Aus Gov't report advises banning geoblocking

[darryl]

Originally Posted by HarryT

Thanks, darryl. That's a lot more moderate and sensible than some of the reports of it we've had reported here.

Agreed, It is very easy to get carried away. Countries have the power to legislate on a so-called "extra-territorial" basis but of course must deal with the fact that such measures are in a practical sense unenforceable for the most part and also impinge on the sovereignty of other nations. It is better for them to look at more practical measures to achieve their goals to the extent possible. Both the Harper and House of Representatives Committees have in my view demonstrated a degree of common sense not always apparent in these types of enquiries.

[HarryT]

Originally Posted by darryl

Agreed, It is very easy to get carried away. Countries have the power to legislate on a so-called "extra-territorial" basis but of course must deal with the fact that such measures are in a practical sense unenforceable for the most part and also impinge on the sovereignty of other nations.

Precisely. An excellent example of that is that fact that EU tells people in other countries that, if they sell goods to people in the EU, VAT should be charged, which should then be passed on to the appropriate government, but as a matter of practicality they have no means of compelling any non EU-based company to charge VAT.

[darryl]

Originally Posted by HarryT

I completely agree with your sentiments in principle, but the practice is something else entirely.

You are quite right, Harry. Under the "old" system, such worldwide rights would be prohibitively expensive, and rights-holders are of course going to cling to this as long as they can. I believe they will be forced to adjust as the purchasers of regional rights receive less and less value for their money. For example, Foxtel here recently purchased exclusive rights to broadcast "Game of Thrones". At the moment, this is probably still worthwhile. However, the more Australians choose to circumvent geo-blocking, the less valuable such rights become. I think the Reports referred to contemplate this effect to at least some extent in, for instance, encouraging consumer education on geo-blocking.

[gmw]

Originally Posted by HarryT

Geographical restrictions are often a matter of contractual obligation, not "ripping people off". Eg, if an author has only sold a publisher the right to sell a particular book in, say, the UK, the publisher is not allowed, under the terms of the contact they've signed, to sell that book to someone outside the UK.

Contractual obligations are about where a publisher is permitted to make the book available, I am not aware of authors requiring that a publisher should sell the book at a premium in some jurisdictions. As far as I know, that is a decision made entirely by the publisher. There is no extra cost justification (that I am aware of) for the high prices of books (especially ebooks, but also print) in Australia (beyond the GST). The "ripping people off" part of my post referred to the retail prices applied by publishers with rights to sell here in Australia - I do not see their contractual obligations having anything to do with the premiums they are charging.

[fjtorres]

Originally Posted by gmw

I do not see their contractual obligations having anything to do with the premiums they are charging.

Not trying to be snide, but do you know what your local publishers pay for book rights compared to their US counterparts?
I don't but I doubt it is only 6% of what the US publishers pay. Yet they have to recover their overhead and fixed costs and make a profit off a market that is one sixteenth of the American market.

I agree that the system of regional rights must go but turning US rights into defacto global ebook rights *for free* simply puts money into the pockets of the Manhattan gang at the expense of authors everywhere and local publishers. Now, the local publishers really should be looking to serve local authors by marketing *them* globally and they should be encouraged to go that way. But until they do, their survival is tied to those licenses. Undercut them and you undercut them.

Now, I don't particularly care what happens to individual publishers but I do know that when you blow things up blindly the outcome is rarely what the bomber intended. And politicians are the very definition of blind bombers.

It'll be interesting to see what happens if the politicians do carry through this agenda.
I'm thinking bulls and china shops.

[burnafterreading]

Originally Posted by fjtorres

Not trying to be snide, but do you know what your local publishers pay for book rights compared to their US counterparts?
I don't but I doubt it is only 6% of what the US publishers pay. Yet they have to recover their overhead and fixed costs and make a profit off a market that is one sixteenth of the American market.

I agree that the system of regional rights must go but turning US rights into defacto global ebook rights *for free* simply puts money into the pockets of the Manhattan gang at the expense of authors everywhere and local publishers. Now, the local publishers really should be looking to serve local authors by marketing *them* globally and they should be encouraged to go that way. But until they do, their survival is tied to those licenses. Undercut them and you undercut them.

