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  • Gadgets, Internet, News - Written by on Thursday, July 19, 2012 15:59 - 75 Comments

    Choice wants geo-IP blocking abolished

    news One of Australia’s peak consumer groups has recommended the Federal Government investigate whether region-coding and charging Australians higher prices for products based on Internet IP address should be banned, in the context of an investigation which has found little justification for average Australian price hikes of 50 percent on technology goods.

    In May, following a public campaign on the issue by Labor MP Ed Husic, the House of Representatives Standing Committee on Infrastructure and Communications called for submissions to help inform an inquiry into pricing of technology goods and services in Australia, publishing the terms of reference for the initiative on its web site. The results have so far demonstrated a strong groundswell of public anger about ongoing markups on technology goods sold in Australia.

    Many of the submissions from users focused on the fact that online stores such as Apple’s iTunes, Valve’s Steam, Microsoft’s Xbox Live, Sony’s PlayStation Network, Amazon’s Kindle store and Adobe’s software store charged Australians higher prices for the exact same software and content than residents of other countries, particularly countries such as the US. Companies such as Microsoft have justified the charges based on the increased cost of doing business in Australia, but in its own submission to the inquiry (PDF here), consumer watchdog organisation CHOICE said there was in fact little justification for the price rises and that the legality of geo-IP blocking should be investigated.

    “CHOICE recommends that the Federal Government investigate whether technological measures that allow suppliers to discriminate against Australian consumers such as region-coding or the identifying of IP addresses should continue to be allowed,” the organisation wrote. “CHOICE considers these measures to be anti-competitive when they result in significant price differentials for Australian consumers.”

    “These restrictions keep prices in national markets artificially high to benefit international copyright holders,” CHOICE added. ” … Given the rapid growth of online retailing and the increasingly global market for IT hardware and software, Australian consumers should not be disadvantaged through restrictive, anti-competitive practices that sustain international price discrimination.”

    In its submission, CHOICE examined a number of online stores such as the ones mentioned above, and found that the average price difference between Australian prices and US prices of the same products was approximately 50 percent, with all products affected by price differences “to various degrees”.

    CHOICE noted that cost factors related to labour, occupancy and rent, GST, retail profit margins, logistics and transportation had been cited by many stakeholders in the retail environment as being behind the local price rises. However, the organisation noted, “it is clear that these costs, even cumulatively, cannot account for the 50 percent price differences identified in IT hardware and software products”.

    The organisation noted that price differences in software products used in business and education could also have more wide-ranging effects than just denying some users access to entertainment content.

    “From operating systems such as Windows to highly specialised graphic design and production products, software is now a necessity for many businesses and students,” the organisation wrote. “Products users for applications such as databases, word processing and accounting make businesses more efficient, productive and dynamic. If Australian businesses must pay more for these, they will be unfairly disadvantaged in the digital economy.”

    CHOICE particularly singled out major companies such as Microsoft and Adobe for criticism in its submission.

    “Some of the price differences appear particularly unreasonable,” it wrote. “For example, the product Visual Studio 2010 Ultimate with MSDN (New Subscription) has a monetary price difference of $8,665.29. For this amount, it would be cheaper to employ someone for 46 hours at the price of $21.30 per hour and fly them to the US and back at your expense – twice.”

    The issue of more traditional forms of blocking Australians from purchasing international products — such as region-blocking of content — also came under fire, with CHOICE fingering Japanese game giant Nintendo as one offender. “Unlike PC games, Wii console games are region locked,” the organisation wrote. “This means that the consoles sold in certain regions will only play the games sold in those regions. For example, a game bought in the US will not work on a console bought in Australia.”

    “Console locking makes it easier for companies to enforce price discrimination as it restricts the flow of goods across international borders. It prohibits consumers from circumventing domestic markets and buying goods online from websites like Amazon or eBay. Other products which are region locked include DVDs and Blu Ray films … CHOICE believes that it is unrealistic and unfair to continue region locking in light of the rise of online purchasing which enables consumers to access international marketplaces.”

    The organisation didn’t believe that changing the low value threshold for imports, where products purchased online from overseas retailers for less than $1,000 would be exempt from the GST and other government charges, would have an impact on the situation, despite a great deal of commentary on the issue by local retailers such as Harvey Norman.

    However, one way which CHOICE argued could assist in the situation was for the Federal Government to help educate Australians more with respect to the availability of parallel importers such as consumer electronics retailer Kogan and online bookseller the Book Depository.

    “CHOICE believes the Federal Government should play a greater role in educating consumers on the protections and rights they have when shopping online,” the organisation wrote. “This includes their right to return products that do not comply with the Australian Consumer Law, their right to access legitimate parallel imports from foreign markets, and their rights to privacy and security. This is justified given the significant increase in online retailing, and the clear benefits to consumers from participating in the digital economy. Importantly, increasing the level of confidence that consumers have in the online marketplace will also help increase competitive pressure on those businesses that engage in international price discrimination.”

    opinion/analysis
    I fully agree, as I’m sure most consumers would, that it should be illegal for organisations such as Valve, Microsoft, Sony, Amazon, Apple and so on to use geo-IP blocking and region locking to restrict the free flow of goods between countries such as the US and Australia with the aim of charging different prices for different markets.

