Australian Consumer Advocate CHOICE Encourages IP Spoofing To Get Better Prices

from the scaling-the-virtual-walls dept

I'll be honest about my viewpoint to start this piece: I hate geo-restrictions, particularly on digital goods. I simply cannot see how they benefit anyone. Customers are blocked or pay different prices for like goods, often times angering them (not something you typically want to do to customers). Companies feel the brunt of this anger, or else at least feel the impact of the a restricted customer base through their own unwillingness to deal fairly in a global marketplace. Perhaps most importantly, for savvy customers, there are tools to simply get around the artificial barriers these companies erect, making them just more useless DRM-like nonsense.

And, apparently, some consumer advocate groups out there are beginning to feel similarly. Take Australian advocacy group CHOICE, for instance, who recently submitted to a parliamentary inquiry on technology pricing with the opinion that consumers down under should be spoofing their IP addresses to get better deals from global providers.

The group has today released a guide explaining how to do so using virtual private networks (VPNs) and alternative domain name systems (DNSs).

Choice also suggested setting up US iTunes accounts and using surrogate US addresses for forwarding packages from American stores. Choice has noted previously that Australians pay 52 per cent more for digital music downloads on iTunes compared to US users.

If you just heard a loud thumping sound, it was probably the collective fainting of technology and media providers over the idea of Australians paying the same price for goods as Americans. You can almost hear their angry cries now, can't you? "This is geo-piracy! They aren't playing by the rules!"

And that might be true. But the thing is, if the rules suck, why should you play by them? Take the iTunes example: how in the world, with a globally connected internet and the offering of digital goods, could it possibly make sense for a consumer in one nation to pay more than a consumer in another? Excluding the false barriers that have been erected (like licensing, geo-restrictions, etc.), where is the logic in this practice? Minus the occasional invalidation of product warranties, there is none, as CHOICE notes.

"As long as consumers are aware of the risks and do their due-diligence, there is no reason why they cannot pick up a bargain online with confidence," Levey said. "It also undermines the virtual walls these companies have built around the Australian market, which in the long term will help bring down prices to a global parity."

Or, in other words, position global providers to actually compete in a global marketplace, not the artificially segmented anti-consumer marketplace they've constructed for themselves.

Filed Under: australia, digital goods, ip spoofing, prices

Bug In Kobo's Online Store Offers Up Random eBook Prices [Update]

from the now-featuring-our-famous-'whatever'-pricing! dept

UPDATE: Cerys from Kobo has responded with further details on the pricing bug and what Kobo is doing to rectify the situation:

A bug in our online system resulted in a small group of US-based customers being offered international pricing instead of their in-country pricing. In the large majority of cases, there was no price difference, but for some books where publishers set two different prices, the international one was displayed. This issue has now been resolved. We will be working directly with those customers affected over the next month to examine their accounts and provide them with a refund should it be owed. We will be contacting affected customers directly, but in the meantime if anyone has any questions related to their account, we ask that they please call our Support Line at 1-855-732-3662. 

Canadian ereader manufacturer Kobo hasn't really endeared itself to its customers in recent months. A few months ago, it botched the debut of its Kobo Touch ereader in Japan, falling well short of the promised 30,000 launch titles. In addition, its desktop software tended to turn new ereaders into shiny bricks. As the complaints mounted, Kobo's parent company, Rakuten, decided the best course of action was to hide all online reviews.

A new set of issues has arisen, this time centered around Kobo's ebook store. eBook prices at Kobo seem to be strangely liquid, responding to stimuli only known to Kobo itself. The Digital Reader dragged these pricing inconsistencies out into the open earlier this month. While holding off absolute judgement until more data was in, Nate Hoffelder took time to point out the mutating prices, which bizarrely increased for many logged in customers.

While some retailers like Amazon like to selectively discount prices in order to get you in the door, other sites like Kobo prefer to jack up the prices charged to their regular customers.

Earlier today Mike Cane hooked me up with a friend of his on Twitter. @RevBobMIB was browsing the Kobo eBookstore this morning when he noticed something odd. The pricing seemed strangely inconsistent, and after checking the price of the ebook mentioned above he discovered a fascinating secret about Kobo.

As you can see in this screenshot and this screenshot, Kobo offers some of their customers a lower price than the price offered to other customers. Here is a composite, and please note that I have seen these prices as well:

Hoffelder pointed out that prices may vary in different markets and some price fluctuation is normal, depending on geographic location. But Kobo's inexplicable price shifts aren't related to market or geographic variances.