Now, I don't particularly care what happens to individual publishers but I do know that when you blow things up blindly the outcome is rarely what the bomber intended. And politicians are the very definition of blind bombers.

It'll be interesting to see what happens if the politicians do carry through this agenda.
I'm thinking bulls and china shops.

population of a country is not the same as the market in that country. the market is a subset of a population and depends on a ton of factors. like, for example, there's a tiny and probably non-existent market for "learn to speak chinese in only 30min a day" within mainland china despite a 1B population, but a much larger market for the exact same book in the USA (as an example) despite the USA having only 1/4th the population.

[Fbone]

Has there ever been a government study to determine why Australian media companies charge "premium" prices?

[j.p.s]

Originally Posted by fjtorres

It'll be interesting to see what happens if the politicians do carry through this agenda.
I'm thinking bulls and china shops.

Well, as darryl wrote in post #27 above:

it may well be prudent to moderate your own practices before Governments do so.

Not that there are many businesses anywhere in the world that have a good track record in that regard.

[fjtorres]

Originally Posted by burnafterreading

population of a country is not the same as the market in that country. the market is a subset of a population and depends on a ton of factors. like, for example, there's a tiny and probably non-existent market for "learn to speak chinese in only 30min a day" within mainland china despite a 1B population, but a much larger market for the exact same book in the USA (as an example) despite the USA having only 1/4th the population.

The relevant market here is "buyers of commercial books for entertainment", not "learning mandarin as a second language" so unless the fraction of readers in the australian population is 16 times bigger or buys 16 times more books than americans or brits the local market will be closer in size to the New York metro area than the US as a whole. And the economies of scale will favor the Manhattan gang.

The two cultures and economies are not as different as China (or India, a better example) vs the US.

Exit: The system needs reforming but without reform, merely squeezing the local suppliers is going to have unexpected repercussions.

[burnafterreading]

Originally Posted by fjtorres

The relevant market here is "buyers of commercial books for entertainment", not "learning mandarin as a second language" so unless the fraction of readers in the australian population is 16 times bigger or buys 16 times more books than americans or brits the local market will be closer in size to the New York metro area than the US as a whole. And the economies of scale will favor the Manhattan gang.

The two cultures and economies are not as different as China (or India, a better example) vs the US.

Exit: The system needs reforming but without reform, merely squeezing the local suppliers is going to have unexpected repercussions.

ok, so now take the one specific book example and go up to the 10,000-foot view. in a country that's focused on video consumption like the US, the market for books of any kind might be a lot less than in Norway for example. i'm not saying that all americans are illiterate and can't be bothered to read, but a pure population number is no indicator of the actual market for any specific industry (other than basic necessities like food, clean water, and shelter)

so, even though Australia's population is 1/14th of the USA, the market size for books could be as high as 1/4th if Aussies are more literate and more culturally developed.

http://en.wikipedia.org/wiki/Total_addressable_market


and it's been known for YEARS that the reason prices are higher in AU than US is because... well, they can be. the Aussies have no alternatives that are nearby and they're physically isolated, so it's easier to "justify" charging them a higher price.

the price often has very little to do with the cost. usually it's higher, sometimes it's even lower, and it's almost always as high as possible given the market size.

[fjtorres]

Originally Posted by burnafterreading

and it's been known for YEARS that the reason prices are higher in AU than US is because... well, they can be. the Aussies have no alternatives that are nearby and they're physically isolated, so it's easier to "justify" charging them a higher price.

There are plenty of places in the US that are physically isolated and face higher prices. Because it is actually more expensive to get the products there. (Been there, lived with it. UPS isn't always cheap.) And that is assuming you *can* get them. There are places were Amazon prime only offers free shipping instead of free 2 day shipping. And it is much appreciated anyway.

Likewise there are cultures and subcultures that face higher prices because their products are niche or outside the mainstream.

High prices are not always gauging.

