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Adobe To Australians: Fly To US For Cheaper Software
angry tapir writes "It's been a long-running joke that it's cheaper for Australians to get a plane ticket to the U.S. if they want to buy Adobe's Creative Suite instead of paying local prices. But appearing before a parliamentary inquiry into the disparity between IT prices in Australia and elsewhere, Adobe's local chief appeared to suggest just that."
Other companies gave their responses to the inquiry as well. Microsoft said they'll simply charge what the market will bear. Apple tossed out a host of reasons for the price difference; its retail partners, digital content owners, exchange rates, taxes, import duties, and an apparent inability to alter the price set by its U.S. parent company.
I don't know if this applies to software, but I know that music and movies have been seriously hindered by archaic regional licensing agreements going back to the days when physical media was the only means of distribution. It's why a certain DVD may be available in a certain region at price x, while completely unavailable or at a different price in region y (with a different distributor or even with a completely different edition of the movie/song). This old system has become a HUGE annoyance in the modern streaming era, particularly if you're trying to watch Netflix outside the U.S. (since those movie licensing agreements are still such a goddamned mess, even in an era when streaming crosses every old national and regional border). It's also why I have to import my blu-ray of "More American Graffiti" from the UK instead of being able to buy it here in the U.S.
This may also explain why these weird prices apply specifically to the standard physical boxed sets of Adobe products, and not the newer cloud versions or student editions (as per the article). It may also explain why Adobe is so reticent to talk about it. If they have some long-standing regional licensing/distribution agreement in Australia, they may be reluctant to bad-mouth their local licensees/distributors (who have jacked up the retail prices for whatever reasons).
Your political party doesn't care about your rights and only represents corporate interests.
And you think the company wouldn't pass that cost along to the customers?
If this was so easy, couldn't you call a 'friend' in the U.S. and make them mail you a copy?
There has got to be more to this than that.
It's just so darn expensive to rewrite all the software upside down for Australia and the rest of the southern hemisphere. That's the entirety of the additional cost!
If my knowledge of Australia is any indication, they're not socialist. They're either a vast wasteland where people in dune buggies fight over gasoline, or the place where young Einstein learned to party. One of those. Either way, I know they all carry VERY large knives.
Your political party doesn't care about your rights and only represents corporate interests.
Longer warranties, import taxes and sales taxes are just costs of doing business. And costs of doing business are passed along to the customer. Did you really expect a commercial company to let higher costs eat into their profit margin? If taxes are being raised, prices go up. If legislation is passed that makes it more expensive for companies to operate, prices go up.
Adobe is just being greedy.. that's all.
Except of course GST is 10% which is actually less than sales tax in some US states, import taxes on software are, to the best of my knowledge, virtually non existent, and for all the consumer protection laws here, our software warranties are absolutely identical to those of the US. In some instances(Steam for instance) the company doesn't even have a physical presence here.
Even if all those things actually added dramatically to the cost, some of these products are in excess of double the US prices while our dollar is actually worth more. The honest truth is that every single companies real answer is the same as Microsoft's, the Australian economy is doing quite well and a long history of significantly lower exchange rates has made Australians accustomed to substantially higher prices. Customers are willing and able to pay a higher price and so companies charge them a higher price.
I still don't understand why a game that costs $50 in the US should cost 50 euros in Europe.
UK customer don't seem to be affected by these strange currency conversions.
They can charge what they want to with pretty much no competition. Why not fire up a kickstarter campaign to add whatever features are missing to their open source competition? Maybe it'd be cheaper to hire some programmers to do that, as well. Especially since that could be a project funded and worked on globally.
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
In case of Adobe and Microsoft it certainly does not. And they both admitted as much.
With regards of Apple it isn't as simple. Their hardware isn't much more expensive as in the US and the difference can be explain fairly easy by taxes and increased costs of doing business.
The iTunes store is a while different matter. Apple has to license the content from local copyright holders and prices are set by those local companies.
For example take a song created by an American artists. The American record company holds all rights to the song, but exclusively sub-licenses it to a local Australian company for distribution in their local market. If Apple wants to sell that song, it has to deal with the American record company for distribution in the U.S. and deal with the Australian company if they want to sell it in Australia. And the Australian company wants more money from Apple which leads to higher prices.
Most likely the Australian company is owned by the American record company, so guess where all the profits go to...
In my experience Adobe software is more expensive outside the United States in general. It's understandable in Europe where they've got 20% VAT, in addition to a ton of other tariffs. But in Australia their VAT is 10%, considered one of the lowest in the world; I suppose, except for the US which has none. There may be import duties that are not being mentioned here, but it still wouldn't explain why the software is $1000 more expensive than in the US.
However, I've noticed the trend elsewhere, including where I worked in Taiwan. Where Adobe software was considerably more expensive. It was ironic considering how rampant piracy was there. In our case we went through grey market channels, where someone purchased a bunch of copies in the US and resold them there. That or we'd get someone in the States to buy us a copy. Either way, we definitely weren't rushing out to buy the latest versions. So if anything, Adobe was discouraging sales.
There was a lot of weirdness. Some software was cheaper than in the US. But then electronics were barely on par, and in some cases even Taiwanese-made laptops, for example, were actually cheaper than you'd find in the US. I do know that companies were levied various taxes and tariffs so that may have accounted for some of it.