    And this isn’t only an issue of price. It also applies to the basic availability of some content. Last week I attempted to download a popular book from Amazon’s Kindle Store to my Kindle in Australia, only to be told that the book wasn’t available in Australia in eBook form. I couldn’t find that book either through Apple’s iBooks store, or Google’s Play store. And yet, it is available readily in paper form through many Australian retailers — for a substantially higher price.

    As Labor MP Husic has realised, this issue is just not going to go away until Australians get a fairer go from these companies. A 50 percent average price hike across the board is just not good enough from these incredibly rich multinational groups. Australian consumers and the Government should stick up for themselves on this issue and continue to demand solutions from the offending companies.

    Image credit: Valve

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    75 Comments

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    1. jingo
      Posted 19/07/2012 at 4:30 pm | Permalink |

      the more exposure this issue gets the better

    2. Muso1
      Posted 19/07/2012 at 5:36 pm | Permalink |

      The problem is, most of the problems are with US companies, and I can’t see them changing because of Choice, or the Australian government.
      I found a few minor problems with the Choice report too.
      Anyway, I agree it would be great, but it’s pissing in the wind at the moment.

      • Posted 19/07/2012 at 5:47 pm | Permalink |

        If the Govt legislates on the issue, and these companies want to operate in Australia, they will need to comply.

        • Muso1
          Posted 19/07/2012 at 6:37 pm | Permalink |

          Maybe you are right, but I think the issue is that it’s their US stores that are not willing to sell to Aussies.
          I think you are 100% right that the Aussie based outlets (Apple Store etc) should sell for the same prices, but I don’t think you can force Amazon to sell us mp3′s….. until they open up in Australia.

          • Posted 19/07/2012 at 6:40 pm | Permalink |

            @Muso1

            Yes and no. They’re STILL doing business in Australia, so they’d have to abide by our laws, even if it’s based from the US.

            Problem we may run into- too much government regulation may simply put these businesses off totally….

            • Marc
              Posted 20/07/2012 at 12:58 am | Permalink |

              The Australian government should stand up to America and American companies (and other foreign/multinational firms) in the same fashion that the US stood up to Swiss banks like UBS. When a multinational company does business in a country, the entire company has to abide by the laws of that country, not just the branch. This doesn’t mean that Choice’s proposal will open up content for the whole world, but it could force those larger companies with an Australian presence to provide content to Australian IP addresses. There are no American laws conflicting with this possibility, so it could be implemented. Other countries would need to be tackled individually.

              The reason content is blocked has more to do with how media is licensed locally. In the case of retailers, there are many companies that set up exclusive agreements with Australian distributors to market their products here, so when you try to go to the US online store you just get redirected to the Australian site which doesn’t carry the product you want or the price is higher. Then you have foreign companies that think Aussies will pay more for the same product so they want to block your access to the foreign sites.

              One work-around that already exists is to hire an American or other foreign “personal shopper”. You can also access sites directly through a US based proxy server. But even if you get access to the blocked site that doesn’t mean the retailer will ship to your Australian address. Again, the personal shopper becomes the solution. They can even package and consolidate multiple orders from multiple businesses as one single shipment to save on transportation costs.

        • Paul Krueger
          Posted 20/07/2012 at 11:45 am | Permalink |

          This is easy to fix. Amend the copyright laws to only protect companies that offer their (IP) products in Australia at the equivalent price. This would then be self regulating AND fair.

          • Paul Krueger
            Posted 20/07/2012 at 11:48 am | Permalink |

            A small amendment -> this would also ensure that all content is available in Australia. Media companies would lose their existing protections and give them a real and pressing reason to ensure we have access to their full catalog of products.

          • Dean
            Posted 20/07/2012 at 2:59 pm | Permalink |

            Now this is an interesting idea. I was wondering how such a rule would be enforceable. I.e. if Amazon (or whatever) is selling MP3s/books/etc from a U.S.-based website, using U.S.-based employees and so on, what could the Australian government do to force them change the way they operate?

            This is the answer! Nice.

    3. Myke
      Posted 19/07/2012 at 6:08 pm | Permalink |

      I agree with it all. But the devils advocate says they over charge by 50% and Aus companies can’t fill the gap? How shit are you?

      Sounds like the goverment needs some key incentives to get those industries flourishing and competitive in aus.

      • Posted 19/07/2012 at 6:18 pm | Permalink |

        That’s not exactly fair Myke- How would you replace and industry standard like Microsoft Excel? Or Adobe Premier? Or Apple’s Video Editing Suite?

        It’s all very well to say “Australian companies are obviously crap because they can’t innovate with better products, even WITH at 50% markup on normal software to easily compete against” But the fact is, MOST of this software and these services simply aren’t replaceable in any large form. They are industry standards, or are simply too big with too much choice to compete against.

        Note Bigpond Music- Often it is CHEAPER than iTunes. But it’s choice has been getting worse and worse because of Apple’s publicity and popularity driving people towards it. It can then charge what it likes, because Bigpond have been forced to lower choice to rein in licensing and save money from lowered revenues. This is possible because Apple is SO big, it can literally THROW money at the studios to ensure it has the largest choice, even if the licensing rights for certain tracks are ludicrous and automatically exclude other smaller competitors.