Kobo is changing the prices shown to a single customer, browsing from a single computer, getting online from a single IP address.

This post generated plenty of response, including some commenters raising the theory that this was possibly a database bug and not Kobo attempting to draw in new customers with low prices while making up the difference by gouging returning customers.

After exchanging some emails with a Kobo programmer, Hoffelder was able to draw out the real story.

A lot has happened in the couple weeks since I reported that story. After exchanging a few emails with a Kobo programmer it became clear that this was not a simple bug, nor was it a consistent one. While I still don’t know how the bug works I do know that the simple and obvious solutions don’t fix it.

And oh yeah, the bug is still happening today.

So, not a "feature," but a bug. This clears Kobo of any ill will towards its most loyal customers, at least in terms of pricing. But, it hardly clears Kobo of any wrongdoing in terms of customer service. Digging into this a bit more, Hoffelder found evidence that this bug had been adjusting prices for at least a month:

My earliest confirmed report comes from MobileRead, and it is dated 10 September:

Is anyone else getting different prices on the checkout page? For instance, I want to get “Catching Fire” and it’s listed at $5.99. I click on the “buy now” button and the price jumps to $11.97. I contact Kobo’s customer service and they said that I should be logged in as to get the correct pricing. I log in and the same thing happens. I contacted them again, and they told me that the correct price is $11.97. But it’s still listed at $5.99?? Any ideas??

So Kobo has had this bug on their website for at least a month. As bad as that sounds the actual situation is very likely worse.

Some input from readers suggested the problem has been around for much longer than that. "Unverified reports" date the bug back as far as December 2011, and that Kobo customer service has known about the issue for at least 6 months.

Another report pulled from MobileRead (from February 2012) mentions something that sounds quite a bit like the price bug, but one that the purchaser didn't notice until it was too late.

Oh I had a similar issue. The price of the ebook I bought was much more lower on the website than what I was charged for on my credit card, that took a few weeks to resolve as well. They gave me a credit for the difference, but I did phone them about 4-5 times and emailed them at least once a week.

And then there's this, dating all the way back to December 2011.

When I go to the Kobo store I will see a book for $7.99 but when I log in the price updates to $8.99. Is this because the default price is in $US but when I log in using my Canadian they update to $CDN? I’m just wondering.

This doesn't bode well for Kobo's already-shaky customer service track record. A bug that alters prices not only during log in/log out but also during the actual checkout process isn't the sort of thing that should go unfixed for a month, much less (possibly) the greater part of the year. (Speaking of the checkout process, there's no verification screen during the purchase process. Once your purchase information is entered and the customer clicks "Buy Now," there's no turning back, and no way to verify the price is correct before it's charged to their card.) But Kobo seems very uninterested in providing even adequate customer service.

Based on my own experiences, the 2 readers who claim they contacted Kobo customer service are very likely telling the truth. I have seen in the past at least one occasion where Kobo customer service got a complaint from a customer, responded, but appeared to not have forwarded the complaint to the relevant party inside the company who could have fixed the error.

Speaking of Kobo’s questionable customer service, there was a period of at least 3 months last year where Kobo gave out this blog as the warranty repair site for the Slick ereaders. I kid you not.

I know a number of people will step forward to defend Kobo, but I’m not sure how. A month-long bug which over-charges some readers is indefensible. Customer service dept failing to forward a bug report is indefensible.

If you want customers, especially loyal ones who will increase your market through word-of-mouth, the worst thing you can do is subject them to ineffective customer service and a roulette wheel masquerading as a pricelist. There are still plenty of happy Kobo customers, but I wouldn't expect that number to grow anytime soon. And with this parade of misdeeds and miscues swiftly becoming the public face of Kobo, I fully expect that first group's numbers to start shrinking.

Filed Under: bugs, ebooks, japan, prices
Companies: kobo

University Requires Students To Pay $180 For 'Art History' Text That Has No Photos Due To Copyright Problems

from the total-failure dept

Brent Ashley shares the absolutely crazy story of how his daughter, a student at OCAD University in Canada, is taking a class on "Global Visual and Material Culture: Prehistory to 1800" which has a textbook that is required for all students... which costs $180. Now, we all know that textbook prices are absolutely insane these days, but here's where it gets crazier. The text -- and, remember, this is an art textbook has no images because they couldn't clear the copyrights:

This year, however, the textbook for Global VISUAL and Material Culture has no pictures. Students have been told that the publisher couldn’t get the copyright permissions settled in time for the print run, so students will have to read the book, and see the pictures online by following along on their computer.

