Update: Adobe CEO Dodges Questions on Overpricing in Australia
February 14, 2013 2:00 PM
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Adobe CEO doesn't want to talk about huge Australian pricing discrepancies
A video has turned up on YouTube that shows adobe CEO Shantanu Narayen repeatedly dodging a question directly asked about Adobe's huge price discrepancies for software in Australia compared to other parts of the world. The person on the video asking the question repeatedly asks why Australians are charged as much is AU$1400 more for traditional software delivered over the internet than people in the United States.
This is a common complaint by Australian users who have long complained that they are price gouged by major companies such as Apple, Adobe, and Microsoft. In fact, pricing is such a source of contention within Australia that executives from Adobe, Microsoft, and Apple have been summoned to appear before Australian Parliament to answer questions specifically about pricing.
All three of these companies had previously refused to appear before Parliament.
In the video, the Adobe CEO continually dodges multiple questions about the Creative Suite and instead talks about Adobe's Creative Cloud offering. Adobe did recently
reduce the price
of its Creative Cloud subscription service from AU$62.99 to AU$49.99 matching prices in the United States.
Apparently, that price matching did not extend to people who want to purchase the Creative Suite as a download.
Updated 2/14/2013 @ 2PM EST
reports that it's actually cheaper for Australians to purchase a roundtrip ticket from Australia to Los Angeles to obtain a U.S version of Adobe Creative Suite.
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2/15/2013 2:01:58 AM
This is a fundamental of microeconomics. Its called creating producer surplus and economic rent seeking.
Look up marginal benefit. It demonstrates that different people will pay different amounts for the same thing. Obviously, there are group of people who are willing to pay more for goods than others. At this point for a single good, it should reach a point of equilibrium where the marginal cost = marginal benefit, unfortunately, it doesn't end there.
Every large company has a bunch of greedy economics experts who figure out "hey, if we're at eq. here, let's offer a rich small group of people who will pay more for a product at that higher price instead". More often that not, those people buy up big. Every company does this. Airlines do it. Reigonal pricing at fast food chains. Gas prices in areas with lots of cars vs no cars.
The only difference is its getting media attention because a bunch of politicians have a chance to look good due to a stakeholder (voters) crying foul. This won't change jack. The only thing that would stop Australians being overpriced is if they stop buying those goods (ain't gonna happen), or if they hit recession (likely won't happen anytime soon).
"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer
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