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  • Enterprise IT, News - Written by on Monday, July 30, 2012 15:12 - 26 Comments

    IT price comparisons not useful, says AIIA

    news The IT industry’s peak lobby group today said it was “not useful” to directly compare prices on technology goods and services between Australia and other countries and that increased Australian prices on such goods reflected different conditions and protections locally compared with other countries.

    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 previously justified the charges based on the increased cost of doing business in Australia.

    However, in a statement issued today associated with the group’s attendance at hearings on the issue kicked off this morning, the Australian Information Industry Association, which represents large companies such as Adobe and Microsoft, said the base for the complaints wasn’t valid. In the statement, AIIA chief executive Suzanne Campbell said “it was not useful to try to directly compare prices in one country with those in another”.

    The AIIA said: “Price differentials between ICT product purchased in Australia and similar product bought overseas reflect, among other factors, the different operating environments of countries and also the more robust consumer protection given to consumers in Australia.”

    In April this year, global software giant Adobe, which is represented at the hearings by the AIIA, continued a long-running tradition of extensively marking up its prices for the Australian market, revealing that locals would pay up to $1,400 more for the exact same software when they buy the new version 6 of its Creative Suite platform compared to residents of the United States. The price markups came despite the fact that the software in both cases is downloaded via the Internet to buyers.

    Campbell said there were a range of vendor for downloadable goods costs that often were not initially obvious to consumers.

    “Goods are not priced to reflect only the cost of producing and distributing them. Goods which are downloaded still have research and development, product development, advertising, marketing, and support costs,” the AIIA CEO said. “The online store is not an automated process without any staff. Staff are still required to build, manage, and maintain the backend systems – so local labour costs are relevant.”

    “Often these people are more highly skilled and are therefore paid more than retail staff in bricks and mortar stores. There are costs involved in advertising and marketing services locally. Regardless of the distribution method of the product – the costs of providing support services remain and need to be accounted for. An additional cost associated with downloadable goods specially games relates to content developed by third parties with their own rights, licensing, wholesale and distribution models.”

    Campbell said the ICT industry was not “homogenous”, and that IT hardware, software and professional services business models, cost models and pricing mode varied significantly across markets and geographical boundaries.

    “Costs models reflect the specifics of each business model but in any event the cost of a good is only a small fraction of the investment the company has made in developing a product or service,” Campbell said. “The price also reflects the investment by the company in developing its underlying intellectual property.

    In addition, Campbell added, the channel through which the product is sold would affect its price.

    “AIIA members report they sell up to 100% of their goods via channels,” she said. “This might include volume licensing to third parties, through retailers like Harvey Norman as fully packaged product, through bundling by original equipment manufacturer or through online services. The variety of channels used introduces significant product differentiation and pricing tension between the different channels and also direct sales (where they occur) in both setting the recommended retail prices and discounting from the recommended retail prices.”

    Campbell said taking into account all these factors, prices for some IT products in Australia may be incrementally more expensive than some overseas markets. IT consumers and regulators needed to understand and appreciate Australia’s higher operating cost environment. However, the executive did give some credit to the argument that technology prices in Australia were not fair.

    “Notwithstanding these added cost pressure, there is a realisation that some issues need to be addressed,” Campbell said. “As the Australian market now faces a truly globalised trading environment it will need to adjust. AIIA members acknowledge that this will impact their business models and that market players will have a shared responsibility to balance their business imperatives, the costs that go with servicing a local market and the increasing pressure of global markets.”

    opinion/analysis
    Wow. Dozens of Australian consumers have filed hundreds of price comparisons to a Federal Government inquiry into local markups on technology goods and services, and dozens of media outlets have written hundreds of articles about this issue over the past several years. Probably about a dozen parliamentary speeches have been made about it. And every time Delimiter raises it, we get stacks of comments from angry readers frustrated by the behaviour of companies like Adobe, Microsoft, Lenovo and others.

    But according to the AIIA, IT price comparisons are “not useful” and there’s no issue here — move along people, nothing to see. Wow. This is truly industry denialism at its best. Someone call the anti-climate change organisations — they may want their lobbying tactics back.