There is no discount on the $180 price for an ART textbook that has NO PICTURES. Devoid of pictures. Bereft of art. If I am going to have to pay $180 for an art history book that is of no resale value to next year’s students, it had damn well better be an excellent visual reference with hard cover and full colour plates, to keep around for years, festooning my coffee table and that of my heirs.

Students in the class have put up a petition to protest what they quite correctly call a "sham." It's even more bizarre given that recent court rulings in Canada would suggest that the images in question would be given pretty broad "fair dealing" protections for the purpose of education. But, just the threat of copyright claims, apparently, are creating an absolutely ridiculous situation.

Filed Under: art history, canada, education, pictures, prices, textbooks
Companies: ocad university

Hachette Hits Libraries With 220% Price Increase On Its Ebooks

from the we-sell-books-for-a-living!-please-buy-fewer-titles-from-us! dept

Publishers are at it again, levying what amount to economic sanctions against that infamous freeloader hangout, The Library. In a move that will endear it to exactly no one, Hachette is increasing its back catalog prices 220% for ebooks, sticking it to the cherished public institutions whose shelves (including the digital ones) are lined with nothing but Lost Sales (apparently).

Hachette has been hard at work dragging its reputation through the mud. You may remember it from a few weeks ago, when it greeted Tor's announcement that it was going DRM-free with "HAHAHA but no, seriously, there will be DRM." This move seems ill-advised at best, what with some authors banding together to offer their titles to libraries for $dirt cheap, a price that falls more in line with the economic realities of the average library.

Hachette isn't the only publishing fish in the sea (and not even the only fish to jack up its prices -- Random House dialed its prices up 300% in March). Hachette is one of several publishers, many of whom haven't increased prices (or at least, not as severely). Of course, other publishers have gone other routes, including limiting the number of lends on their ebooks, making their digital offerings the equivalent of poorly manufactured physical books (Falls Apart After 26 Uses!). As a whole, the Big Six treat libraries like an intrusive vagrant.

So the current state of the library ebook market is this:

• 2 major publishers which charge high prices (Hachette, Random House)
• 2 major publishers which won’t sell at all (Macmillan, Simon & Schuster)
• Penguin, which is only selling ebooks to libraries grudgingly and with support for the Kindle explicitly blocked
• HarperCollins, which imposed a 26 checkout limit for library ebooks

I realize the publishers are running businesses, not charities, but those on the end of these price hikes are running something much closer to a charity than a business, relying on late fees, used book sales and donations to keep their shelves stocked. Considering many potential customers use libraries as tools for discovery, it would seem to be in their best interest to get as many of their titles in front of readers as possible, rather than price themselves out of a well-respected lending system.

Hachette's pricing "strategy" is doubly disappointing, considering it was once one of the "good guys:"

Hachette used to be one of the bright lights in library ebooks because they charged the regular retail price for their ebooks. And even though they wouldn’t sell their front list titles to libraries, at least we knew the titles would eventually be available. Only now those titles will be terribly expensive.

Christopher Harris, writing for the American Library Association, wonders if Hachette has forgotten how to publish.

Hachette is increasing backlist prices by 220% and … what? And we get ownership? And we get increased simultaneous lending? And we get anything other than another price gouge from a publisher that seems to not comprehend the basic fundamentals of publishing?

Let’s make this really easy to understand. Publishers publish content. Libraries buy content. As long as publishers keep publishing content, libraries will keep buying content. Why? Because libraries buy content. Only we buy it from a relatively fixed budget.

By drastically increasing the price of backlist titles, all Hachette is doing is reducing the funding that can go towards purchasing its new titles.

Harris points out that libraries aren't looking for handouts. They're looking for a mutually beneficial relationship, one that rewards publishers, readers and writers. But trying to turn a back catalog into a cash cow on the back of the library system helps no one.

That is why I cannot begin to comprehend this move by Hachette. Increasing backlist prices must either reduce the available budget for new titles or reduce acquisition of backlist titles—lost sales for Hachette either way. Furthermore, it reveals a lack of focus on the part of Hachette; instead of building profits on releasing the best possible titles every year, the company is stuck looking backwards. Finally, it shows a lack of understanding about the benefit of having more open access to backlist titles as additional entry points into new book purchases.

