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

[Stella]

Adobe's position is the worse, microsoft excuse is claim is 'we can rip of Australians because we can'. At least Apple has some reasonable excuse for higher mark up - regarding music content.

Seems that Australia has a much stronger case against Microsoft and Adobe, especially.

 

[Smeaton1724]

What do you know about Australia you didn't read on wiki?

Personally I think is software is being sold electronically (with no DVD) then there is no reason it can't be pegged against the USD. And that should apply to anywhere in the world!

Music/movies are in a different position as royalties from 3rd parties apply and it's obvious that different countries have negotiated with Apple but what I don't get is you can buy some Australia music in the US iTunes store cheaper than here in the Australia iTunes store.

The difference is do your Auz content creators work for the same those in the US do? Answer: A solid no, they get a lot more. Hence the difference in hardware being minimal (cheap labour, shipping no big extra and taxes not huge either).

Foreign suppliers of media look at Australia and peg their own at what Auzzies get paid. As a country you cannot have it all ways - high native wages and cheap imported digital media.

2 Options:
1. Media will be pegged by foreign suppliers at what Australian born creators sell theirs at, or expect to sell theirs at in order to pay a living wage.
2. Bring the media price down to comparative US levels and force natives who want to create digital media to accept lower wages, therefore the industry will shrink as the benefit erodes.

My opinion is based on spending a year in Auz travelling and working and comparing the strength of the Auzzie Dollar compared to the UK Pound, which has become the Pommie Peso!

 

[Ciclismo]

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.

I'd love that too, but it won't happen because the Studios want to keep regionalised control over everything. That's why DVDs and Blu-Ray have those asinine Country Codes that prohibit me playing a film here in Germany that I purchased in the US. The Studios all play by the same rules to maximise their collective profits.

 

[gnasher729]

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.

You'd think it is fair because it benefits you. To be more precise, it benefits you _right now_. But then my company employs people all over the world, including Australia. I should ask my Australian colleagues if they think it would be fair if their salary was fixed in US$ and automatically converted to Aus$. Which would have led to a 50% loss of income for them in the last ten years.

 

[Lancer]

My opinion is based on spending a year in Auz travelling and working and comparing the strength of the Auzzie Dollar compared to the UK Pound, which has become the Pommie Peso!

I'd say the AUD is over valued and has been for some time but thats a catch too. The high AUD to the USD means fuel prices stay relatively low compared to some placed but it's also hurting exporters while imports are cheaper.

If the AUD goes down then it's likely imports for these vary companies will go up further so we are screwed further.

 

[Bubba Satori]

Who is going to sue whom ?

Everybody.

Lawyers 1 - Everybody else 0.

A little known fact.
Legislative bodies in the western world are infested with 70% lawyers.
Who do you thinks benefits most from the incomprehensible,
Byzantine, suffocating avalanche of laws they produce?

 

[JoshBoy]

The difference is do your Auz content creators work for the same those in the US do? Answer: A solid no, they get a lot more. Hence the difference in hardware being minimal (cheap labour, shipping no big extra and taxes not huge either).


Foreign suppliers of media look at Australia and peg their own at what Auzzies get paid. As a country you cannot have it all ways - high native wages and cheap imported digital media.

2 Options:
1. Media will be pegged by foreign suppliers at what Australian born creators sell theirs at, or expect to sell theirs at in order to pay a living wage.
2. Bring the media price down to comparative US levels and force natives who want to create digital media to accept lower wages, therefore the industry will shrink as the benefit erodes.

My opinion is based on spending a year in Auz travelling and working and comparing the strength of the Auzzie Dollar compared to the UK Pound, which has become the Pommie Peso!

You have obviously spent time in Amsterdam also because you my friend are on drugs. This has been going on well before the strength of the Aussie dollar hence why it was excepted in the past. Now with the strength of that dollar and the majority of developers been those outside Australia should it not be cheaper?
In the past physical items was argued of that of scales of economy. We now speak of digital content without the need to consider boarders. Your argument is flawed.

 

[Number 41]

How about this:

If Australians think they're being charged too much money for something, an Australian company should start a digital music business and compete with Apple on price.

That's how the market works -- not by some bureaucrat grandstanding for votes by "going after" the big bad foreign corporation that is "price gouging" it's poor Australian citizens.

Vote with your wallets and don't support Apple -- support a local company that you believe prices more fairly.

Or, move someplace else.

 

[Lancer]

If Australians think they're being charged too much money for something, an Australian company should start a digital music business and compete with Apple on price.

You clearly know nothing about our local digital environment or how the whole Apple eco-system works.

We do have several local online retailers which cater for other devices but the big problem is if you have an iPhone/iPad/iPod you're locked into iTunes for your legal downloaded music. No one in the world has the legal option to use other online services. Your only other legal choice is to go and buy the CD and rip them into iTunes, assuming your new Mac has a DVD drive.