    Image credit: AIIA

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    1. Posted 30/07/2012 at 3:14 pm | Permalink |

      FYI this is the program for the IT price hike inquiry hearings today. I couldn’t get down there, due to writing commitments, but I’ll be examining the Hansard tomorrow and the rest of this week:


      PUBLIC HEARING PROGRAM
      Monday, 30 July 2012
      Macquarie Room
      Parliament House, Sydney

      09.30 am
      Australian Information Industry Association (AIIA)
      - Ms Suzanne Campbell, CEO

      10.15 am
      Australian Publishers’ Association (APA)
      - Ross Gibb (Macmillan)
      - Peter Saffin (Macmillan)
      - Jose Borghino (APA)
      - Ian McDonald (Simpsons)

      11.00 am Break

      11.15 am
      Australasian Performing Rights Association,
      Australasian Mechanical Copyright Owners Society
      (APRA|AMCOS)
      - Mr Richard Mallett, Head of Revenue

      12.00 pm
      CHOICE
      - Mr Matthew Levey, Head of Campaigns
      - Ms Katrina Lee, Strategic Policy Adviser
      - Mr Madison Cartwright, Campaigns
      Coordinator

      12:45 pm Lunch Break

      2.00 pm
      Australian Retail Association (ARA)
      - Russell Zimmerman, Executive Director

      2.45 pm
      Communications Alliance (CA)
      - Mr John Stanton, CEO

      3.30 pm Adjourn

    2. AJ
      Posted 30/07/2012 at 3:23 pm | Permalink |

      Yes I am sure the 2 people in Singapore maintaining servers get paid much more than thousands of local staff.

    3. Posted 30/07/2012 at 3:25 pm | Permalink |

      What a crock from the AIIA. Why should we regard the AIIA as a representative “peak body”
      if they keep parrotting the line that Australia’s operating environment is different, therefore
      Australians should always expect to pay a *lot* more for the same goods?

      Case in point: MSDN Technet subscription. Delivery via *download only*. US price is approx
      50% of the Australian price.

      For the same *bits*.

      Which I have to pay (via my quota) to download.

      To add insult to injury, the price you pay is charged via Singapore so we get stung with an
      overseas currency conversion charge as well.

      If it’s the same *bits*, and no physical media changes hands… WHY should I have to pay
      more than a colleague in the USA?

      The same happens with Adobe, as we are all well aware.

      Perhaps it might have been justified in the past to charge more for download-only
      delivery, when we didn’t have as good connections to the rest of the world *and* if
      we downloaded from a local vendor’s server. But “in the past” is now at least 8 years
      ago, and the vendors use CDNs to reduce their costs.

      Welcome to the mid-2000s, AIIA.

    4. Adam
      Posted 30/07/2012 at 3:30 pm | Permalink |

      I personally love how so much of what they say has no meaning. Many of these companies don’t have Australian support teams, so cost of Support isn’t a factor. Many of them operate their stores on worldwide CDNs like Akamai, which means the cost should be the same regardless of where they’re selling. The cost fo developing the software also has nothing to do with it costing a different amount in a different locale.

      Consumer protection laws are about the only thing that could possibly have an effect on the prices, but I’m not sure how that equates to a 70% markup if you’re assuming their software/product works and doesn’t require them to refund every second purchase.

      I love how they advise that it’s all down to the channels as well, which is weird because if they have channels in the US, the same issues should occur there as well.

      100% on the mark Renai, this is denialism at it’s finest.

      • PeterA
        Posted 30/07/2012 at 9:18 pm | Permalink |

        My favourite thing about the “channels” argument is this. If Adobe sold their product at wholesale cost (lets call it; the American price), I can’t imagine a situation in which insane price competition between Adobes “channel partners” wouldn’t bring the price to near-enough the wholesale price. (it happens with every other consumer electronic device/software in the market).

        Which means that even if you are a channel partner you pay a rediculous wholesale price. There is no “channel partner” fat. This is just Adobe pocketing more cash.

        Well, unless Adobe *require* their partners sell at a huge premium above the wholesale price. Easier to just raise the wholesale price (and nets Adobe more money).

        Any way I think it through all I see is a scam.

