It is cheaper to fly to US than buy Adobe software in Australia

There is a parliamentary committee currently looking into this disparity in pricing: http://news.cnet.com/8301-1001_3-57568633-92/apple-microsoft...

It wouldn't be equal to USA prices, since VAT and some markup would apply, but if there is any competition whatsoever, there won't be a markup of $1000 for a single box.

For example in Europe, the same suite mentioned in the article costs USD 4552.14, or $200 more expensive even than Australia.

But then they'll throw a fit at each other if one country says 'no, you can't sell you're cheap bananas here' and all start blathering about free trade.

Free trade is good in everything apart from IP apparently.

"Adobe grants Customer a non-exclusive and limited license to install and use the Software (a) in the territory or region where Customer obtains the Software from Adobe or Adobe’s authorized reseller or as otherwise stated in the Documentation (“Territory”)"

"4.9 Territory. Customer shall only use the Software and access the Adobe Online Services in the Territory and in a manner consistent with the activation policy described at http://www.adobe.com/go/activation. Adobe may terminate the license granted herein or suspend the Membership or access to the Adobe Online Services if Adobe determines that Customer is using the Software or Adobe Online Services outside the Territory."

First, it's worth noting that US prices don't include sales tax. Australian prices include a 10% GST.

Second, international companies will end up doing their accounting in one currency. For tech companies unsurprisingly this is US dollars. Transactions in foreign currencies get converted to USD. Companies hedge themselves against FX risk by locking in exchange rates and giving themselves a buffer so they don't need to change prices every day. Ergo, things in foreign currencies will always cost a little bit more.

So if a Macbook Air costs US$999 and A$1099 (hypothetical, the Apple store is down so I can't check what the actual price is) then that's about right (given A$1 = ~US$1.04).

That all being said, high prices in Australia largely come from it being a small market and, more importantly, consumers putting up with it.

Books are the worst example of this. UK companies get the distribution rights for Australia. Australian copyright law largely protects them from imports (although this was relaxed by the previous Howard government in a 1am Senate vote). Yet what costs $10 in the US will cost $25 in Australia.

The Dell E6x00 laptops routinely cost <$!000 in the US but cost ~$2.5k in Australia for no readily apparent reason (it's been a year or two since I looked at this so it may have changed).

The "waterbed effect" seems to play a part too. The US is a large single market so has a lot of purchasing power compared to pretty much any other market. I've thought that cameras are cheaper in the US (than Europe or Australia) for this reason more than anything else.

To give an Australian corollary to this: Dan Murphy, the largest alcohol retailer owned by one of the two supermarket conglomerates (Woolworths), is killing smaller competitors because their purchasing power is so large they can often sell things (at a profit) for less than non-chain stores can buy them wholesale.

For software in the era of digital distribution there's no justification for Adobe's prices here. It's the same software in the same language. Perhaps they needed different TOS/EULAs for Australia (or at least have them reviewed to make sure they are compliant with Australian law). That's about it.

One thing to be thankful for is the ACCC in Australia actually has teeth and through the Trade Practices Act and Corporations Act has a lot of power. The FTC in comparison seems to be a partisan paper tiger in comparison.

I was going to subscribe until I learned this. Can't support business's gouging their clients.

I have both a grudging respect and an intense dislike of Adobe for their complete ownership of the creative software space. It's kind of amazing, and it's the clearest example of a monopoly that I experience in my everyday life. Well done, I guess?

As a consumer obviously we want everything to be cheaper, not just compared to elsewhere, but in general. Who wouldn't like Apple products to be cheaper, or cheaper DSL, cheaper cable etc.