It's not about other retailers which has been the argument around the world it's about prices at Apple's online music store.

 

[gnasher729]

You have obviously spent time in Amsterdam also because you my friend are on drugs. This has been going on well before the strength of the Aussie dollar hence why it was excepted in the past. Now with the strength of that dollar and the majority of developers been those outside Australia should it not be cheaper?

You are confusing two prices.

One is the price of an item in Australian Dollars which you pay.
The other is the price of an item that you buy, converted to US$.

If Apple's cost for a computer is say 80% in US dollars, and 20% in Australian dollars (employment cost and other cost incurred in Australia), then with a stronger Australian dollar, what you pay in Australian dollars should go down significantly; the price converted to US$ should go up slightly because Apple's Australian part of the cost has gone up.

And that is _exactly_ what is happening for Apple's hardware: The cost converted to US$ is slightly higher than in the USA, reflecting the fact that salaries, cost of offices and stores etc. has gone up for Apple (plus the additional cost of better consumer protection in Australia). The cost of the hardware in Australian dollars is actually going down.

If you go to a hairdresser, whose cost is 100% in Australia, the cost of a haircut in Aus$ should stay unchanged, but the cost when converted to US$ will go up, as the Australian Dollar gets stronger. Strange enough, that doesn't get mentioned.

We do have several local online retailers which cater for other devices but the big problem is if you have an iPhone/iPad/iPod you're locked into iTunes for your legal downloaded music. No one in the world has the legal option to use other online services. Your only other legal choice is to go and buy the CD and rip them into iTunes, assuming your new Mac has a DVD drive.

Who says you are limited to iTunes? I buy music from Amazon, I have actually bought music directly from a record company (Deutsche Grammophon with a huge selection of classical music, Naxos does the same); I could download audiobooks from Audible, but use another company which is not in my own country and got lots of free audiobooks from librivox.com. It is really clueless to claim that you are in any way locked into iTunes.

In NZ it's legal to use iTunes US (it's considered a parallel import which is completely legal); it would surprise me if Australian law is significantly different.

That's an interesting question. There's also the question: What is legal for you, and what is legal for Apple? Apple will have a contract with the record company, and that contract may only allow them to sell music from the US store to US customers. I think in the EU, they must allow anyone in the EU to buy from any store in the EU (but record companies would still try to force limitations onto Apple).

I'm quite sure it's legal for you to buy the music anywhere, but Apple might not sell it and might not be allowed (by contract) to sell it to you. And their terms of service might say that you haven't actually legally bought the music if you purchased from another country, so you might have the music on your hard drive, and you might have paid money for it, but it might still not legally be yours.

 

[phillipduran]

Australia is a long way away. They should expect to pay higher for the cost of shipping digital goods to . . . wait a minute.

 

[hektor5wolf]

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...

Wait....Really???? I thought that was a normal pricing!!! How many yens would a song cost in the US?

 

[iGrip]

. King also said that Apple would love to see "cheaper, lower prices in the Australian market," according to News.com.au.

Image​

Earlier today, MacStories noted that markups in Australia average as much as 61.4% for music,

Sure Apple. You'd love to see lower prices, that is what you say. And you say that 'It's not our fault, those meanies make us charge high prices".

Would it be possible to make somewhat lower profits? Naawwwww, that is not possible.

Anybody who believes anything ever said by anybody who works at Apple is excessively gullible.

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.

I believe you!

 

[notthedark]

"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."

They always get you with the shipping. It's around 4500 miles between China and Australia and around 7000 miles between China and New York. The extra distance alone explains the higher prices in Australia. Wait. What?

 

[Jibbajabba]

If you can get away with it, why make it cheaper.

 

[OLDCODGER]

"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."

They always get you with the shipping. It's around 4500 miles between China and Australia and around 7000 miles between China and New York. The extra distance alone explains the higher prices in Australia. Wait. What?

Container rates. A tad more Macs would be sold in the US.

 

[gnasher729]

"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."

They always get you with the shipping. It's around 4500 miles between China and Australia and around 7000 miles between China and New York. The extra distance alone explains the higher prices in Australia. Wait. What?

The cost of employees in Australia, the cost of running stores in Australia, the cost of better consumer protection in Australia compared to the USA. In Australia, Apple has to pay its employees Australian salaries, has to pay office rent in Australian dollars and so on. When these costs are converted to US$, they are higher than in the USA.

"Cost of delivering" is not "cost of shipping to the country", although I noticed that flights to Australia seem to be very expensive, and just because the distance from China to Australia is shorter, that doesn't mean air transport is actually cheaper. "Cost of delivering" is the total cost incurred after building, and a lot of that happens in Australia.

 

[iGrip]

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,

But then Apple would make less profit in some countries! Perish the thought! We cannot have that !


/s

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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.

are you aware that the United States Supreme Court just came out with a decision this week on that topic?