    5. Glenn
      Posted 30/07/2012 at 3:51 pm | Permalink |

      I wonder if there are any 100% Australian owner companies in the AIIA.

      Maybe they should call it the FIIA, Foreign Information Industry in Australia

    6. Paul Maynard
      Posted 30/07/2012 at 4:34 pm | Permalink |

      OK here’s a “for example”.
      People complain about the price of music on iTunes here vs. the USA.

      But Apples prices I understand are not set by the US music publisher but by the local owner of the music publisher.

      Same deal with books I imagine.

      The only thing you can compare is what Apple charges for it’s products here vs. the USA.

      But the iTunes store is probably littered with country specific protectionism.

      I might be wrong but that’s my understanding of “the market”.

      • Josh Bost
        Posted 30/07/2012 at 10:12 pm | Permalink |

        Hi Paul,

        The problem, at the core, is the publishers setting the price artificially high for no reason. Additionally with iTunes, don’t you find it odd that all titles, regardless of owner, are set at a fixed minimum over the US? (i.e. 99c vs $1.69 – it’s entirely possible a local music owner could WANT to sell it at 99c, but cannot)

        Take Steam for another example. In Steam the publisher of the title sets the price. Support is taken care of in most instances by the same team that supports the US copy. The software is distributed via a community driven CDN, so they pay nothing to deliver the content to AU, and Aussies pay in USD$.

        Games on Steam usually receive less marketing, and the platform as a whole can be used as a small marketing platform if needed – marketing costs might be the only valid reason for charging more, unless they provided dedicated AU servers or dedicated AU support (Even then, putting the support in India where the timezone is close enough is feasible)

        There are, in almost all but a few edge cases in which extra effort has been made to make the Australian experience better, NO extra costs when selling via Steam to Australia, and yet games are often more expensive, though not all, and those who are are usually the same publishers – Which brings up another question: Why all publishers aren’t selling at a higher cost?

        • Will Hughes
          Posted 30/07/2012 at 11:23 pm | Permalink |

          Don’t forget that with Steam, your purchases are technically overseas. So, no Australian protections.

          Don’t believe me? Try to get a refund for a game that doesn’t work (there’s a few on Steam that are shit and actually don’t work as advertised).

          Impossible to actually get a refund – I could dispute the charge on my credit card, but risks Steam locking my account.

      • Trevor
        Posted 30/07/2012 at 10:49 pm | Permalink |

        Quote: “Same deal with books I imagine.”

        No, books are a highly regulated, protected industry. The only way to publish a book in Australia is to print it with one of the major publishing houses. That means a special Australian edition of every book sold in this country, reprinted by an Australian printer with much lower economies of scale, thus much more expensive to print. Its not so surprising that Australian books cost two or three times as much as the UK or US editions, huh?

        The problem is, this now affects eBooks – where the price of eBooks is half or a third the paperback price OS, it could potentially be close to 10% of the Australian shelf price, which is highly embarrassing (and likely to result in such a groundswell of support for the format that it could kill the print publishing industry in under 12 months). To combat this, eBook marketplaces are only allowed to sell eBooks to Australians if they have a correct license for that book, fixing the prices higher and providing the requisite kickbacksImean’license fees’ to the Australian publisher.

        • Bern
          Posted 31/07/2012 at 11:35 am | Permalink |

          Er, no.

          Nearly every single book you find in a local bookstore, if you peel the price sticker off, has multiple prices in different currencies. Depending on the publisher, it might have, say, US$+NZ$+AU$, or GBP+EUR+AU$.

          Most books sold in Australia are printed in the US or south-east asia (usually Singapore). I have on my desk here, a textbook that I bought while I was at uni. It was printed in 1988 (yes, I’m an old fart!). It’s an Australian textbook, written by Australian academics (University of Adelaide), published by an Australian publisher, printed in the UK. The current edition will set me back $51.15 including airmail from the UK – or $161.95 if I walk down the road to the local bookstore to buy a copy there.

          You can’t tell me that shipping & handling *in bulk* for books costs $110 *per copy*…

          Textbooks are probably a bad example, though – I’ve got another one that our lecturer sourced for us for $51 per copy (including freight) – after going direct to the publisher in Singapore. The local bookstores wanted $245 a copy (and that was the “academic/student” pricing!).

