Geoblocking has many uses – or abuses. The most common is associated with licensing. Many early Netflix subscribers in Australia, for example, were dismayed to find that, although paying similar prices to their US counterparts, they had access to just a fraction of the shows and movies North American subscribers could view, because the streaming service did not have the licenses to stream those media in Australia.
To me, such examples demonstrate how outdated our worldwide licensing system is. If I buy a DVD box set or a video game overseas, I can bring it home and play it (at least, these days I can, after the Australian government outlawed region-locking on locally sold devices such as DVD players).
But technically, I shouldn’t. A video game purchased in Japan, for example, is likely to have ‘FOR SALE AND USE ONLY IN JAPAN’ printed on the box.
Books have always been different. A book sold in Japan or the USA or wherever remains mine to read wherever I see fit.
Can you imagine if that were not the case? Gone would be the airport bookstore! Would Penguin publishers – famously founded when Sir Allen Lane was disappointed in the reading materials available at a train station – even exist? Or would special book incinerators be wheeled up the aisle as soon as your train crossed the border – or your plane flew into international airspace, or your boat reached international waters?
As ludicrous as that sounds, as a frequent traveller (at least pre-pandemic!) I often had difficulty downloading ebooks to my Kindle app while I was away. There’s a limit on how many purchases you can make outside your own home country. And sometimes, a book simply isn’t available in a particular region.
Another use for geoblocking is to enforce price discrimination. That is, to force consumers in one location to pay more than those in another.
Consumer advocate group CHOICE made a landmark submission to the Australian government. They compared the pricing of digital and IT products, including music, games (both PC and console), software and computer hardware. Their research uncovered enormous disparities in the prices paid by Australian compared to US consumers.
It would seem logical to think that Australians might pay more for some physical products given the country’s remoteness (shipping costs), smaller population (higher advertising and other expenses per sale) and better working conditions (Australian businesses generally have to pay their employees considerably higher wages than do American businesses, with far better sick pay, holidays and other standards). All of this we might expect to result in higher costs for the consumer when buying physical products from physical stores.
But digital products, we might assume, would cost approximately the same. After all, the great benefit of digital products was meant to be their close-to-zero distribution costs.
Yet, CHOICE found the opposite. After currency conversion, Australian consumers paid around 12% more for Apple hardware such as MacBooks, they were charged between 50% and 73% more than American consumers for digital products on iTunes.
That’s right – only 12% more for items that actually have to be shipped a long distance, physically stored in a remote location, and sold to a distributed population by higher-paid salespeople, but up to 73% more for digital items which incur no additional expenses.
Importantly, in addition to the shipping, warehousing, and retailing costs involved in selling physical products, Australia also has a 10% Goods and Services Tax (GST) which does not exist in the USA (some states have no sales tax, most do, but none are anywhere near as high as Australia’s). As CHOICE points out, taking this tax into consideration, Apple’s hardware prices in Australia were more or less at parity with the US. Unlike their wildly overpriced digital items.
Are all digital products so obscenely priced?
Disparities in video game pricing was even more egregious. Games sold on physical media in physical stores cost almost 30% more in the UK than in the US, and nearly 60% more again in Australia. The total Australian markup was 88% above US prices – almost double.
But again, this was ‘cheap’ in comparison to the markup on the digital download platform, Steam, where at least one game was sold at an obscene 342% markup in Australia.
Yes. Australian gamers were charged almost 3.5 times as much in US dollars for the exact same digital product.
What about books?
These days, when it comes to books, on Amazon at least, books in the US and Australia are pretty evenly priced in digital editions.
In 2020, I compared the prices of the 20 best books of 2019, as chosen by Amazon’s editors, and found only very negligible differences, accountable to rounding in currency conversion. The average Kindle book on this list came out at around $15.50 AUD/$9.99 USD in both countries.
Hard copy books, however, were a completely different story. Only one of the twenty books (the non-fiction Maybe You Should Talk to Someone) was priced the same in the US and Australia.
Three books did actually cost a little less in Australia – between 10-30% discounts.
But the vast majority – 16 out of 20 – were cheaper in the USA. And significantly so.
The average discount in the United States was 30% – i.e. the maximum discount Australian consumers saw on US prices. One book, The Water Dancer, cost less than half as much in the US as it does Downunder (US$16.80 (which works out to AU$26.21) in the USA, versus AU$54.55 in Australia).
No rhyme or reason
So I decided to take a look at Amazon.co.uk also. There, the average Kindle book on this list cost approximately 7 pounds, or AU$13.50/US$8.70. This average is, perhaps, artificially low, given the presence of one very deeply discounted special offer: Red at the Bone was retailing for 99p. Removing this figure, we see that Kindle books on this list are only slightly cheaper in the UK, at an average price of 7 pounds 40 on Kindle, or around AU$14.20/US$9.20.