        This is not just about “better products” not being available. It’s about the BEST products taking advantage of that fact AND the fact that we are a small country with little clout to do much about it.

        I sincerely hope the government can make some headway with these companies….but I’m not holding my breath. The best we’re likely to see is increased education and ability to use grey importing and opening up international imports to encourage people to bypass these measures that stop us buying at reasonable prices, like much the rest of the world has.

        • Muso1
          Posted 19/07/2012 at 6:42 pm | Permalink |

          The same higher prices are pretty widespread in the UK and Europe.
          The US has a very large population, and retail is extremely competitive. The Aussie scene will never be that competitive. There are just a lot fewer people here who want/need $5000 cameras etc.
          Still, with the internet and common overseas travel, I do think it’s ridiculous to maintain these silly mark ups.

          • Stephen
            Posted 20/07/2012 at 1:45 pm | Permalink |

            Yes – but the itunes shop is the same shop and the servers are the same servers as used in the US – there is no difference in cost of sales for Apple. So your argument about market size is incompatible with the fact that their delivery system treats all markets as being combined.

            • muso1
              Posted 20/07/2012 at 2:20 pm | Permalink |

              Well I’m not agreeing with Apple, I’m just pointing out that for physical products, more demand and more competition is the best way to drive down prices.
              I’ve been buying music gear since the 1980′s, and the choice, competition and low prices in America are unmatched anywhere I’ve looked (Australia, Europe and UK).
              I can see NO reason why digital downloads (music and software) are priced more in Oz than the US.

              • GongGav
                Posted 20/07/2012 at 4:10 pm | Permalink |

                When you can get on a plane, walk across the road from the airport into a common tech store, pick up a copy of a program, turn around and get back on a plane to Australia and save then theres something wrong.

                And thats the exact situation with some Adobe products. You can fly to LAX, walk across the road to a Fry’s store and get their Creative Suite software for $2300, when its $4000 here.

                While thats one of the extreme examples, there are plenty of others. And they are the reasons theres such discussion over it. With the parity our dollar has enjoyed for quite a while now, the excuse of exchange rate has been shown to be bogus, and that the real reasons are more about price gouging.

                Which is what needs to stop. I have no problems with higher prices where its justified, but at the moment nothing does justify it. Even the larger market of the US isnt justification when the products are made on our doorstep.

                Economics of scale have a place, but the bigger the scale, the less benefit you get from the discounts, and our market is big enough that we wouldnt be that far behind the tipping point – you get big savings jumping from 100 items to 1000, not jumping from 1,000 to 10,000 or 10,000 to 100,000.

      • lol
        Posted 19/07/2012 at 7:07 pm | Permalink |

        These international coprorations use Patent, Copyright, License and Contract Law to pretty much make it impossible for Australian companies to have any control over what they do.

        Look at the billion dollar lawsuits these companies regularly throw at each other, no room for wannabes.

      • skywake
        Posted 20/07/2012 at 2:11 am | Permalink |

        Kinda hard to replace Microsoft, Nintendo, Sony, Valve, Adobe and Apple with Australian equivalents. It really comes down to the fact that you can go online and buy a thing and have it shipped here and pretty much the only extra you’ll pay is shipping. If you buy digital content, which virtually costs anything to move, you hit a bunch of tariffs.

        And we do develop Australian content…. which is also sold to us at a premium

      • Woolfe
        Posted 20/07/2012 at 11:32 am | Permalink |

        In the case of Software, the price comes from the Publisher, not the retailer.

        So even if Company XYZ was willign to sell at a lower price, when they attempt to buy through the legitimate channels they pay the higher price. If the buy using a parallel import policy, then the parent company stops selling to them in the other country.

        A perfect example is Steam. You can see on steam the exact US and AU prices. Steam has NO physical presence in AU, so there are literally no associated physical costs. And yet SOME (not all) publishers are providing games at a substantially higher cost.($40-50 higher in some cases)

        When Steam was questioned regarding it, they simply state “We do not set the price, the publisher does”.

    4. Joakal
      Posted 19/07/2012 at 6:17 pm | Permalink |

      Choice should have raised an interesting question; is it illegal for an Australian ISP to offer overseas proxies?

      However, it may violate contracts as there’s no legal protection for consumers against purchasing content from a proxy.

      A NZ ISP tried this, but quietly retracted the offer: http://arstechnica.com/tech-policy/2012/05/new-isp-offers-kiwis-a-global-mode-to-bypass-geo-blocking/

      • Posted 19/07/2012 at 6:22 pm | Permalink |

        Interestingly Joakal, while they DID withdraw the service….it was never labelled illegal afaik.

        I think, if enough ISP’s got together and did this, there would be little the content providers could do and they’re not likely to try and take on most of a telecommunications industry to try and stop it- particularly as it only represents, here, 23 million people, compared with the 310 million in the US. This sort of thing will ONLY work if it’s used as a battering ram…..not a knock on the door.

        • SLDR
          Posted 19/07/2012 at 6:42 pm | Permalink |

          However if a poxy became the “front” door the content providers would then use the credit card ID as a way of determining the geo-location of the customer.

