A year after the IT Pricing Review – Australians are still waiting longer and paying more

A year ago today, the bipartisan IT Pricing Inquiry concluded that Australians do pay more for their music, movies and IT products.  This ‘Australia tax’ they concluded, was not explained by additional staffing costs or warranty obligations, but primarily by deliberate market segmentation, enforced with goeblocks on digital content. 

And Australians are not amused.  Polling conducted by Essential Media released today shows 79% of people are concerned about paying more for their movies, music and games.  Perhaps surprisingly, this is not a phenomena of the tech-savvy younger generations, 80%of people aged 35-54 were concerned, and 79% of the over 55s. 

As Executive Officer for the Australian Digital Alliance, Trish Hepworth notes:

Nobody likes being ripped off.  And with the internet it is very easy to see that you are paying more to download a movie or a song in Australia than you would if you were buying it in the US. 

Recent research from consumer group CHOICE indicates the extent of current price discrimination.  Songs on iTunes are still on average 55% more expensive if purchased through Australian iTunes rather than the US offering, and for the top 10 movies Australians are paying 17-144% more.  Additionally, Australians still face barriers in accessing cultural goods. Movie release dates in Australian still lag an average of three weeks behind the US  and TV show are similarly delayed.

Amongst the IT Pricing Inquiry recommendations were clarifications around what consumers could do bypass geoblocks and consumer education.  Many Australians already utilise technologies such as virtual private networks (VPNs) to access content at US prices. However many consumers are confused about what they are allowed to do, and the differences between locks that solely enforce geographical market segmentation (legal to bypass) and locks that are access technological protection measures (TPMs) and illegal to break. 

Adoption of the recommendations around geoblocks and parallel imports would increase competition and lower prices for Australian consumers and business.  The government has announced its intention to respond to the IT Pricing Inquiry, however no timeline for response has been released. With increasing attention being paid to on;line copyright infringement, positive steps to ensuring that Australians have ways to legitimately access content would be a timely contribution to the debate.