          But, e.g. paperback novels are just as bad. My most recent purchase from Book Depository (Iain M Banks’ “Surface Detail”) is currently listed at $5.90 including postage from the UK, or $18-25 here in Australia. http://booko.com.au/products/9781841498959
          As much as I’d like to support the local industry, I just can’t bring myself to pay an extra $10-$20 *per book*. $5 I could live with.
          The pricing here really went stupid around the time the GST was introduced. I was working in the US at the time. When I left in early 2000, paperbacks were typically $10-$14. When I came back 6 months later, they were $18-$25. Since then, the Aussie dollar has more than doubled, but we pay even higher prices today – RRP on paperbacks is approaching $30, while in the US it’s still generally under $10.

          • Trevor
            Posted 31/07/2012 at 1:27 pm | Permalink |

            Really? Sorry, that was the information I had. It appears I was incorrect… I’ll have to figure out why I had that impression.

            Thanks for the correction.

            • Bern
              Posted 01/08/2012 at 11:10 am | Permalink |

              No probs – I could be wrong, too, in that there *may* be some books printed in Australia. Probably not by the big publishing houses, though, I’m sure they go for the cheapest options they can get globally.

      • tom
        Posted 30/07/2012 at 11:57 pm | Permalink |

        It’s even worse on Amazon. The Amazon MP3 music store is a digital-only store like the iTunes store but provides content in MP3 format as opposed to Apple’s AAC format. You would think it’s easy to provide digital downloads across the entire world, even if you do different prices for different markets. For some ridiculously stupid unknown reason I’m not allowed to purchase from the Amazon MP3 store, just because I live in Australia. It’s almost like they (the RIAA) “want” me to pirate their music.

        :/

    7. Caleb
      Posted 30/07/2012 at 4:36 pm | Permalink |

      It’s funny because I when I travel I see products that have been manufactured in Australia (non IT items) which are for sale in US retail stores for less than half of what we are expected to pay here.
      No matter how they spin it we are getting the rough end of the deals as consumers.

    8. SMEMatt
      Posted 30/07/2012 at 7:00 pm | Permalink |

      They would have a point except for one tiny problem there are companies who are based overseas who mysteriously get over the increased cost of doing business in Australia even when they have an Australian distributor and have to ship a physical product and have a list Austrlaian retail price including GST within 5% of the list US retail price. Do you honestly expect us to believe that electronics good developed overseas with support located overseas delivered from the same CDN as overseas from the same website that I am certain was designed overseas has 50% or more higher cost of doing business than the above company with a physical product. I contend the AIIA are liars and should be held in contempt of parliament for lying to the House of Representatives Standing Committee.

      When the wholesale price of goods in Australia is more than the RRP of good in other first world countries there is a problem and it is not the cost of doing business in Australia. There is one very easy way to prove your right and that is to lift export restrictions placed in overseas markets like for example the US. Local retailers could source their goods from where they want keeping in mind it is the retailer who has the burden of consumer protections. I’m once that happens the local channel will get their act sorted.

    9. Posted 30/07/2012 at 7:14 pm | Permalink |

      That is the weakest, most pathetic set of excuses I’ve heard in a LONG time:

      “Goods are not priced to reflect only the cost of producing and distributing them. Goods which are downloaded still have research and development, product development, advertising, marketing, and support costs,” the AIIA CEO said. “The online store is not an automated process without any staff. Staff are still required to build, manage, and maintain the backend systems – so local labour costs are relevant.”

      R&D- Done in the US/eleswhere, NOT Australia. Product Development- Done in the US/elsewhere, NOT Australia. Advertising- Mostly done online, not relevant. Marketing- Mostly done online, not relevant. Support costs- Possibly valid….except most of the call centres AREN’T based in Australia. Online Store- Based in Singapore/Hong Kong/US, NOT in Australia.

      The AIIA said: “Price differentials between ICT product purchased in Australia and similar product bought overseas reflect, among other factors, the different operating environments of countries and also the more robust consumer protection given to consumers in Australia.”

      In other words “Because we have to give warranty for a reasonable life of product in Australia, rather than a statutory 1 year and then it can break, as in other countries, we need to charge more to recover the repair costs when it DOES break in Australia, because we made a crappy, cheap quality product.”

