Apple profits, Australia loses out.

Filed under: music industry, rants & opinions

The Sydney Morning Herald (who are usually quite pro-Apple) takes a look at the price difference between Apple’s digital music downloads in the US, and the inflated prices their Australian customers pay.

IT gadget company Apple singled out the Australian market for an honourable mention while announcing its record quarterly profit of $3.8 billion. A pat on the head for our increasing i-with-everything habit is the least we should expect given the on-going iTunes rip off.

With Apple to announce another major i-product tonight – a “slate” e-book reader/video viewer/iTV/web watcher/personal vibrator/whatever – Australia’s love affair with the brand continues to lock customers into Apple software.

And the cost of that is nowhere more obvious than the massive iTunes store, the world’s biggest digital music shop which routinely charges Australians 40 per cent and more than it does Americans. And that’s after allowing for the addition of the 10 per cent GST to the American prices.

Even for something as universal as the Hope For Haiti Now fund raiser album, Apple charges Americans just $US7.99. With the current dip in our exchange rate to about 90.5 US cents, that’s $8.83 in local coin. Adding GST would make it $9.71, but Apple slogs Australians $13.99 for the thing – a 44 per cent mark-up on the US price. Or 44 per cent rip off, depending on your point of view.

This has always been a bugbear for me, and one of my main arguments for why music piracy exists. A product is released in multiple locations, and instead of pricing them equally, the price is elevated in areas where there is no competition. As soon as competition arrives, then the price suddenly becomes competative.

“Supply and demand” I hear you say? Well if the demand is there, and it can’t be supplied at a fair price… I can see why people will take the easy (and cheap/free option) and obtain the product – albeit at a reduced quality – online via filesharing sites.