The publishers sued somebody who bought textbooks overseas for cheap and sold them to American students for less than list price. He got sued by the publishers, and dragged all the way to the Supreme Court.

(BTW, the USSC decided that he was within his rights due to the First Sale Doctrine.)

so there are two points here: until earlier this week, it was not clear that it was ok to do what you suggest with physical media, and if you try it with something other than college textbooks, you may well get sued by the publisher.

 

[Oldmanmac]

Seems as though Apple has been gouging people for most of it's existence. How else could they afford to donate Millions of $ to "their" choice of charities? I'm sure they are NOT dipping into their profits too much.

You may say 'don't buy Apple then. Well, I've been an Apple customer since the 128/400k days, you? I've always felt they were over charging cause they could. Evidently I'm right, cause people pay it.

Everything Apple touches (be it hardware, software & media) is jacked up beyond belief.

Off my rant now.

 

[paulrbeers]

We do have several local online retailers which cater for other devices but the big problem is if you have an iPhone/iPad/iPod you're locked into iTunes for your legal downloaded music. No one in the world has the legal option to use other online services. Your only other legal choice is to go and buy the CD and rip them into iTunes, assuming your new Mac has a DVD drive.

I

Apparently you aren't being creative enough. I buy mostly albums from Amazon here in the states. Why? Because they consistantly have MP3 albums (non-DRM) for $5-7 and sometimes as low as $3. I can download them to my Mac and have them automatically imported into my iTunes for loading onto my iphone or ipad. Further, they even have a "cloud" player so that I can stream them instantly from Amazon completely by passing iTunes altogether. Outside of Apps, I haven't bought anything from Apple in years. Amazon caters more towards it's own Kindle devices, but I have no problems with using their stuff on my iDevices.

----------

Who says you are limited to iTunes? I buy music from Amazon, I have actually bought music directly from a record company (Deutsche Grammophon with a huge selection of classical music, Naxos does the same); I could download audiobooks from Audible, but use another company which is not in my own country and got lots of free audiobooks from librivox.com. It is really clueless to claim that you are in any way locked into iTunes.

This...

 

[cosmichobo]

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

We may be following the US's heavily litigious societal norm, but we're not there yet.

Also, that's completely at odds with what has been going on. The government has simply asked Apple, Adobe and M$ for answers as to why some of their products are (in some cases) much higher priced in Australia than in the US.

There hasn't even been a threat of any kind of legislative changes following these results. "The People" just want some answers.

Now we have them.

 

[iGrip]

If I do ever get invested in the iTunes ecosystem, it would really be for the convenience of having my music everywhere I go, across all my devices.

You can do that right now for free with any number of cloud services, including Google Play Music. No need to "invest" in Apple.

 

[drsmithy]

Australia is the rip-off capital of the world. It's just that the relatively recent ease with which people can compare prices and, more importantly, purchase from foreign sources, has allowed them to realise how much they're being screwed.

It's interesting that there's been this sudden focus on Apple, et al, given that the big 3 Euro car manufacturers have been attaching 40%+ premiums to their vehicles for so long, people now think it's entirely normal, and that's a much larger cost.

 

[iGrip]

So the local copyright holders get to set the price locally,

That is NOT the case in the United States. Indeed it is 100% untrue.

In what country is this true? Any country?

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The cost of employees in Australia, the cost of running stores in Australia, the cost of better consumer protection in Australia compared to the USA. In Australia, Apple has to pay its employees Australian salaries, has to pay office rent in Australian dollars and so on. When these costs are converted to US$, they are higher than in the USA.

"Cost of delivering" is not "cost of shipping to the country", although I noticed that flights to Australia seem to be very expensive, and just because the distance from China to Australia is shorter, that doesn't mean air transport is actually cheaper. "Cost of delivering" is the total cost incurred after building, and a lot of that happens in Australia.

Those factors influence prices to consumers only if and when the seller refuses to lower its markups. With a 61% markup, I think Apple has some wiggle room.

 

[fruitpunch.ben]

Apple is exactly right. It is not them - it's the content providers. For proof, look at the Australian App store differences - which Apple can control - they are on par. But they do not control the prices of songs and movies.
The thing is, the prices for songs (70% markup) was completely fair when the Australian iTunes music store debuted. Back then, the Australian dollar was much lower than the US - about 60US cents to one Aussie dollar. Also, back then a cd in a store in Australia cost - no joke - $30-$40 dollars. So paying $17 dollars for a digital album was a HUGE discount.
Unfortunately, Apple's negotiation of prices with the music labels did not include the possibility of changing prices due to currency fluctuations. Hence the labels are now rubbing their hands in glee because Australians are still paying $17 an album when the dollar is par or higher than $US.
But Apple is correct here. Look at the prices of most of their computers. They are CHEAPER in Australia (when sales tax is taken into account) than in the US. It is only non-negotiable content deals where the prices are so high.