There was no obvious rhyme or reason to the differences observed. Excluding Red at the Bone, which was selling in the UK at just a tenth of the price consumers in Australia had to pay, the biggest difference between the UK and Australia was on the non-fiction book Maybe You Should Talk to Someone, which cost less than half the price on Kindle in the UK as in Australia, or the US, for that matter. At the other end of the spectrum, both The Starless Sea and The World That We Knew cost around 1.5x as much in the UK as they did in Australia.
The average hardcover book in the UK on this list cost around £14.40 (or AU$33.50/US$21.60). That’s substantially more than the average in the US ($15.40, or around $24 AUD). And it’s even slightly more expensive than the Australian average of $31 AUD.
Importantly, however, two of these titles were unavailable in hardcover or paperback in the UK, and so, their library binding list prices artificially inflate the average. Removing these two, the UK average is essentially on par with the Australian average – £16 or $31 AUD.
Essentially, US readers pay on average just 22% of the price UK and Australian consumers pay for the same book
Of course, English language books aren’t just bought and consumed in primarily English-speaking countries. So I also compared the same 20 books in Japan, a country I spend a lot of time in.
All except for Things We Didn’t Talk About When I Was A Girl showed as available on Kindle. The average price of those books that were available on Kindle was around 1500 yen, or approximately $21 AUD (close to $14 USD).
Price differences were far from uniform. Some Kindle books, like The Silent Patient, were significantly cheaper in Japan (at ¥608, or just AU$8.78 – around half the price paid by Australian, UK, or US readers). Others were substantially more expensive, like Maybe You Should Talk to Someone which cost more on Kindle in Japan that it would in hardcover in either the US or Australia.
What is really interesting is the prices of hard copy books in Japan. Three of the books simply were not available in any printed format on Amazon.co.jp. Converted from yen, only one book, On Earth We Are Briefly Gorgeous, cost approximately the same in Japan as it did in the US. Every other book cost significantly less in the USA (The Ninth House, The World That We Knew, and Super Pumped cost more than double the US price in Japan).
This isn’t especially shocking: The audience for English-language books in Japan is much smaller than in the US, and big, hardcover books are pretty rare there. (Most Japanese books are published as hand-sized paperbacks).
English-language books… cheaper in Japan than in English-majority Australia
What is surprising is that in many cases, after accounting for currency conversion, it was cheaper to buy these books in Japan than Australia. Two books, Ask Again, Yes and I Will Never See the World Again cost approximately the same in both countries. Twelve, as we might expect, cost less in Australia (an English-speaking, big-book-buying country). But a full third of these price differences were not significant (around 10% or less) and none of the differences compared to the sorts of deep discounts seen in the USA.
Somewhat oddly, there were several books – City of Girls, Red at the Bone, and The Water Dancer which cost more in Australia than in Japan! Once again, The Water Dancer was the most overpriced. In Australia, it cost 1.5x the price of the same book in Japan (and, as you may recall, more than 2x the cost of the same book in the USA).
Despite these bargains, the average hardcopy book in Japan cost $38AUD – substantially more than any other country.
|Avg. Kindle||(in USD)||Avg. Hardcopy||(in USD||Differential|
A customer in one of the English-speaking countries listed can expect to pay around $9.99 for an ebook, but one in Japan will need to fork out almost 1.5x this amount for the same book.
A customer in Australia or the UK can expect to pay around $5 USD extra per hardcopy book. Meanwhile, an Amazon customer in Japan can expect to pay almost $10 extra.
Remember: this is literally only the difference in costs of the book. We haven’t accounted for postage here.
To check to what extent Japan’s pricing might simply reflect the fact that these books are in a non-dominant language, English, I checked the most-recommended books in Japan.
Kindle books written in Japanese ranged from about 500 to 1000 yen (compared to ¥1500 for the English Kindle books) and hardcopy versions of the same were approximately 1000-1200 yen (compared to ¥2600 for the English hardcopy books).
I find it interesting that hardcopy books are not only substantially more expensive in all three non-US countries surveyed, but that hardcover books cost around double the price of the Kindle version in all three nations.
It all comes down to how much the market will bear.
A lesson for all of us readers:
As customers, when we buy a hardcopy book online, we’re happy if it costs a little less than we could get it for at our local bookstore. Amazon and other online retailers aren’t really competing against a global market when it comes to purchasing physical books. They were – at least initially – competing against our bricks-and-mortar local bookshops, and our big box book stores.
Even if we are doing more of our shopping online these days, these are still the prices we make comparisons to in our head. Australians and Brits and Japanese people have an expectation of how much a book “should” cost based on decades of book-buying experience, and as long as those expectations are met (or, sometimes, bettered), we’re happy.
When it comes to digital products, however, consumers are (rightly) outraged when a book costs more in one country than in another. And of course, this is easier to compare when you speak the same language (not only to compare like-for-like products, but because you need to understand how to navigate the website as well).