[speakingtohe]

In early 1990's I bought a Terry Pratchett book that was 3.99 Cad, 4.99 UK pounds and 7.99 Australian dollars (on the spine). Both UK and Australian currencies were worth a lot more on currency markets than CAD and wages were not that much higher that I could determine. I thought good grief, those poor people. These were paper books so perhaps paper was exorbitant in UK and Australia.

Helen

[burnafterreading]

first, electronic goods don't cost more than a fraction of a penny to send either next door or across the globe.

physical goods cost a bit to send, but the cost of shipping a widget has little to do with the selling price of the widget (we're talking bulk transport from factory to distribution, like for example Gibson guitars being shipped to the AU distributor). shipping from the USA to Hawaii is typically just as costly as to AU, since they're both just as far away and across an ocean. but few things are made in the USA anyways - now it's all mostly made in China. from China, shipping to USA is just as far and "complex" as shipping to AU.

so, why does it cost more in AU than in USA to buy the same made-in-China product? because it CAN be priced higher. basic business: maximize your profits.

at times it isn't even a question of distance, but mindset. canada is not that far from the USA. i think the border is only like 30ft wide. anyhoo, when WalMart comes to canada, they apply their US-based pricing mindset, which is lower the price but sell in higher volume, and result in more total revenue. flip side is when Canadian Tire attempted to expand to the USA, they stuck to their canuck pricing model which is to charge as much as possible even if that means less people would buy - the end result is that revenues were tiny and CT abandoned the operation. transporting widgets across the Canada-USA border is no more costly than from NY to TX.

you (are asked to) pay more because you will (despite some complaining) pay more.

[jehane]

Originally Posted by AnotherCat

While books can be parallel imported into NZ, both commercially and privately, as far as I can see it has not had much effect on the pricing of books in physical shops but has made a big difference for online purchases through local and overseas web sellers. Physical shops complain that the cost of books to them from the publishers can be higher than the retail price being offered by parallel importers (parallel imports have to be, of course, legitimate copies) so it would seem that it may be the publishers who are being inflexible.

Interesting. Are they still going through local publishers or are they able to source from foreign publishers? Though if the books are published under one publisher using different local imprints I can see where this might make no difference.

Originally Posted by Fbone

Has there ever been a government study to determine why Australian media companies charge "premium" prices?

It's not just media, it's everything. Known locally as the "Australia Tax".
IT products
Books
It is worth noting that the government of the day pretty much ignored the recommendations of the book import review, so it remains to be seen whether this report just disappears into a black hole. In its favour is that the major companies involved are not Australian so they don't have the political leverage that the publishers had.

Originally Posted by fjtorres

There are plenty of places in the US that are physically isolated and face higher prices. Because it is actually more expensive to get the products there. (Been there, lived with it. UPS isn't always cheap.) And that is assuming you *can* get them. There are places were Amazon prime only offers free shipping instead of free 2 day shipping. And it is much appreciated anyway.

Likewise there are cultures and subcultures that face higher prices because their products are niche or outside the mainstream.

High prices are not always gauging.

Sure, but those are not the products we are complaining about. Now explain the price differentials for the same electronic product delivered digitally, ie ebooks, digital music, software, etc.

[jehane]

Originally Posted by burnafterreading

so, why does it cost more in AU than in USA to buy the same made-in-China product? because it CAN be priced higher. basic business: maximize your profits.

you (are asked to) pay more because you will (despite some complaining) pay more.

Precisely. The way pricing works is not a case of cost+markup. Prices are set according to what the market will bear (ie what people will pay) and if that is a profitable price then it's a viable business. If you can convince people to spend $1000 on a widget that costs $1 to make, that's good business. If you can only get them to pay 50c, then it's not. For those who remember the transition from cassette tapes to CDs, cassettes cost a lot more to make but CDs were far more expensive (at least in Australia...no internet price comparison in those days!!) But because CDs were the new tech and reputedly higher quality then consumers were prepared to pay more.

Unfortunately for the producers and fortunately for consumers we now have the ability to compare prices around the world. I also feel that Australians have a stronger tendency to feel ripped off and discriminated against in this sector, and more willing to do something about it compared to the US (can't comment on other countries). This is reflected in our high rates of online piracy.