Why does the creative cloud cost more in Australia than US

[Frenchy74]

The Aussie dollar is currently stronger than the USD and heas been for 12 months, why do we have to pay a 25% premium over US customers for an online service that shouldn't be affected by shipping or import taxes?

[Claudio González]

The matter has been discussed at length many times. Here is a recent thread:

http://forums.adobe.com/thread/933987?tstart=180

[Frenchy74]

Hi Claudio

Please excuse my ignorance in this matter but how does it cost more to collect money from International credit cards? There are many software companies that have software available as downloads but dont rig the price differently for different countries. And why do they have to prepare different downloads? Most software comes with language options during the install these days, the only reason I can see for having different downloads is for different pricing.

[Claudio González]

Farken, you seem to have missed the tongue-in-cheek tone of most messages in that thread. The naked truth is that NOBODY has ever given a mildy reasonable explanation for these surcharges. More misterious nowadays when there are no physical transferences involved, just downloads; and when if I charge to my credit card the equivalent in pesos (our local currency) of any purchase I make in the Internet, the seller receives the full price he charges in his own local currency, whatever that may be. Obviously, for the banks it doesn't make any difference if they pay rubles to a store next door or yens to a company 20,000 miles away; if there is any extra cost, they will charge it in the card holder's account.

[Phillip_M_Jones]

Does Australia have VAT? (Value Added Tax). Many European Countries do and this might account for some of the difference. Just speculating though.

[John Waller]

Phillip Jones wrote:

Does Australia have VAT? (Value Added Tax). Many European Countries do and this might account for some of the difference. Just speculating though.

Australia has GST (Goods and Services Tax) which is currently 10%.

It may account for some of the difference but only some.

The reason for the rest of the difference is known only to Adobe but whenever they're asked to justify it they respond with vague, irrelevant reasoning and never directly answer the question in any convincing way which makes sense.

It's a longstanding sore point with Adobe's Australian customers (as it is with European customers too).

Everyone cries foul, we discuss the pricing differences across the globe ad nauseaum in the forums (even the Australian Government is involved in software pricing discussions this time around) and elsewhere but nothing changes from upgrade cycle to upgrade cycle.

Adobe continues to grossly over-charge non-US customers and we keep having to pay the huge markups if we want to use the software.

[PECourtejoie]

I think that the local offices also have to pay for buildings, employees, web hosting, advertizements, sponsorships, and sometimes translation costs (for their website) -and I know that English is spoken down there.

[John Waller]

PECourtejoie wrote:

I think that the local offices also have to pay for buildings, employees, web hosting, advertizements, sponsorships, and sometimes translation costs (for their website) -and I know that English is spoken down there.

As I said:

"...they respond with vague, irrelevant reasoning and never directly answer the question in any convincing way which makes sense."

We're talking about digital downloads here: byte for byte (and delivery method) identical to the product enjoyed by US customers.

An Australian computer mag is currently collating examples of blatant overcharging of Australian customers by tech vendors (not just Adobe but Adobe certainly is listed). It's probably a mere sideshow in the scheme of things but if it causes the Adobe boardroom to even raise an eyebrow it may be worthwhile. People power has occasionally been known to influence Adobe pricing policy.

The Australia tax: We list overcharging of Australians by tech vendors

http://apcmag.com/overcharge.htm

[PECourtejoie]

John, I'm not "they"

I am also charged more than others.

I tried to make a reasonable assumption about one of the elements that can explain the price difference. (If the Adobe local offices are separate legal entities)

Another thing to keep in mind is that they cannot stick to the exact conversion rate: if they are very close to it, they would sell at loss when the rate changes... (I was able to get a MBP for the price of a MacBook when the Sterling Pound made a dive compared to the Euro in 2008.) I guess that they set a confortable buffer, and try to stick to it (otherwise, prices would change often, creating confusion and anger to their customers and resellers.)

Maybe that if we add all the parts, a chunk of the price difference can be explained. Then, the rest is "explained" by the fact that Adobe is not a non-profit company.

I sure would want to pay less...

[John Waller]

PECourtejoie wrote:

John, I'm not "they"

I am also charged more than others.

I tried to make a reasonable assumption about one of the elements that can explain the price difference. (If the Adobe local offices are separate legal entities)

I know Pierre.

My comment was more tongue-in-cheek than anything else.

The points you raise are trotted out by Adobe time and again and never satisfy anyone as a complete explanation (including me).

No offense intended.

There's genuine price difference (local taxes, exchange rates etc) at one end of the spectrum and blatant over charging at the other.

Adobe's policies, to everyone but Adobe, are clearly the latter. They charge what they do because they can and they know they'll get it. These conversations rarely occurred when Macromedia was in competition with Adobe.

[Claudio González]

PECourtejoie wrote:

John, I'm not "they"

I am also charged more than others.

I tried to make a reasonable assumption about one of the elements that can explain the price difference. (If the Adobe local offices are separate legal entities)

Another thing to keep in mind is that they cannot stick to the exact conversion rate: if they are very close to it, they would sell at loss when the rate changes... (I was able to get a MBP for the price of a MacBook when the Sterling Pound made a dive compared to the Euro in 2008.) I guess that they set a confortable buffer, and try to stick to it (otherwise, prices would change often, creating confusion and anger to their customers and resellers.)

Maybe that if we add all the parts, a chunk of the price difference can be explained. Then, the rest is "explained" by the fact that Adobe is not a non-profit company.

I sure would want to pay less...

Peter, we can all make assumptions that can explain part of the price difference, and I'm sure we have read all of these guesses in these forums over the years. I think that if you add them all up, you will never come to the actual surcharges.