      “Often these people are more highly skilled and are therefore paid more than retail staff in bricks and mortar stores. There are costs involved in advertising and marketing services locally. Regardless of the distribution method of the product – the costs of providing support services remain and need to be accounted for. An additional cost associated with downloadable goods specially games relates to content developed by third parties with their own rights, licensing, wholesale and distribution models.”

      Except the staff of a website is not duplicated for EVERY STORE, there’s only one or two sets of staff around the world for the website, compared to the THOUSANDS of staff for bricks and mortar stores. Licensing is ANOTHER issue entirely- it is not relevant to 50% or more of the submissions made, which were about developers such as Adobe and Microsoft distributing their OWN product.

      “Costs models reflect the specifics of each business model but in any event the cost of a good is only a small fraction of the investment the company has made in developing a product or service,” Campbell said. “The price also reflects the investment by the company in developing its underlying intellectual property.

      In other words, we think, because this product is going to be bought less in Australia, simply because of a smaller market, we can charge more and call it “recouping investment” and people will stomach it.

      “AIIA members report they sell up to 100% of their goods via channels,” she said.

      I don’t know if this Lobbyist group has ANY connection with the real world, but those channels? They almost ALL sell your “licensed products” for significantly more than you do online and that’s WITH your markup. That’s because they CAN’T sell it for less than you do online, for fear of having their license to sell revoked.

      I don’t often get overly angry at rubbish statements from lobbyist groups, but that, quite simply, is the biggest load of bullshit I’ve heard in quite some time.

      I hope this inquiry slaps them in the face.

      • Trevor
        Posted 31/07/2012 at 10:58 am | Permalink |

        Damn you, 7_T! You’ve gone and done my analysis for me ;-)

        Seriously though, 7_T is on the money here (again) – there are so many factual holes in these statements you could fit a small displaced refugee nation through them… Because of that, I think it’s probably worth throwing my 2c into the fray.

        “Goods are not priced to reflect only the cost of producing and distributing them. Goods which are downloaded still have research and development, product development, advertising, marketing, and support costs,” the AIIA CEO said.
        This woman needs to go back to business school – R&D is a production cost, product development is, err, the ‘D’ in R&D… but anyway, it’s a production cost, advertising is a marketing function, so again I’m not sure why they need to be listed separately, but marketing could broadly be classed as a distribution cost (although product design and packaging are Marketing steps which are included in the production phase).

        However, she’s right about support. After-sales support is, indeed, neither a production or distribution cost. Well done, love.

        “The online store is not an automated process without any staff. Staff are still required to build, manage, and maintain the backend systems – so local labour costs are relevant.”

        Err, most online ‘stores’ are an automated process. That’s kind of their point. If you need staff to process online orders on a one-to-one ratio, you should have saved yourself the time and expense and just operated a call-centre.

        Let’s just agree that some online store processes are automated, but you still need staff to ‘build, manage and maintain the backend systems’, mmkay? So, what you have here is a drastic reduction in your operating costs, and truly massive economies of scale. Say you’re, oh I don’t know, Adobe. And your online store cost a million dollars to develop and deploy. And it costs a further $200,000 a year to maintain. Ouch, right? No. The only reason you (as Adobe, or any other reasonably competent company) would spend that kind of cash on your eStore is if the result was a reduction in existing overheads for your sales system. If the costs of such a system to a large, established business like Adobe were anything like half a percent of revenue on sales made just through their online ordering system, I’d be surprised. Online sales cost large, well established companies virtually nothing as a percentage of sales. Online sales systems are so amazingly inexpensive to develop and maintain they remain the only direct-to-consumer channel most vendors maintain – bricks and mortar, physical shipping and even physical inventory are areas left to their distribution partners. Vendors only do online because the cost to them is virtually nothing.