          Anyone familiar with the US/AU free trade agreement? Must have something to say about pricing

          • SLDR
            Posted 19/07/2012 at 6:43 pm | Permalink |

            oops
            proxy of course..my keyboard R often sticks

          • R
            Posted 19/07/2012 at 7:12 pm | Permalink |

            The US-Aus FTA is a complete joke – it’s ridiculously one-sided. I doubt it would have anything of use – mostly it just brought some of Australia’s laws “into line” with America’s. i.e. they basically wrote our IP law for us.

      • Mathew
        Posted 19/07/2012 at 9:12 pm | Permalink |

        Such a service would become ineffective the second MaxMind or another GeoIP database owner marks the IP blocks at the VPN exit as Australian. Hulu among others already attempt to ban known VPN services from their service.

        • Posted 19/07/2012 at 9:14 pm | Permalink |

          @Matthew

          Well, isn’t it fortunate we’re moving to IPv6…with 3.4x 10 ^38 addresses to go through each time they ban one….

    5. Wilkshake
      Posted 19/07/2012 at 8:09 pm | Permalink |

      Valve doesn’t set the prices on Steam. Blame the likes of EA, Activsion and Zenimax

      • Thulsa
        Posted 19/07/2012 at 8:13 pm | Permalink |

        Yes it is very misleading to have steam as the article picture, they are one of the few who do sell them at the same price as the US. It’s just a few of the companies they sell games for won’t let them sell at a lower price over here.

        • Posted 19/07/2012 at 8:42 pm | Permalink |

          I don’t think we have enough information on the negotiation process between Valve and the game manufacturers to make this determination. The picture is appropriate as Steam is one of the primary platforms where it is possible to see this active price discrimination at work.

          • Thulsa
            Posted 19/07/2012 at 9:14 pm | Permalink |

            If you knew anything about how valve runs steam you would know it IS the other game publishers setting the price and not Valve, this has been talked about time and time again. Publishers set the price of the games on steam not valve, they set them to be comparable with the retail prices of brick and mortar stores.

            Valves own games on steam (ie the ones they actually price themselves) are in line with the US prices.

            • Posted 19/07/2012 at 9:28 pm | Permalink |

              While what you’ve said is true of Valve’s Steam platform in that they dont set the price, that doesnt mean they’re excused themselves. Valve has previously charged Australian users the full price on their products as well, not to mention they provide the facility.

              That’s alot like the arguement of AFACT vs iiNet – in that the platform owner (so the ISP) is the one to blame because of the user’s actions. In this comparison, the platform owner (Valve) is infact no better than the distribution chains it protects.

              As an IT-related expert, I am not one from a digital distribution platform background. I am however from Telecommunications and we are quite regularly pressed for information from Government agencies over the actions of our users. We are legally bound to protect that information up until the government can justify its actions with a supoena for said information – even if those actions can be deemed illegal.

              Valve can police this and they should. How they’re getting around the Free Trade laws pertaining to digital distribution is impressive – but as an ISP, we cannot do this. If are caught skirting the law as much as Valve has by region-locking certain websites, the government and the media would have a field day.

              Its no different.

            • Posted 19/07/2012 at 9:31 pm | Permalink |

              The fact is that Valve has built this geo-IP-blocking facility into its platform to start with … enabling price differentiation right from the beginning. We can debate the specifics of who is responsible for the actual pricing, but the fact is Valve is at least a tacit partner in such schemes by allowing the region control functionality in its platform.

              • Thulsa
                Posted 19/07/2012 at 9:43 pm | Permalink |

                You seem to be forgetting the other reasons for region locking, for example age classification of games differ wildly from region to region.

                For example in Germany you can not have many of the violent and bloody games as their censorship is much higher for this time of game. Australia has only just got an 18 rating for adult orientated games and before has had a few games banned because of this, in fact one of Valves own top games ‘Left for dead 2′ had to have the blood and carnage toned down to get a release. In these cases region locking is IMPERATIVE unless Valve wants to spend it’s time in courts across the globe for supplying banned or censored materials for sale.

                • Posted 19/07/2012 at 10:13 pm | Permalink |

                  hey Thulsa,

                  I take your points. But if you want me to say that Valve has no role to play in this debate, then I’m sorry — that’s a position I won’t take.

                  Renai

                  • Thulsa
                    Posted 19/07/2012 at 10:19 pm | Permalink |

                    So I give you some facts and good reasons for their region locking and pricing which you can’t deny but choose to ignore and judge them anyway without anything to back up your assumption?

                    Ok, then I see no point in continuing.

                    • Posted 19/07/2012 at 10:25 pm | Permalink |

                      @Thulsa

                      Come on, be fair now. Renai is quite correct when he says Valve MUST play some role in region locking, even if it is simply assent to do so.

                      Whether they are ultimately behind it or not is not really the point he is making.

                    • Posted 19/07/2012 at 10:39 pm | Permalink |

                      Thulsa,

                      I’m glad you see no point in continuing, because while Delimiter is an open conversation, there are limits to that conversation, as per our comments policy:

                      http://delimiter.com.au/comments-policy/

                      It is simply not rational to suggest Valve has zero role in helping to set regional prices, when they are the operator of one of the main platforms for selling online games. Dozens of submissions to the IT price hike inquiry specifically highlight the Steam prices as examples of the sort of regionalised prices the inquiry is investigating.

