Why does Apple mistrust Asia?

Dear Steve,

Maybe you can explain something to me, because your folks here in Asia sure can’t.

Every time somebody asks them why the iTunes Store won’t sell songs or movies to consumers in Asia, all we hear are vague and mumbled remarks about “the issues that still need to be resolved.” This is invariably followed by another sentence saying they are not authorized to say more.

Here is what your marketing director for Asia told the Agence France-Presse in Hong Kong when you launched your movie service in the United States in September.
“We cannot comment on the specifics but it is true that iTunes is not available in Asia. That goes for music and movies.”

Is that any way to talk to your customers?

I asked your company’s visiting fireman from Singapore—we only see him whenever Apple introduces new products here in the Philippines—how long it’s been since the iTunes Store opened for business in the United States.

Five years, he said. Does that mean that a company as innovative as Apple has been unable to resolve those issues in half a decade?

So I asked the guy: Where are Asian iPod buyers supposed to get their music? Limewire? Other file-sharing sites?

“For Asia, we recommend that consumers rip their music from their audio CDs or download any of the thousands of free podcasts,” he said.

So, I asked, we can do anything with our iPods except buy songs and movies from the iTunes Store? That’s correct, he said.

Now Apple will not say how many of the 60 million iPods out there are in Asia, but officials have told the Mac News Network (http://www.macnn.com/) that the iPod doesn’t enjoy the same market leadership here as it does in the US, Japan or Australia. Yet in the same article, your chief financial officer, Peter Oppenheimer, is quoted as saying that Apple sees the rest of Asia as an opportunity to increase market penetration.

Here’s an idea. Start treating buyers here with the same respect that you give your customers elsewhere in the world. Stop redlining Asia with vague talk about piracy. If you have a piracy problem in this region, why not at least say so and level with us?

Let’s speak plainly.

Intended or not, Apple’s decision to withhold the online sale of music and movies in this part of the world is an insult to people who buy its products. The red line tells us you think of us all as digital pirates, unworthy of trust. This is the stark truth that your people dance around whenever we ask them why Apple doesn’t sell music here.

So, is Apple worried that piracy syndicates in this part of the world will start downloading songs for 99 cents apiece and start selling them for 10 cents or burn them on CDs to sell in Third World markets? But that’s happening already, even without iTunes.

Or maybe it’s the music publishers who won’t let you sell their songs in Asia for the same reasons. But if this is so, why not just say so instead of taking the heat for their fears?

Let’s look at some figures.  Apple claims to have sold 1.5 billion songs to date through its iTunes Stores, with its online catalog of 3.5 million songs. Sales in Europe, a market Apple opened in 2004, have shot up from 50 million to 200 million songs. Not bad.

But the International Federation of the Phonographic Industry (IFPI) estimates that almost 20 billion songs were illegally downloaded in 2005 alone—and this was based on consumer research in 10 music markets including the United States, the United Kingdom and Germany, countries where the iTunes Stores already operate. Canada, where iTunes operates, was estimated to account for 1 billion of the songs illegally downloaded last year.

So, when your folks here tell us they can’t sell us songs because of piracy, something just doesn’t wash.

Ironically, by not selling to large swaths of Asia, Apple is indirectly encouraging piracy because iPod owners wouldn’t be able to buy songs online even if they wanted to.
What consumer wouldn’t want to own a legitimate product over a pirated one, as long as the price is right? When the prices of legitimate VCD and DVD movies dropped here, sales went up, despite the availability of cheaper pirated versions.

Oh, one more thing. Why take our word for it? Even the IFPI says one way to fight piracy is to promote legal services.

Of course, I understand that in the end, the operation of an online store is a business decision. Maybe it’s just not worth Apple’s while to sell music and movies in this part of the world. But the least you can do is to level with your customers here. How about it?

We in NZ have a similar problem - but I can assure you its got *nothing* to do with Apple. Its the Music industry. You have entirely the wrong target…

Well, the clue to your answer on that is—“This is invariably followed by another sentence saying they are not authorized to say more.”

That tells you that you should be writing your comments *not* to Apple Computer (and iTunes)—but rather—to the RIAA, instead. That’s who is not authorizing Apple to say more. There’s your culprit.

Go “banging” at the right door....

Regards,
Star Traveler

Hi Jeremy, Star: Please read paragraph 15. I have a good idea who the culprits are, but I don’t think this is the wrong door. If you are going to let your company be the instrument of such discrimination (isn’t that what this is?), you should at least level with your customers, and not give them the runaround.

Just a thought: If a store refuses to sell products to a class of customer based on his race or where he lives, can that store justify its action by saying the manufacturer doesn’t want me to sell to you?

Anyway, thanks for dropping by and leaving your comments.

Chin,

I have to agree with your other posters on this and disagree with you, at least on your approach.  I think Apple “gets it” from a digital music distribution standpoint, but I don’t think the music cartel does.  I think it’s obvious the RIAA is the issue here, so why aren’t you yelling at them?  I can’t buy a DVD encoded for Australia here in the US?  Am I being discriminated against based on my race?  Do they have a problem with white people?  Or is this discrimination based on where I live? . . . No, I would not say discrimination, but rather tight control on marketing.  I can’t buy things in the US that you can get in Asia, but am I blaming Walmart?