        Let’s get back to the original statement: “…so local labour costs are relevant.” Woah! Back up a step, lady. Where did that tremendous assumption come from?? Let me see if I’m following – because a vendor has commissioned an online store, he has labour costs for development, and then labour costs for maintaining and updating the store (you know, new products have to be added from time to time), and engineers need to be paid for keeping the site alive (getting tenuous now – you’re almost certainly paying another company for hosting, but even if you have your own in-house server, how much attention does it get from an engineer on an annual basis? One day per-annum, all told?), please explain at what point there is any participation by an Australian? You’re talking about vendor developed, maintained and hosted stores. About the only time Australians get involved is when Australian distributors or suppliers point a customer to said store to buy something. But that’s not a local labour cost to the vendor, it’s a local labour cost to the Australian channel partner, which affects the sale price of the digital download copy from the online store not one (digital) bit.

        “Price differentials between ICT product purchased in Australia and similar product bought overseas reflect, among other factors, the different operating environments of countries and also the more robust consumer protection given to consumers in Australia.”

        Yes, Australian consumer law puts the onus of producing high quality products on vendors, however I can think of no vendor operating in the Australian market who redesigns their products specifically for the purpose of meeting quality standards here. So if they’re not changing their product, where is the increase in cost? Because of an increase in support costs due to local laws requiring you to support your products for longer? I would be very interested in seeing supporting documentation for that, because I’d be willing to bet a substantial sum that vendors have very few support claims outside their standard warranty that they are obliged to honour due to Australian consumer law. Very few people even understand these laws and their subsequent rights, let alone how to pursue a manufacturer for a claim.

        “Often these people are more highly skilled and are therefore paid more than retail staff in bricks and mortar stores. There are costs involved in advertising and marketing services locally. Regardless of the distribution method of the product – the costs of providing support services remain and need to be accounted for.”

        If you’re a large vendor (such as being discussed in this inquiry) you have international support services. Sure, a certain volume of their workload is due to Australian consumers, but the justification for substantially higher costs of the product is the higher costs of doing business in Australia. So, please explain how support services for Australian consumers are somehow more costly than providing the same level of service from the same international call centre as provided for your products to the rest of the world?

        “An additional cost associated with downloadable goods specially games relates to content developed by third parties with their own rights, licensing, wholesale and distribution models.”

        (I think you mean ‘especially’, here.) In this instance, third party developers have products that sit on top of other platforms, that have their own ‘rights, licensing, wholesale and distribution models’. Right, with you so far. So, if you have third parties developing their own add-ons, why don’t those third parties have their own pricing structure, as well? If they have their own distribution, how is that in any way related to the local price of the platform application? The answer is, it’s not; your argument makes absolutely no sense in the context of this discussion. Try again.

        “Costs models reflect the specifics of each business model but in any event the cost of a good is only a small fraction of the investment the company has made in developing a product or service,” Campbell said. “The price also reflects the investment by the company in developing its underlying intellectual property.”

        I have no argument with this statement in and of itself. However, yet again, it fails to address the actual issue at hand – the price disparity between regions (specifically with relation to Australia). Your pricing model accounts for costs to the company in developing not just the specific product, but the R&D that went into underlying technologies and IP. Sure. But, doesn’t the pricing model in the USA also account for these costs? Are you saying the Australian product has additional R&D and underlying IP that isn’t present in the US model? If that’s the case, why are the products functionally identical? If they are physically and functionally identical, it follows that they use the same technology, the same underlying IP. And if you can sell this product in the US at a price that allows you to recoup investment costs, manufacturing costs, marketing and distribution costs and provides a nice, healthy profit margin on top, then it follows that you should be selling the product in Australia for the same price plus additional costs such as shipping and distribution above and beyond what it costs to get those products onto US shelves (given everything comes from China, this is close to a zero dollar difference per item) and duties, tarrifs and taxes (plus 15%).

        “AIIA members report they sell up to 100% of their goods via channels,”

        And there’s the rub. I predict that the channel partner network is going to turn out to account for the majority of this price disparity between regions. How can it not? If you’re selling widget A in the USA and Australia and the cost of widget A remains identical, but in Australia you add two or three additional layers of business between the manufacturer and the consumer, of course the price will go up.

        But the only way the price disparity can substantially and effectively be addressed will be to criminalise the practice of exclusive distribution agreements and not just allow, but encourage what is currently called parallel importing. You need to flatten the channel as much as possible. You will also need pricing controls to ensure manufacturers and vendors aren’t unfairly gouging all local wholesalers/distributors, which certainly happens.