                      Delimiter is an evidence-based forum, and while you have presented some evidence that may diminish Valve’s perceived role in price-setting, you are not arguing that. You are arguing Valve has NO role in price-setting, which is patently illogical and irrational given Steam pricing is very obviously an ongoing negotiation involving the publishers and Valve.

                      I do not tolerate single-minded, irrational comments on Delimiter. So either open your mind and start discussing the situation rationally — acknowledging there are multiple angles on this debate — or take your one-minded views somewhere else.

                      Renai

                      • Woolfe
                        Posted 20/07/2012 at 11:40 am | Permalink |

                        I agree that Steam do have some place in it. Certainly they could put up more resistance.

                        But in all fairness to them when this was added in, they were still a relatively new market. They needed the publishers to sell through them. If the only way for them to do that was to provide what the publishers wanted, then they pretty much would have had to do it simply to ensure they had the stable of games to provide the service to their market.

                        This issue comes from the Publishers, not the Distributers. Steam suffer the same issue of any B&M store that tries to get around publisher restrictions, that being the Publisher no longer selling to them.

                        And a key element here is that whilst there are many games that are FPS (for example) there is only 1 Call of Duty, or Battlefield, or whatever. And if Steam wants those games on their market, they have to accept the publisher’s restrictions.

          • Noddy
            Posted 19/07/2012 at 9:30 pm | Permalink |

            Valve, publishers and distributors for the target country. Distributors do not like being undercut by Steam but too great a margin and will ask to have prices set at a certain point or they feel the game would not be something they would want to distribute. ie. blackmailing the publisher as the majority of sales are still through stores.

        • Posted 19/07/2012 at 9:18 pm | Permalink |

          valve added all the code to steam to make region gouging possible, I really don’t buy this the publishers have a gun to valves head and force them to do it. The publishers need valve more than valve needs the publishers.

          • Thulsa
            Posted 19/07/2012 at 9:28 pm | Permalink |

            Read this FAQ on a website dedicated to showing you the price differences on steam, I think they would have done their homework on this subject don’t you? – http://www.steamprices.com/au/faq

            Quote from the FAQ – ‘OMG WTF BBQ those differences are ridiculous. Be ashamed of yourself Valve!?
            Well, the prices may differ heavily, but don’t blame Valve – they don’t force the prices. Each publisher is on his own responsibility. Valve sets a price for a region only if the publisher doesn’t care about it.’

            Then look at this page – http://www.steamprices.com/au/topripoffs

            As you will see on that link which show you the worst price differences ALL the games are from a small number of the big publishers like EA, Activision, THQ etc… the ones that SET their own prices on Steam.

            • Posted 19/07/2012 at 10:41 pm | Permalink |

              Nobody is forcing Valve to allow publishers to set their own prices. That is a decision Valve made. Sure, the publishers weighed in, but ultimately it was a negotiation, not a one way street. That is the point I am making. Sure, much of the impetus here is coming from the publishers, but Valve allows it to happen, even if it does push back somewhat.

              This is a more complex process than you are making it out to be, Thulsa.

              • Zwan
                Posted 20/07/2012 at 9:38 am | Permalink |

                I complained to valve about this when black ops came out.

                They said publishers set prices.

              • midspace
                Posted 20/07/2012 at 10:18 am | Permalink |

                As you said above Renai.
                “I don’t think we have enough information on the negotiation process between Valve and the game manufacturers to make this determination.”

                We don’t know enough about the process that publishers use in pricing their software on Valve. Thus, making comments about it is pointless.

                I see sites like steamprices, showing prices between US and AU for products such as Assassins Creed, and Command con Conquer, and don’t see any price difference.

                http://www.steamprices.com/au/sub/14728/assassins-creed-pack
                http://www.steamprices.com/au/sub/15358/command-and-conquer-franchise

                And yet, other games from publishers, such as EA and Origin have set different prices for different regions.
                I myself, have not seen any empirical evidence that Valve is any way responsible for the price discrepancies.

                “Delimiter is an evidence-based forum”
                Unfortunately, I have not seen evidence on Delimiter as yet, that Valve’s Steam platform is directly involved in setting those prices.

                As I started above. MORE information is needed.
                If I have missed something, here, please provide links back to it. (As my wife points out, sometimes I miss something right in front of my nose)

                • Woolfe
                  Posted 20/07/2012 at 11:55 am | Permalink |

                  Whilst I do agree though that this is mostly an issue with the Publishers, because Steam(and other distributers) are beholden to the publishers if they want to sell product. Especially AAA type product.

                  I do also think it is fair to attribute a level of apathy at the very least to Steam, I think they are big enough now that they could be pushing back on this harder than they could have when this sort of thing started becoming common(Several years ago now).

                  But it is a big call to make, risk losing AAA titles (and perhaps an entire stable of products) simply to ensure the Publishers aren’t ripping people off. Especially when Steam themselves probably make a little extra when the publishers rip people off. (Assumign they take a percentage of the sale, and not a fixed amount).

                  So whilst Steam could be helping more, I don’t blame them for not wanting to kill their own business.