This short-sightedness seems to be more and more commonplace, especially in industries affected by digital disruption. The focus has shifted from building a sustainable business to concentrating on quarterly reports. Concentrating on immediate results tends to lead toward efforts that do far more long-term damage than any short-term gains can hope to balance out.

Filed Under: ebooks, education, learning, libraries, prices

Streaming Rights On Whitney Houston Movie NOT Pulled In Order To 'Make Really A Large Amount Of Money On DVD Sales' [Updated]

from the profiting-off-of-death dept

Update: Netflix denies this story, though the reporter stands by it. See update at the end.

We covered how Sony Music UK jacked up prices on Whitney Houston's music minutes after her death -- then changing them back and apologizing. However, in an even more extreme case, it appears that whoever holds the copyrights on the Whitney Houston movie, The Bodyguard has pulled those rights from Netflix, where it had been streamable (found via Karl Bode, but kudos to Dan McDermott who noticed the problem and found out the details from Netflix). The reasoning is that they figure lots of people will want to buy it now, and this is a chance to cash in on her death:

Netflix rep: "Okay Dan, I just went and talked to my main supervisor as to why the movie had been pulled and the reason it was pulled was the production company pulled the streaming rights from us because all the publicity after Whitney Houston's passing there was an opportunity to make really a very large amount of money on the DVD sales of her movies. So they're going to pull all the streaming titles we have of Whitney Houston so they can make more money off the DVD sales of her movies."

Now, watch the copyright holder complain that there's too much infringement of the movie as well...

Update: Apparently Netflix is denying the story though McDermott -- a long time reporter stands by the story. Netflix claims that the streaming rights to the movie went away last year when a licensing deal ended (and it is true that Netflix has lost some streaming rights in the last few months, though I have no idea if this is one of them). However, McDermott insists that he got the story from Netflix directly. As he told Andrew Couts at Digital Trends:

“I publish three newspapers and first started in news when I was news director at WLVA in 1987. I was aware of the sensitive nature of the story and was cautious and responsible,” McDermott told us via email. “The quote I printed is accurate. I cannot speak to whether the Netflix representative was telling me the truth but I asked him to verify what the Netflix users were saying (that it was pulled after her death) and the guy came back and said what he said. I tripled checked to get the quote accurate.

“He said that he had checked with two supervisors and that the ‘main’ one told him why it had been pulled.

“Personally I believe that the kid told me what his supervisors said. I can’t imagine that they were pulled after her death in some bizarre coincidence.

“Also, it is important to note that Netflix is not the bad guy in this. Unless they lie now.”

I guess it's possible that Netflix is right, and there was confusion on the part of the supervisors...

Update 2: Indeed, it looks like my guess was correct. Netflix was right, and the supervisors of the customer service guy were wrong. Dan McDermott has admitted that the report the guy gave him appears to be wrong. He reported it correctly, but Netflix staffers gave him incorrect info. The movie was pulled from streaming back in January...

Filed Under: death, dvds, movies, music, prices, streaming, the bodyguard, whitney houston
Companies: netflix

Sony Says Raising Prices On Whitney Houston Music Was A 'Mistake'

from the ya-think? dept

Following the news that Sony Music raised prices on Whitney Houston's music very, very soon after news broke that she passed away, the company has now said that it was a "mistake" and issued an apology:

"Whitney Houston product was mistakenly mispriced on the UK iTunes store on Sunday. When discovered, the mistake was immediately corrected. We apologize for any offense caused."

Of course, that seems to raise more questions than it answers. What kind of "mistake"? Human error? Did someone just accidentally jack up the price? Or was it someone doing it on purpose... and Sony now thinks that his or her decision to do so was the mistake?

Filed Under: death, music, prices, whitney houston
Companies: sony music

Sony Music Raised Prices On Whitney Houston's Music... Less Than 30 Minutes After She Died

from the shameful dept

It's no secret that the major record labels are a business where the bottom line is everything. However, they like to present themselves as something much more than that. They talk about lofty ideals of delivering culture, of sustaining art and of helping artists. But, when tragedy strikes... dollar signs seem to win over all. According to various reports, within 30 minutes of Whitney Houston being reported dead, Sony Music jacked up the prices on her Ultimate Collection album on iTunes and Amazon.