        Once you have Australian wholesalers and retailers competing at the same level as their international counterparts (ie access to the same pricing at the same level of distribution) then you will see similar retail prices, and at that point it is no longer necessary to protect channel partners from reduced online prices – you can sell your online store products at the same price worldwide, without damaging channel partner business.

        • Trevor
          Posted 31/07/2012 at 11:08 am | Permalink |

          Oh, one final point. There is now an absolutely massive elephant in the room that blows the roof off all these excuses being routinely rolled out by the industry. If Apple can manage to sell their overpriced product portfolio at what essentially amounts to price parity with the US, then what possible argument can any other manufacturer field? Apple has exclusive distribution agreements, Apple use the same distributors and channel partner network that many other major manufacturers use, and yet they can suddenly afford to get products on shelves at the same retail price worldwide. Apple have handed Australian consumers an absolutely gargantuan weapon in this fight, so now it falls to legislators and journalists to turn their unflinching gaze onto the rest of the industry and ask, “If Apple can do it, why can’t you?”

    10. Goddy
      Posted 30/07/2012 at 11:16 pm | Permalink |

      I expected nothing less. What a laughably disgraceful attitude. Don’t want to piss off your multi-national overloads, aye AIIA?

      I hope Ed Husic tears them all a new one. Hell if they don’t deserve it for treating Australian consumers like idiots.

    11. Goddy
      Posted 30/07/2012 at 11:20 pm | Permalink |

      By the way, Crikeys! Bernard Keane has written a hilarious article on this subject:

      http://www.crikey.com.au/2012/07/30/price-gouging-its-all-about-consumer-convenience-see/

    12. Muso1
      Posted 31/07/2012 at 9:31 am | Permalink |

      As a professional musician I can see no excuse for either Apple or Amazon’s policies.
      Please, I would like to see the tech industry called to account, and not have blame passed on to local producers (Paul Maynard). Apple have proved time and time again it can bully any content creator into accepting Apple’s pricing policies. This is ALL about Apple charging Aussies up to 90 cents more for songs, across the board – which can NOT be explained by local costs such as employment conditions or GST.
      I see the Australian Performing Rights Association appeared at the hearing. I sincerely hope they didn’t seek to defend Apple and Amazon.
      Actually hardware sellers, such as Harvey Norman and many music instrument stores have reduced prices to reflect the strong Aussie dollar. And the tech industry such as Adobe, Apple, Panasonic, Sony and Microsoft have sought to keep prices as high as they can get away with.
      I saw an enquiry representative interviewed on ABC lunchtime news and he decried Apple’s negative attitude to the enquiry.

    13. Paul Maynard
      Posted 31/07/2012 at 2:19 pm | Permalink |

      Attn Muso1, My point about the local music publishers related to when the Beatles product initially appeared on iTunes. The local price was twice the US price and it’s not like the product hasn’t recovered it’s costs yet.
      New material on iTunes is often priced higher than older material so the 99cent trauma does not apply to all. I don’t have a problem paying more for any new material but I object to regional based price differences particularly when there is not physical media to ship and the customer is paying for the delivery.
      Amazons pricing is aimed at capturing market share, the hue and cry over their practices is loud and clear so they’re a special case.

      • muso1
        Posted 01/08/2012 at 11:50 am | Permalink |

        I object to local price hikes too. I’m saying blame Apple, not the local music industry.
        The local music industry has nothing to do with Apple setting iTunes prices for The Beatles catalogue.
        Apple have a lot of power when it comes to setting iTunes pricing.

    14. Stephen
      Posted 31/07/2012 at 3:57 pm | Permalink |

      It’s because software developers have to add Australian Language support. Oh wait – how many of these companies expect us to use UK or US English?

      How is the AIIA even permitted to pretend to represent Australian producers, publishers or consumers? Shouldn’t they be called Someone Else’s Information Industry Association? They’re not representing any Australians with their “local conditions” garbage.

      • Trevor
        Posted 31/07/2012 at 6:46 pm | Permalink |

        They’re called ‘Australian’ because they operate in Australia. The connection with Australian companies is inferred, not a necessary condition.




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