As a company you're in it to make money, period. Pricing is one of the most complicated and imprecise things a company has to deal with. Once you set a price you basically anchor yourself to it in case you later find out that that price was low and you could have charged higher. If you set the price too high then there is always the option to go lower, or offer discounts. You also need to take into account different categories of customers, based on region in this case, and try to price discriminate such that you are able to charge the price that would bring maximum profit (not revenue) and where people cannot go across these categories to buy another comparable product. For example, senior, student, children discounts for movie tickets. Then there are com parables you need to take into account, like Coke and Pepsi are substitutes to an extent, Photoshop and Gimp are not. IntelliJ and Eclipse are, so IntelliJ has to make sure it is offering value for which it can charge.

Microsoft also does regional pricing, and its products are dirt cheap in China and other economies where there is rampant piracy, since there it is effectively competing with its own product being offered for free.

Companies always try to maximize profits and if they can get higher profits and are not anchored to a lower price, they will do so. There is nothing wrong with it, its just business, which pays our salaries and also for entrepreneurs keeps our investors happy.

Example: price of Creative Suite® 6 Design Standard is USD1,299 versus GBP1,227, despite the fact that the exchange rate is around 1.55.

For some stupid unknown reason, Adobe will usually charge the same unit price in GBP as they do in USD. They will quote "cost of operating" is higher in the UK, but 55% higher? Bullshit.

Let's look back 10 years ago. Around 10 years ago AU$1 was worth about US$0.60. So, at the time if the US version sold for US$2500 you would need to sell the Australian version for about AU$4166 (before any tax difference) to make the same US$2500.

Now, fast forward 10 years. Over this period Australians have become used to paying about AU$4k for the product but in the background the exchange rate continued to improve in favor of the AU$, to the point where today were the two currencies are worth about the same (AU$ are actually worth slightly more now). BUT because Australians are used to paying the price, there has never been any incentive for Adobe to reduce the price. The same applies for video games, or just about anything else on the market.

Now, I'm not defending Adobe, but from a business perspective I can understand how this happened. You have an exchange rate that slowly creeps up over 10 years. You don't see sales dropping, so why reduce your price, right? This is now the predicament they're in, they kept the price steady and now they have to pay the price with media attention. So, what t

Had this been the other way, and the exchange rate declined for the AU$, you can be damn sure Adobe would have taken corrective price action.

Anyone have any figures?

It's been known for some time now that Australian are being gouged by multinational and local corporations. There should be no real reason why iTunes is more expensive in Australia than in the U.S. - our exchange rates are on a par with the U.S. (and in fact, at times exceeded the U.S. dollar!) and there is no real tangible transport costs. Even a 10% consumption tax doesn't explain the difference in prices between the two countries, for the same product.

1. https://news.ycombinator.com/item?id=5123513

I still don't own Photoshop and Lightroom and Adobe is out 800 USD.

[1] http://www.iol.co.za/news/south-africa/cheaper-to-fly-than-u...

US starts at $25,795 Australia starts at $44,377

In both cases the car needs to be imported and also falls under Australia's luxury car tax so the comparison is reasonably fair. The more expensive a car is the worse it gets (a Nissan gtr will set you back 170k+).

Sure a little bit of this is first world problems, still annoying though.

It would appear people keep buying it or Adobe would have changed the policy.

Local vendors would scream at this sale-killing feature, and the PR win would be something amazing. It might even lower local prices.

One copyright reform I'd make, would be removing copyright protection from works like this where are sold as massively different rates between markets. You'd need to look at average wage in the country and compare (rather than a simple metric of 'can you fly to $OTHERCOUNTRY and buy it for less overall?'). If this was the law, then in this case, the software would not be copyrighted in Australia and people could bootleg it legally. Adobe would only get copyright protection if they offered it for sale at a fair price.

Another advantage of this approach is that TVs/Films/out of print books are only copyrighted and 'locked up', when they are actually for sale. A film hasn't been released in UK but is in USA? No copyright protected in UK! Force them to release at same time. (NB: an online shop that ships anywhere counts as "for sale in that country")

But instead, there is global copyright without any restrictions.

Its the opposite of people moaning that people in some 3rd world countries earn so little but this isn't usually a problem as every day essentials are actually much cheaper.