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Apple blames rights holders for high Australian prices

James Hutchinson (via AFR) | March 22, 2013
Consumer electronics giant Apple has blamed music labels and rights holders for charging Australians higher prices on music, movies and television shows compared to other markets.

Apple blames rights holders for high Australian prices

People wait in line outside of Apple store in Sydney ... Apple’s Tony King told a parliamentary hearing on Friday that the price it charged for content in Australia differed because of the wholesale prices set by content rights in negotiations between the companies. Photo: Ian Waldie

Consumer electronics giant Apple has blamed music labels and rights holders for charging Australians higher prices on music, movies and television shows compared to other markets.

In a rare public appearance, Apple Australia managing director Tony King told a parliamentary hearing on Friday that the price it charged for content in Australia differed because of the wholesale prices set by content rights in negotiations between the companies.

Mr King said that, apart from the Goods and Services Tax applied to content and hardware in Australia, the costs of running the iTunes Store were broadly similar in the US and Australia, and that fluctuations in currencies were not a major factor in the cost of content. He also said he believed that publishing fees applied by industry bodies to content were broadly similar across markets.

In contrast, however, he said the wholesale price for a song sold by Apple and competing digital music providers was set by the rights holders.

"That is a matter that is controlled by the rights holders and I don't have insight as to how they run their businesses or the unique costs they may incur for running their businesses in Australia versus the US," he told the committee.

The committee is inquiring into pricing differences for technology hardware and software between Australia and global markets.

"In Australia [rights holders] have often set a higher wholesale price than the price of similar content in the United States," Mr King said. "In this digital age, the content industry still runs with perhaps old-fashioned notions of country borders or territories or markets.

"When we brought the iTunes store to the market almost 10 years ago, our business model was to strike this balance between a fair return for the content owner or indeed the artist and a price that consumers felt good about."

Mr King said he would "love to see lower content prices available for Australian consumers, be it for songs, movies or TV shows. That would drive a wonderful use of our products within the Australian market."

Consumer body CHOICE has previously pointed to a 70 per cent spike in the price paid for albums such as AC/DC's Back in Black on the iTunes Store in Australia compared to the US store.

 

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