                  • Posted 20/07/2012 at 11:58 am | Permalink |

                    @Woolfe

                    They’re not likely to kill their own business. Something in the vicinity of 40% of all games sold now are distributed digitally.

                    So that would be a MASSIVE chunk of revenue those publishers would lose out on by refusing to accept Steam’s “Charge everyone the same” policy…..

                    • Woolfe
                      Posted 20/07/2012 at 12:08 pm | Permalink |

                      You are forgetting that Steam aren’t the only Digital option. The other digital distributers would LOVE it if steam suddenly lost the big 5 Publishers. Which are the ones who are the main culprits in the overcharging, and the ones who could afford to drop Steam if they wanted to make a point.

                      The question is who would stumble first, Steam or the big 5?

                      Teh other question is, if you were Steam, would you be willing to risk that?

          • Noddy
            Posted 19/07/2012 at 9:31 pm | Permalink |

            And the publishers need brick and mortar more than Valve and if they don’t want to be undercut too much by Steam they tell you to raise the price.

    6. Alan Brown
      Posted 20/07/2012 at 2:20 am | Permalink |

      Only 50%?

      It wasn’t that long ago (1990s) that the margin between US retail pricing and AU/NZ pricing could be as much as 700%

      The only reason Geoblocking exists is to enforce “exclusive distribution agreements” – and I’ve found that US vendors start getting quite anxious when informed that such exclusivity deals often violate the laws of the countries being sold into.

      It doesn’t help that a lot of USA outfits put Australia into the EMEA market. Sometimes the actual goods themselves go to their destination the long way round (books, especially).

      Knock on effects include even higher prices in New Zealand for products sold through australian distributors – often rendering pricing utterly uncompetitive when compared with similar products not subject to arcane distribution agreements (This is why Dynalink modems are ubiquitous in New Zealand. They were half the cost of everything else on the market)

    7. A.A.
      Posted 20/07/2012 at 5:16 am | Permalink |

      Hulu for instance says they’re working on getting international streaming rights for their content via @hulu_support on Twitter to many Australians, yet they are available in Japan where there, many have not resorted to unblocking services.

    8. A.A.
      Posted 20/07/2012 at 5:26 am | Permalink |

      Hulu is known to block many unblocking services as example, yet many of these are constantly “advertised” via Twitter.

      Hulu still won’t confirm plans to get international streaming rights for Australia or even a ETA for launching their site locally apart from some Australians being told by @hulu_support which is their support account on Twitter that they”re working on doing so in the past few months.

      Their only international service is Hulu Japan currently , which has proved very popular over there and is building up their presence there before they look at expanding to us in Australia.

      They own the Hulu.com.au domain name here and several trademarks with IP Australia.

      Netflix again blocks VPN services and despite owning various trademarks and domain names locally also won’t confirm any plans to be made available locally.

    9. Larryboy
      Posted 20/07/2012 at 8:32 am | Permalink |

      These companies need to their strategies.
      All of the books, TV shows, movies and games mentioned above are available on The Pirate Bay. The only thing that the proxy is blocking is my ability to pay for it.

      I have disposable income and I want to spend it on your products. Throwing up a wall is only hurting you.

    10. muso1
      Posted 20/07/2012 at 9:21 am | Permalink |

      In fact there is plenty that isn’y geo-blocked. My partner uses strawberry.net and receives cosmetics at a huge discount compared to Oz, and with free shipping. I buy a lot of my music equipment from the US. Music software is largely unblocked, most of it available from the manufacturer, direct, or from discount online resellers.
      The joke for me is the tech companies playing this old game – Apple, Adobe, Amazon, Sony, Panasonic.
      Many DSLR’s are significantly more expensive in Oz compared to the US, but most of them are manufactured and shipped from Thailand (on our doorstep).
      I recently worked out iTunes Top40 singles are 99 cents more expensive to Australians than Americans. This makes no sense as the digital distribution and stocking cost are identical between the two territories. On a recent trip abroad I was disgusted to find Final Cut Pro was most expensive at The Apple Store in Sydney, slightly less expensive at The Apple Store in London, and significantly cheaper at The Apple Store in Manhattan. This is one of Apple’s own products, sold in their own store!
      At least Apple have made some moves to level prices out across their stores.
      Choice mistakenly claim Aussies are charged higher prices because our economy is booming, while the UK and US are in recession. But the price differential was worse 10 to 20 years ago, when the opposite economic conditions were true.
      These companies charge Aussies (and Brits) more because they can. They still see people sleeping out overnight at The Apple Store to buy the latest iPad or iPhone, even when it is more expensive than the price for Americans.

    11. Posted 20/07/2012 at 9:30 am | Permalink |

      I fully agree, as I’m sure most consumers would, that it should be illegal for organisations such as Valve, Microsoft, Sony, Amazon, Apple and so on to use geo-IP blocking and region locking to restrict the free flow of goods between countries such as the US and Australia with the aim of charging different prices for different markets.

      If you bring a case of cigarettes into the country they hit you with a substantial import tax, same with alcohol, same with heaps of stuff. The GATT agreements tried to get rid of all this foolishness, but let’s be honest with ourselves, borders are never really open, never have been.

      By the way, since these products are games that you can easily live without… if you feel ripped off then don’t buy the stuff.