You say Maybe that if we add all the parts, a chunk of the price difference can be explained. Then, the rest is "explained" by the fact that Adobe is not a non-profit company. I see it the other way around: The price difference is explained by the fact that Adobe is not a non-profit company. The charge what they do because they can an they know they'll get it, as John says.

Pity that Adobe does not seem to realize how much this policy encourages piracy in countries where the average salaries are way, way below the price of any of their products. In my opinion, sales would probably increase in those contries if they charged reasonable prices. Although it may be too late in places where piracy has become in practice a not-frowned-upon practice.

[John Waller]

Claudio González wrote:
Pity that Adobe does not seem to realize how much this policy encourages piracy in countries where the average salaries are way, way below the price of any of their products. In my opinion, sales would probably increase in those contries if they charged reasonable prices. Although it may be too late in places where piracy has become in practice a not-frowned-upon practice.

Seems to me that Adobe's latest response to piracy is the Cloud subscription model.

If it has the desired effect on piracy (not to mention revenue due to people subscribing 365/24/7) that Adobe is looking for, why would Adobe bother with crackable perpetual licenses - and endless arguments over regional price differences - in future?

[Claudio González]

John, I honestly do not know (I am no longer upgrading my Adobe products as I am no longer using them for paid jobs), so this question is completely naive: will Adobe charge the same subscription prices all over the world?

[PECourtejoie]

Claudio, this very thread is about the difference in price for the subscription to the Creative Cloud...

[Claudio González]

Pierre, I was fooled by this sentence in John's last message, which I took to mean that there will not be regional price differencse in the future:

If it has the desired effect on piracy (not to mention revenue due to people subscribing 365/24/7) that Adobe is looking for, why would Adobe bother with crackable perpetual licenses - and endless arguments over regional price differences - in future?

[PECourtejoie]

It might be that the difference in price is less pronounced with the Cloud offerings?

[Claudio González]

But what excuse would be left to "explain" regional price differences then?

[Claudio González]

I hadn't thought of this one: perhaps they are charging for miles travelled by the information from the source to one's computer. And I guess that each owner of the neccessary satellites will have different connection fees for different countries...

[getho]

Its the cost of fitting out the carrier pigeons with usb drives, and the obvious attrition rates you'd get over large distances

[Claudio González]

Pierre, your argument has also been presented here many times. Do you seriously think that the cost of buildings, employees, ..., is 50% higher in other countries than in the USA? Why does Adobe host their customer service in India then?

As John has just said, we are talking about digital downloads, and credit cards and PayPal insure that Adobe does not have to move a finger to get all their USDs for each download. I could understand large differences in prices when one was paying for a boxed CD or DVD plus a fairly heavy and usually well printed manual, but now...

[Claudio González]

Phillip, none of the states in the USA have to pay any form of sales tax? Regardless, why try to hide 50% and more surcharges behind much lower VAT charges? Next thing, you'll be talking about the extra costs of preparing sofware packages for downloading them outside the USA...

[teztas]

It gets even worse if you want to upgrade an entire suite. I just tried to upgade my Design Premium at the default Adobe store (US as it happens) at the quoted price of US$749. The transaction couldn't be completed and it was suggested that I try again or call a phone number. Eventually, I made it to the Australian store, but the upgrade price was $1137. The current conversion would be A$773.37. Add 10% GST to the Australian price and it becomes $1250.70. That's a 67% increase on the US price!

[Claudio González]

Textas, you mean that the transaction failed, not because only American  credit cards billed at an USA valid address were accepted, but because of some undeterminate network failure, and that everything will eventually function properly if you continue trying again? Now, THAT would be NEWS, although I must say that I very much doubt it.

I know of many people who would be willing to try as many times af necessary if they knew that paying American prices with a non-American credit card is only a matter of patience.

[teztas]

Actually Claudio, you have completely missed the point of my post and its relevenance to the question asked by the OP. But for your information, I did not try to 'beat the system' as you infer. I replied to an email promotion regarding the the CS6 upgrade. That took me to the Adobe store and I selected the 'Buy upgrade...' option. To complete the transaction, I was prompted to log in with my Adobe ID which I did. But then, after clicking on the button to complete the purchase, a pop-up told me that there was a problem with the transaction and to try again, but if I still had no success, to call an 800-something phone number. After trying one or two times more, I gave up and looked for a means of contact other than the phone number. That's when I ended up linked to the Australian store and discovered not only that I had been attempting to place the order through the US store, but the price was hugely inflated. Does that make it clear?

By the way, when I ugpgraded to CS5 two and half years ago it cost $1050 including GST and the Australian dollar was valued at around 80 US cents. It is currently close to parity and until recently had been close to US1.20 for some time. So, I don't see how Adobe can have any excuse for the exhorbitant price difference.

[Claudio González]

It seems that we are both misunderstanding each other. I did understand perfectly the first time you explained it what you had done and why. What struck me as strange was that, when any of the people who have complained in this forum (in several threads through the years) about the surcharges, have attempted to purchase directly from the Adobe USA Store, their operations have been refused at the payment stage, and with a very clear explanation: they only sell to people residing in the USA and whose method of payment involves billing to an USA address.

Your report, however, seemed to indicate at least for me that your operation failed due to a different reason. And that seemed to open interesting possibilities, including a new policy from Adobe, of charging the same prices all over the world. Something that unfortunately we all know is very nearly impossible to happen.

If you take a look at the posts in this thread -or in the several previous ones- you'll notice that nobody has ever defended the outrageous surcharges outside the USA, and nobody has ever offered any mildly reasonable explanation for their existence. Maintaining local offices, for example, is no excuse if these offices don't even publicise Adobe products in the country, as happens here. If our Adobe office was erased from the map right now, I doubt that there would be many local users of Adobe products that would even notice.