buy it. You'll live - I promise.

Yep, that's been my motto since 1965 (no typo). Began with movie theatres, and carried on from there.

[lk400]

Good on you Australia for making an issue of this. For years you have been discriminated against with pricing. Before the digital age made this discrimination so obvious you simply lived with it. It is great to see it making main-stream news in your country. I hope Adobe, Microsoft and the content providers burn in a special place in hell for their continued arrogance. I hope you Aussies keep downloading from "alternative sources" - stick it to the man!

[BlueParadox]

Happy with the price of most music on iTunes here in Australia, but the pricing for films - and a lot of the TV shows - has me shaking my head and buying from elsewhere, unfortunately. Moreover, I hate DRM on any movie or TV episode purchase or rental.

I really wish the introduction of DRM-free music in the iTunes store was applied to the film and TV selections. I find it extremely inhibiting when I think about playing it on any non-Apple device, particularly when I can buy the DVD or Blu-Ray from a retail store, rip it, and compress it to play anywhere I want to. And often at a cheaper price than what Apple offer!!

[sir1963nz]

Originally Posted by iLilana

more reasons to dissolve the labels.

Why, they are a privately owned business.
No one forces musicians to sign with them
No one forces anyone to buy music from them.

What needs to be done is to open up "free trade" for the average buyer. I can buy books, CDs, DVDs, i.e. physical media from anywhere in the world and have it shipped, I should be able to do the same with digital media.

The media companies should have no say over who a retailer then on sells to, be it physical or digital media, likewise 2nd hand media.

Where I have a choice I would buy locally for service, support, backup, but when I can buy overseas and save significant sums of money I do so, and I dont blame the retailer, I blame the manufacturer who figures they can screw smaller countries, well if retailers can buy from overseas wholesale then they too would be cost competitive .

[Nermal]

61.4%

I thought we had it bad in NZ with 30% ... although I'd love to see that gap close a bit too.

Edit: It's 50% more in NZ, not 30% - I incorrectly assumed that NZ prices include GST so I'd subtracted that before.