All of the usual justifications- the cost of rent, the price of utilities, discrepancies in local labour laws, etc. – don’t apply (to the same extent). So we get angry. And consumer groups get angry. And they write reports and lobby on our behalf.
In reality, however, many of the usual justifications don’t apply to the online purchase of physical goods, either. As the CHOICE article showed almost a decade ago, there is almost no rationale for large discrepancies in the pricing of digital products.
We simply accept them because we’re accustomed to them.
But we don’t have to do that.
Two lessons for authors and publishers:
There are two lessons authors and publishers can learn from the above statistics.
Firstly, hardcopy books are substantially more expensive for many consumers outside of the US. This makes them potentially much less appealing, even before expensive shipping is accounted for, and may make readers far less likely to risk purchasing a hardcopy book from an unknown author. If you’re thinking about promoting a book, you want to keep this in mind.
Secondly, although it might appear that the cost of ebooks is relatively comparable in the US and elsewhere surveyed, these figures don’t take into account the purchasing power of citizens in each of these nations.
In 2019, the International Monetary Fund estimated the GDP per capita of the USA to be over $65,000. (All figures in this section are in USD). This is ten grand more than Australia’s per capita GDP of just under $54,000. Both the United Kingdom and Japan were considerably further down the chart, at approximately $41,000 a piece.
Another way of looking at GDP is to compare purchasing power. The US is once again at the top of our list, at over $67,000 per capita. Australia’s GDP (PPP) is just under $55,000, and the UK and Japan are neighbours once more at $48,000 and $47,000 respectively.
And let’s not forget, these are rich countries. The top 30 in the world.
In Burundi, the nominal GDP per capita is just $309, and the GDP (PPP) is $724. For a whole year.
And that’s the average. There would be many people with far less.
So, there’s no Amazon.bi (that’s the top level domain name for Burundi). Yet. (For now, it just redirects to your closest Amazon store).
But there is an Amazon.com.br (Brazil). An Amazon.cn (China). An Amazon.in (India). An Amazon.com.mx (Mexico). The GDP per capita in these countries ranges from $2,000 (in India) to around $9,000 or $10,000 a year (Brazil, China, and Mexico).
So what does this mean for book prices?
It means that setting a book at whatever is the equivalent of $9.99 USD in the local currency doesn’t necessarily mean that price is ‘fair’ because it is the ‘same’. And it certainly doesn’t mean that it will be affordable.
Australians enjoy around 80% of the income their American counterparts do each year, yet we pay 100% of the price of most Kindle books, and 150% of the price of a hardcopy.
In relative terms, this means that, to someone with an Australian income, paying US$9.99 for an ebook ‘feels’ 20% more expensive. More like what handing over US$12 would feel like to someone with a US income.
And that hardcover book? It doesn’t just feel like it costs 50% more. It feels more like 70% extra. Like handing over US$25.
None of this is all that bad. But think of the Mexican or the Chinese or the Brazilian consumer. US$9.99 to someone who earns $10,000 a year or less is a very substantial chunk of change. It feels more like paying $65 would. And I’m sure we can all agree that $65 is a hell of a lot of money to pay for an ebook – one which has essentially no cost to produce once the initial work of writing, editing, and formatting is done.
To put it another way, in countries where the GDP is around US$50,000 per person on average, like Australia or Japan, a $9.99 ebook represents a 0.02% of a fairly typical person’s yearly income. But it’s 0.1% of $10,000, and a whopping 0.5% of $2,000.
Those might not sound like the biggest figures in the world, but to put that into perspective: 0.1% of a $50,000 income is $50. And 0.5% is $250.
How often would you use the ‘Buy now with one click’ button…
if every time you clicked, it cost you $50? $250?
How much thought do you put into purchases that cost $250? (For those playing along at home, that’s close to $400 AUD).
And what about someone in Burundi, with $300? One ebook represents 3% of their income.
That’s like $1,500 for someone with $50,000 a year.
I would definitely have the ‘one click’ purchasing option disabled on that.
Yes, there are certainly many other factors to consider, such as the distribution of wealth in each of these countries. But the general principle remains: where pricing is arbitrary, as it is largely in the case of books and especially ebooks, there is little justification for charging extortionate prices based on a customer’s geographic location.
And, in fact, doing so may actually harm publishers and authors.
I don’t think it’s any great wonder that we’ve seen time and time again that those locations in which popular television shows and movies are routinely geoblocked, and in which books and music are exorbitantly priced, piracy skyrockets. And, more importantly, it often remains high, even if prices come down or media are eventually made available. Why?
Trust and respect
I think most people want to do the right thing. To support the artists and media they love.
But they also want to be treated fairly. And we remember when we have been cast aside, ignored, or fleeced.