Vendors responsible for ‘Aussie Tax’: Choice
Call of Duty: Modern Warfare 2 wins the gouge-fest
Australian consumer group Choice has pointed the bone at vendors for the infamous “Aussie tax”, in a submission to the Parliamentary Inquiry into IT Pricing.
Having studied the price of software, hardware, downloads and games in the Australian market, Choice has noted that Microsoft seems to want Australian developers to call by and say "hello": it's cheaper to buy a ticket to America and pick up a copy of Visual Studio 2010 Ultimate for $US11,899 than to buy it in Oz for more than $AU20,000.
While acknowledging that there are differences in taxes, wages, rent space, margins and logistics between countries, Choice’s submission singles out international price discrimination as the “most likely cause of Australia’s high IT prices”.
“As this increases the cost of retailers’ purchases (wholesale prices), it has a greater impact on retail prices”, Choice states.
In a recommendation likely to be fiercely resisted by rent-seekers in the industry, Choice calls on the government to educate consumers about “their right to access legitimate parallel imports from foreign markets” – at a time when local chennels are trying blackguard this practice with various campaigns against “grey markets”.
For example, last month retailer JB Hifi apparently abandoned its attempt to run its own parallel operation, redirecting its JB Hifi Direct Website back to its home page and pulling ads for the “parallel” products. The company has stayed mum on the reasons for the change, but at the time, both Canon and Nikon made veiled threats about retail relationships.
On average, Choice says Australians pay 52 percent more than American consumers for iTunes downloads, based on an analysis of both singles and albums (we can, however, pick up a couple of steals: if your taste runs to downloading Don McLean’s American Pie, or Billy Joel’s Piano Man, they are respectively 12 percent and 1 percent cheaper than in the US).
In the notorious games market, Call of Duty: Modern Warfare 2 was the standout, marked up by 342 percent over the US price; in a sample of ten games, the average gouging was 232 percent.
If we buy software rather than pirating it, we pay 34 percent over-the-odds on average (with some Adobe products surprisingly cheaper here than in the US at the time of the Choice sample), and a sample of Wii games averaged an 88 percent markup (compared to a UK-US price differential of just 26 percent). Finally, a sample of Dell hardware revealed a 41 percent markup.
Apple gets off lightly, by comparison, averaging just 12 percent higher hardware prices in Australia than in the USA. This is so close to Australia’s 10 percent GST that Choice notes prices are more-or-less in parity between the two markets.
Choice tested the widespread argument that Australian retail rents account for the price difference by looking at the differentials for software products, and found that the price differentials for online stores with no shopfronts (48 percent) were nearly identical to the recommended retail price differences for the physical products (49 percent). ®
the problem with digital online distribution
I have refused to buy most digital content online when it is priced the way it is and is restricted the way it currently is.
Why anyone would buy a movie on say the PSN network (which has higher compression, is DRM protected to only play on your one brand of device as well as costs you your own bandwidth to download) instead of spending LESS money and buying a physical Blu-ray disc (which isn't as compressed, which you can take and use anywhere as well as actually re-selling it when you're finished with it) surprises me as the only current advantage to "digital-online" seems to be the "speed of delivery" which in itself requires you to be already paying a decent monthly sum for your internet connection.
It is a shame because all this online digital delivery could have benefitted both the sellers AND the end customers but the way the sellers decided to price things the only one who it really ends up helping is the seller. The end customer is often actually worse-off buying digitally online especially when you consider DRM and the second hand re-sale market completely disappearing/not even an option for goods bought digitally.
It is also a shame because the digital download model DOES actually work in many cases, I have bought plenty of software online, direct from the developers (usually smaller developers) who are more than happy to charge me the same price as their US customers, I'm glad that I'm not being ripped off for simply being 'outside' of the US, but I'm even gladder to see 100% of my money go direct to the developer and not some middleman retailer who adds nothing to the product outside of controlling its availability.
Re: It is obscene
When this stuff happens my usual think is to pay nobody. You're obviously not going to pay the 70 and the 30 can die just for the price difference.
If every consumer behaved like me the world would so much be a better place.
Adobe products the same price or cheaper in Australia!!!
Man I'd love to know which ones, cause they're certainly not the ones I use and require on a daily basis. Those ones have a huge "Australia tax" on them locally.
The only Adobe products I can think of which cost the same here as in the US are PDF reader and Flash player...cause they're both given away FREE like a virus.
I'd guess the "cheaper here" Adobe products are probably something already cheap/simple like Lightroom, but for the most part, the actual products that Adobe make most of their "bread and Butter" on (CS packages) are vastly overpriced locally in comparison to the US no matter how Adobe PR or research firms like to spin it.