The music/movie cartels are the idiots who are dragging their feet and I don’t see that changing any time soon.  They want to put the genie back in the bottle but the digital age is here to stay.  So, they offer digital distribution, but lace it with such onerous DRM that it’s a pain to use.  The issue that you are complaining about is the same that we face here in the US, the cartels punish their honest customers with DRM in the foolish belief that this stops piracy.  We’re both affected by their stupidity, and focusing on Apple as the source of this issue is a waste of time.  We all need to send the cartels notice that they’d better get their act together and sell us an unencumbered product at a fair price, or they will lose us as honest customers forever.

mabuhay.

i think this blog copied your work.

http://www.mac-world.org/2006/10/10/why-does-apple-mistrust-asia/1/

i found the link to this blog from digg.com

The real issue here is not the *AA’s, YET (we don’t know for certain, but it is very likely). The issue here is why Apple is not being open with its Asian customers about the REAL reason why the iTunes music store. All these vague answers from their reps here in Asia are just fuelling more and more speculation. Why not just say it out in the open? After all, Steve Jobs was quite open about the “greediness” of the record companies, right?

http://news.bbc.co.uk/2/hi/entertainment/4265434.stm

I for one would love to have iTunes available here in Asia (esp. the Philippines). There are some cool TV shows that are available for download, and it’d be great for a lot of us who want to go legit.

So don’t bash Chin just yet.

Thanks Victor, I’m glad there are others who get this point.

Brian, you’re right, too. We don’t blame Walmart for NOT selling us a whole bunch of stuff, but being able to buy songs on iTunes is arguably part of the iPod experience-- or at least Apple sells it as such. So, if they’re going to sell us a product here that only works part of the way, they should at least level with us and say why they have to do it, don’t you think?

Digger, thanks. I’ll look into this. The blog in question has no contact information and ripped off the entire column without attribution. I’ve even received a comment that I was the one who plagiarized the story. Look at the time stamp guy. I posted by story an hour ahead.

Perhaps the blogger who stole your article did so as a not-so-subtle play on part of your article’s content, namely piracy.

I think they have a sense of humor, if nothing else.

“What consumer wouldn’t want to own a legitimate product over a pirated one, as long as the price is right?”

I know heaps of people who pirate most of their music/movies/software no matter what. The right price would have to be close to $5 I reckon before they’d even consider purchasing something (even then you’d be pushing it.) And they’re not all Asian either. If it’s copyable, it’s free, and if it’s available free, why pay?

To be honest, I don’t know who’s worse. The thieves, or the companies producing the content. I mean, they charge so much for the content, sell it by the billions, and still want more money. Their greed is what’s going to destroy them.

(says he with a legit 250 DVD and 300 CD collection)

Yeah, I can’t even download all that cover art for all my um, ‘creatively acquired’ songs and movies on my IPod. But I can say that I have more reasons to be on the side of those who are willing to ‘use’ their Ipods in ways that Jobs may not even be aware of. That’s my middle finger to Apple and the West.

The Techno Pinoy blog had an interesting headline. It said:

Chin Wong is wrong: it’s not because of piracy

His point is that you CAN buy songs from iTunes if you use a credit card from a friend or family member in the States. So, he concluded, what Apple is afraid of isn’t piracy but credit card fraud.

I tried to post a comment on the blog, but it signalled it as spam. Go figure.

In any case, here is what I had to say about the entry:

Interesting point. I have been known to be wrong, but this is the first time I’ve seen it in a headline. Thanks for the star billing.

In any case, I suggest that what you have found is a loophole rather than the underlying cause of the iTunes embargo. That is why Apple makes one thing clear in its statements: The iTunes store is not available to most of Asia-- movies and music, period. If the iTunes song had to be physically delivered, it would be delivered to your friend’s or family member’s home in the States-- a rather cumbersome way of doing things.

Besides, I think you miss the point. Apple is selling a product, the iPod, that promises a certain experience—being able to easily buy songs online without doing financial sommersaults (such as borrowing the use of somebody else’s credit card, as you suggest). If that product is crippled, Apple should at least level with its buyers here why that is so.

Although I understand your frustration, I still don’t see your complaint about Apple.  Everyone here seems to understand it’s the RIAA/MPAA who are the pricks in this scenario.  Yes, Apple could come out and say it, but what will that really serve?  They’ve already got the RIAA to renew their current agreement so prices can stay at $.99 for songs and they’re trying to lure the MPAA members on board for video.  Yes, the RIAA/MPAA folks are scum, but calling them that right now is not exactly the smartest business move.

In addition, how will that change your plight? Even if they come out and say it your real problem will not be rectified without pushing the RIAA/MPAA first.

Hi Brian,

First, let me say I agree with most of what you say. I don’t know what you do for a living, but if you’re a journalist who’s trying to get a straight answer, it’s terribly off-putting to get the same vague BS answers from the same sort of people for so many years, who then try to distract you by waving high-tech toys in your face and changing the topic. That’s contempt.

You’re right, too, that their admission wuld do nothing to immediately resolve the problem, but at least the discussion would be out in the open. In my book that counts for something.

Thanks again for dropping by.

Chin,

Apologies for the “spam” message.  Interestingly, my spam blocker has acted up and has been blocking several legitimate comments.  It has been corrected and your comment now appears.

Well, we can argue whether the credit card process is a loophole or not, but the fact remains that Apple does not prohibit me from downloading music from iTunes in Philippines.  Contrast this with Amazon, who does not allow software to be shipped to Philippines.

Moreover, we need to be clear about the statement “iTunes STORE in Asia” versus “downloading iTunes music/movies in Asia.” Having an iTunes store in Asia means having a localized iTunes store, complete with the appropriate language and character set.  Open your iTunes app, scroll to the bottom, and you’ll see the option for a localized version.  I selected Germany and the their top ten lists are different than the US version.  There are also more German artists.

But true, in the choice of countries, Asia is not among the list.

I agree with you though that their marketing and sales people should come up with a good explanation.

I guess, we already know the answer, it piracy. Chinese can copy that device and change the name like LPOD but the letter L is small, making it looked like I or something like that.