      • Posted 20/07/2012 at 9:36 am | Permalink |

        “if you feel ripped off then don’t buy the stuff”

        Not a realistic solution to this problem. As a gamer, what, am I going to deliberately miss out on a major hobby just because it costs more in Australia? No. But, if the government wants to investigate ways to make that hobby cheaper, yes, I am going to have my 2c.

        • muso1
          Posted 20/07/2012 at 10:00 am | Permalink |

          I think you are right, but the most powerful voice is the consumer.
          I don’t see how you can legislate Apple to sell a hit song to Aussies for the same price as they do to Americans. We’re living in a free market, capitalist society. It’s understood retailers can set whatever price they can get away with, and competition is the best way to drive prices down.
          Broadband is expensive and poor quality in Oz. But you have no choice but to choose one or other evil.
          A very small Aussie population is never going to have the equal consumer clout of Americans.
          All we can do is name and shame.

          • Woolfe
            Posted 20/07/2012 at 11:59 am | Permalink |

            True, altho I have often wondered the effect if we were able to convince the majority of buyers to simply not buy on the release Week. IE if a AAA product came out and the consumers simply by choice didn’t buy it for a week.

            That would send a message to publishers not to ignore us.

            Unfortunately I doubt we would ever get enough people to do it to have enough of an effect.

          • Joakal
            Posted 20/07/2012 at 4:25 pm | Permalink |

            Correction; a regulated capitalist society. There’s no free market in Australia. If there was, then Copyright and other temporary government granted monopolies wouldn’t exist as the person with the most money, has most power.

            Since society is being punished for ignoring barriers of entry for new competitors with a relaxed ‘free market’ attitude. I guess it’s time for the government to step in.

    12. Justin
      Posted 20/07/2012 at 10:05 am | Permalink |

      You can bypass Valve’s geo locking by using a proxy. I use one called XRoxy. Costs $7 a month but it’s worth it to save 30 or more. Use the proxy to login to the store via steampowered.com (not the client). You need to change your country, state and pcode to a US one (I use New York, 10010) but you can use a regular Aust credit card. Yes, I know this is against the TOS, but Valve doesn’t seem to mind. I’ve used it a fair few times with no trouble.

    13. Caser
      Posted 20/07/2012 at 10:14 am | Permalink |

      One way to light a fire under price gouging online services is to make region-based price discrimination a valid defense for copyright infringement under law.

      • Posted 20/07/2012 at 10:17 am | Permalink |

        Nice idea :)

        But the lawyers of the content providers would have a field day with that :D

      • muso1
        Posted 20/07/2012 at 10:30 am | Permalink |

        The region thing in entertainment is as much about 1) funding programme creation by selling to foreign networks, and 2) protecting local talent by restricting foreign access, as it is about pricing.
        I wish we could get off the hobby horse about ‘content creators’ alone.
        Apple, Sony, Panasonic all charge more for hardware Down Under. Apple and Microsoft have charged more for software, even if it’s digitally distributed.

        • Joakal
          Posted 20/07/2012 at 4:28 pm | Permalink |

          For physical goods, possibly having a defence for counterfeit infringement under law too.

      • midspace
        Posted 20/07/2012 at 10:57 am | Permalink |

        It is defintally a grey area, especially when the content is not available in Australia through any legal distribution channels, and not because it was refused classification either.

    14. Stephen
      Posted 20/07/2012 at 11:21 am | Permalink |

      Given that these are the companies that have lobbied for decades for “open markets”, removal of tariffs and global mobility, it is time for them to see that this argument goes both ways.

      Openness is not just to favour companies, it’s for consumers as well.

    15. jason
      Posted 20/07/2012 at 12:23 pm | Permalink |

      It’s my understanding that the Australian Government can’t legislate on what US companies do.

      The Geo-blocking occurs in America, not Australia.

      Let’s not forget that free services have this in place too – the BBC iPlayer, Hulu, and (almost) every other first world broadcaster does it including every TV network in this country, including your ABC.

      If the federal government did legislate this, would they also legislate for the ABC to remove iview geo-blocking for those overseas?

      • Posted 20/07/2012 at 12:27 pm | Permalink |

        Jason, most of these US companies have trading companies in Australia.

        • Posted 20/07/2012 at 12:35 pm | Permalink |

          @Jason

          What Renai said. And also, the free services do it to limit bandwidth usage. THAT is the main reason, seeing as it is free and they have limited bandwidth available.

          The 2 cannot be compared.

          • muso1
            Posted 20/07/2012 at 1:46 pm | Permalink |

            I don’t think you are right about the free tv services.
            I’ve just spent a few weeks watching the Tour De France using SBS On DEmand. They couldn’t offer that service outside Australia, because the Tour has sold TV rights to cable companies in Europe and ITV in the UK. This is effectively the same situation that arose between Optus and Telstra with footie. No broadcaster will pay millions (and thus support a sport) if someone else can show the same product in competition.
            Likewise the BBC. You have to pay to use BBC’s iPlayer in Australia.
            I’m sure the content is heavily managed too. Again, ABC wouldn’t pay big bucks for a BBC costume drama if they had to compete with a free broadcast from the BBC itself.

            • Posted 20/07/2012 at 2:02 pm | Permalink |

              @muso1

              Good point.

