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Apple Blames Australian Record Labels For Inflated iTunes Prices

Written by Marc Zanotti on March 25, 2013

Apple has defended itself against criticism over inflated Australian iTunes retail prices during a government inquiry held in Canberra, pointing the finger at record labels, movie studios and TV networks for the higher costs to consumers.

As reported by Tonedeaf, Vice President for Apple Australia, New Zealand and South Asia Tony King informed the hearing that Australian iTunes prices reflect the higher wholesale prices set by record labels and other factors such as advertising costs and local sale taxes:

“The pricing of this digital content is based on the wholesale prices which are set through negotiated contracts with the record labels, movie studios and TV networks. In Australia they have often set a higher wholesale price than the price of similar content in the United States.

“Apple must consider differences between countries in product costs, freight charges, local sales taxes, levies, import duties, channel economics, competition and local laws regarding advertised prices.”

However, AIR (Australian Record Labels Association) General Manager Nick O’Byrne was quick to fend off any notions of ‘label greed’, citing that the Australian economy is, at least partly, responsible for why we can pay up to 50% more than US iTunes customers:

“The current inflated Australian price is a function of the strong Australian dollar, not label greed.

“Owners of recordings (artists and labels) should be able to choose their own price-points for music. Intervention on pricing by government in this case would be extremely unwelcome for the small businesses that we represent.”

O’Byrne went on to add that this isn’t a matter for Government to resolve; rather, it is up to Australian customers to voice their displeasure via their choice of how and where to purchase music from.

”Most independents release their music through several channels; bandcamp, iTunes, and streaming services – so if the consumer is unhappy with an iTunes price then they are easily able to find a different mode of consumption which suits their budget.”

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