As far as I know, Australia's median income isn't higher than the US. So it seems that for whatever reason Adobe is gouging them. That said, good luck finding a plane ticket for anywhere near $1000.
FTFA: "Adobe’s US software can be used in Australia but not covered by warranty, he said."
Really? Since when do they have a real warranty on software anyhow?
The Christian Right is Neither (Christian nor right). See: Matthew 23, Matthew 25, Ezekiel 16:48-50
A company gave an honest answer? :D"
I was expecting all of these companies to give bullshit reasons, and Microsoft just straight up said "Oh, lol, cause we can
What do I know, I'm just an idiot, right?
Globalization is only valid when you are a large multinational company. When you're a mere consumer, you are obligated to buy from local seller for any price they want to charge. Yep, you can buy abroad, but your government (at least mine does) tries to make such act as most expensive and difficult as possible.
Globalization for corps, feudalism to consumers.
Religion: The greatest weapon of mass destruction of all time
Australia Adobe store - Creative Suite 6 Master Collection - US$ 4,530.00
Brazil Adobe store - Creative Suite 6 Master Collection - US$ 5,055.00
Brazil, where a car made here is sold for R$ 56.210, and the same car, but with more optionals, is exported to Mexico (over 7000 Km away) and is sold there for R$ 25.800. Take that Australia!
Fortunately, this particularly blu-ray was region 0, so there was no need for me to become an evil criminal to view it. I have, however, ripped many a tag off a mattress and jaywalked more than once in my life. So I do have a bad-boy side.
Your political party doesn't care about your rights and only represents corporate interests.
So, on your planet where market forces of supply and demand don't work, does gravity make things fall upward or what exactly do we have going on here?
" If legislation is passed that makes it more expensive for companies to operate, prices go up."
If prices go up and users still pay equally, then any economist will tell you either...
- prices were too low before and/or
- the companies have excessive market power
in either case, the items we're talking about here are expensive enough that it isnt the case of adobe artifically cheapening their price to keep out competitors. does adobe have excessive market power? you tell me: GiMP and other such tools are avialable for free. sounds to me like that they made a good product people want, despite there being cheap alternatives.
Seriously, what the hell are you talking about? Have you ever been to Australia?
It is not "consumer friendly" at all. Granted it is not as hard core as the "stab your neighbor in the face and take his money" capitalism in the US, but it is close. Corporations have massive power over consumers in Australia. Most Australians would attribute this to American corporate and government manipulation. Though I say, BS. It is ones own job to keep his house in order.
Seriously. There are organized trips now to the US. Not just for TVs and games and stuff like that.
People will fly to US and buy their entire kitchen set. (Most can work both 110v and 220v now).
Even after paying the shipping container and the VAT, it is still significantly cheaper than buying in Australia.
Wow, Gimp does another thing that Photoshop can't do!
Here's the secret to immortality:
And that's the issue. so many artificial limitations. To go with the tire example above, I could buy tires from overseas, but then the tires wouldn't have my government's safety stamp on them (they'd be identical tires otherwise, and just as safe, but without the safety stamp they'd be illegal)
I could buy my DVDs overseas, but they'd have the wrong region coding, and even though that is trivial to get around, doing so violates federal law.
Many other products are hit with exorbitant import duties to protect "local" industries (that aren't actually local any more)
I have no problem with companies charging whatever they want. I do have a problem when they get laws passed preventing me from buying the product wherever I want.
People claim this is just the free market in action, I have no problem with the free market, but only the multi-nationals have one. For the consumer the market is so heavily regulated that it just isn't free.
Actually, I've heard that nearly all open source sells in Australia for double what I pay for it in the US. It's everywhere, it tell you.
Is it just my observation, or are there way too many stupid people in the world?
When I worked at a very well known international humanitarian aid organization, we tried asking Adobe a few years back if we could buy their products directly from them, instead of via third parties here in Norway.
We were told that, no, we had to buy it Norway at full price, and it would be a breach of license to buy it from anywhere in the US.
At that time it cost about 17000NOK in the US, while it costed 38000NOK here in Norway (about $2800 vs. $6300). With a few licenses that adds up. And seeing where that money came from, it could've been used for a lot of good!
So the question is: Has Adobe changed their practice?
Their explanation for the difference in price was that "We've defined Norway as a high cost country". But wth, at that point they didn't even have representatives here!
My explanation, simple greed.
They might have changed practice since then for all I know and care. I've got alternatives, and do not use them anymore. In my line of work, that is quite a few lost sales for them since then.
PS: Posting as anon because of the sensitivity of the issue.
The most obvious explanation: until a few years ago ("few" ~= 10), 1 Australian dollar had been roughly equal to ~50 US cents since as long as anybody could remember. My guess is that the original prices were set based on that logic (double the US nominal price, then add some more), and as the Australian Dollar achieved nominal parity with the US Dollar, the prices just stayed with the same multiplier and markup because companies like Adobe realized they could get away with it.
There is. There's a myriad of grey market importers based overseas like e-Global Digital Cameras, there's plenty of locally based (i.e. forced to comply with local warranty and tax laws) companies which offer drop shipping likw Kogan who you may have heard of since they've been featured on Slashdot a few times.
Then for everything else there's reshipping companies in the USA like Re-ship or Meimei who will provide you with a USA address to drop the product to and then forward ship your parcel onto you for a small fee.