              However, this whole licensing point still stands. It is ridiculous that the licensing isn’t homogenised across countries. Essentially what they’re doing is capitalising on “Ooo, I think they’d want that more, let’s charge them more for it”. It’s a bastardised version of Supply and Demand to simply make more profit. It costs them not 1 cent more to distribute it here, yet they make a 20, 40, 60% profit on it because no one else has it.

              That’s called monopolisation and price gouging. It’s illegal in this country. But because they’re outside our country AND there’s no other way to get the content, they get away with it.

              • muso1
                Posted 20/07/2012 at 2:29 pm | Permalink |

                I’m not sure i agree.
                These licenses are all sold under a competitive tender.
                Hence, if CH 10 are prepared to pay more for Graham Norton than the ABC, CH10 will get the show. As the company that’s won the rights, and paid a lot of money, I think they are within their right to screen it when it best suits them.
                Sports governing bodies are tasked with getting the best deal from broadcasters. It pays players wages, but also for facilities, prize money, grass roots development.
                All this stuff has evolved over decades. It could be swept aside, especially to reflect the internet, modern technology and the global village, but I don’t expect it to happen in a hurry.
                When you produce something – a football league, a tennis tournament, a blockbuster movie, a comedy series, it;s normal practice in a capitalist society to get the best price for it you can.

                • Posted 20/07/2012 at 6:00 pm | Permalink |

                  @muso1

                  You make a good point. However, you’re also mixing 2 points together- Licensing and distribution.

                  Channel 10 buy a license to show NCIS, but they don’t distribute it. They distribute the licenses to, for example, Neighbours (particularly in the UK) because they make it. But Netflix only distribute the content, they don’t make it. They’re middlemen.

                  The whole license/distribution system is built around profit. The problem with that is, if you control the rights in that country, consumers are automatically forced into a monopoly. In any other industry, this would lead to a cry of outrage. And yet in content, it’s simply a way of life. It is an old system. A broken system that needs revamping for today.

                  The internet is the way it will happen. Companies can get on board, continue to produce good shows, license them at reasonable rates to distributors, or distribute it themselves and they can continue to be profitable, albeit likely with some fat trimming. Or they can continue with the old system….and watch as it dies over a number of years…..

        • muso1
          Posted 20/07/2012 at 1:52 pm | Permalink |

          I agree with digital downloadable products, like APPS, music and software, because they are sort of virtually stocked online, not shipped around the planet.
          It presumably costs Apple the same to stock a Coldplay album whether it is for sale on iTunes USA or Australia.

          But I do think there are pitfalls in proposing to legislate against selling products for a different price in different territories. Applying public pressure is the best you can do.

    16. A.A.
      Posted 20/07/2012 at 12:48 pm | Permalink |

      Try to watch something on Hulu and up comes a message saying they don’t have international streaming rights as of now and offers to take note of your name and location.

      The only thing not blocked for Aussies are digital shorts from SNL on there at this time.

      Even our ABC is a content partner to them ironically. Seven, 9 and TEN aren’t.

      Hulu is offered in Japan though and is very popular over there where geo-unblocking services seemed to be not as popular there for Hulu there since last year.

      At this point at this time Hulu can’t commit to further international launches for now.

      I know for a fact that Hulu does own a Australian domain name, Hulu.com.au since 2010.

      They are unable to make use of it currently as they haven’t confirmed when they’ll get international streaming rights for Australia.

      I know many Aussies on Twitter have been told by Hulu’s support team there that they’re working on getting international streaming rights so they can offer Hulu here officially but refuse to say when that will occur.

      They’ve been vague about when they’ll get international streaming rights for Australia and no news about Australian launch plans from Johannes Larcher who’s in charge of international at Hulu.

      Hulu recently talked about the success of their separate and only current international offering in Japan, Hulu Japan on blog.hulu.com just last month and are focused on improving their Japanese offering before launching, say locally.

      Until then geo unblocking services will be needed still for Hulu

      Another example, NBC (a co-owner of Hulu) accidentally made a iPad app available for a short time in Australia last year on the iPad with full episodes.

      A short time later they decided to geo block the content in the app to US IP addresses only and remove it from the Australian app store.

    17. A.A.
      Posted 20/07/2012 at 12:51 pm | Permalink |

      Both Hulu and Netflix have in fact registered trademarks and domain names locally, such as Hulu.com.au and Netflix.com.au yet they both won’t say when they will get international streaming rights for Australia to make use of the .com.au sites.

    18. Posted 20/07/2012 at 10:06 pm | Permalink |

      Hey everyone,

      thanks for the debate over the past couple of days. There have been some good points raised.

      However, at times I fear the conversation has been getting a little heated at times on Delimiter and sometimes a little circular. Sometimes the argument has also gotten a bit irrational. This isn’t what I’m really aiming for with the site — what I want to promote is new ideas, new discussions, to help push things forward.

      I want Delimiter to be a forum of open-minded individuals, debating things based on evidence. I don’t like inherent political bias and I have felt recently that some of this has crept back into our conversation.

      With this in mind I’m closing this thread. I’ll consider over the next couple of days how to stimulate things more in the direction I’m after.

      Cheers,

      Renai




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