But instead of reverence in the wake of Houston’s passing, Sony chose to raise the price of one of her most popular hits collections. The Ultimate Collection album in the U.K. jumped in price by more than 60 percent from £4.99 to £7.99 within 30 minutes of Houston’s death, according to Digital Spy. The album price fell back down to £4.99 some time during the weekend, but it’s unclear when it happened.

Fans originally blamed Apple for the price hike on iTunes, but The Guardian is reporting that Apple automatically raised the price after Sony Music “lifted the wholesale price” of the album.

You have to think the price dropping back down was due to someone, somewhere realizing just how crass that looked.

Filed Under: death, music, prices, whitney houston
Companies: amazon, apple, sony music

Local Bookstores Call For Boycott Of Amazon For Advertising Their Prices

from the can-we-call-you-hollywood-video? dept

Amazon has faced controversy in the past. They've been involved in ongoing state sales tax disputes, mostly brought on by people who can't figure out what it means to actually have a corporate presence within a state. There have been patent disputes over one-click technology. Even issues of working conditions have raised their ugly heads. But now we will witness the most evil action ever by Amazon: price advertising.

Yes, according to a Huffington Post piece, we learn that Amazon is seeking to make lower priced versions of retail goods easier to find for customers. They've released their Price Check App for smartphones. You'll never guess what it does...it does price comparisons for you! It works like many similar apps, utilizing the phone's camera to scan the barcode of items in retail stores and then listing any identical products and their price through the Amazon online store. Fortunately, we consumers have a savior from this superevil, money-saving device that certainly isn't the first of its kind.

Yes, retail bookstores, in what may be the single most backward thinking request of all time, are asking the general public (i.e. customers) to boycott Amazon due to the release of this phone app. For those too busy playing solitaire to really think this through, let me break this down for you. Amazon can offer goods at lower prices than many retail stores, they release an app that allows consumers to verify whether that's the case on an individual product, the customer stands only to save money through this app, and retailers are asking customers to boycott the company saving them money over it. It'd be like boycotting a doctor for offering a cancer cure because, well, what about all the other doctors who have been making money offering chemo treatments?

Now for the fun part. Some quotes from the article.

"This Saturday, Amazon will offer Price Check customers an extra incentive: up to five dollars off products whose barcodes are scanned using their app. The effect of this is to encourage consumers to use their local brick-and-mortar stores as "showrooms," while not spending money supporting them."

Gasp! Encouraging folks to browse stores for items and then price shop them to get the best deal? And, more to the point, actually providing the consumer with the tools to do so? It's like something Lex Luthor would do! Where the hell is Superman to stop this dastardly customer-friendly company?

"David Didriksen, president of Massachusetts-based Willow Books & Cafe, told Publishers Weekly that the offer is “another in a long series of predatory practices by Amazon. You would think that a company of that size would be willing to just live and let live for small retailers who can’t possibly affect them. But, no, they want it all.”

Uh oh. Apparently Superman got hit one too many times in the head. What does the size of a company have to do with anything? Either you can compete with them, or you can't. And here's a fun question: what competitive act has a company ever taken in the existence of business that couldn't be called "predatory" by its competition? And, to put the ridiculous cherry on top of this nonsense sundae, Amazon's $5 off offer doesn't even apply to books!

Maine Senator Olympia Snow, seeing something grand and wishing to stand on it, called on Amazon to cancel the promotion because "paying consumers to visit small businesses and leave empty-handed is an attack on Main Street businesses that employ workers in our communities.”

First, Amazon isn't paying them to leave a shop empty-handed, they're promoting their new phone app and offering a discount on purchases made using it. Secondly, Amazon employs folks too, the overwhelming majority of them in the United States, so put the jobs nonsense aside as well. Maybe we should go back to bookstore owners to find a real idea on how to compete with this app.

"Meanwhile, Third Street Books in McMinnville, Oregon has chosen to mark Amazon's Price Check offer with a counter offer of their own: on Saturday, customers will get 15 percent off their purchase, plus a $5 gift certificate. All they have to do is provide proof that they have cancelled their Amazon account."

Uh huh. Let's ignore the fact that Amazon provides much more than books, so your coupon doesn't have all that much value over an Amazon account. Let's ignore the fact that there are several other barcode scanning price check apps already on smartphone markets. Let's ignore the fact that Amazon's $5 promo doesn't apply to books. Let's ignore the fact that, even if we grant that droves of customers are going to spend hours mulling through retail bookstores scanning book after book after book, don't folks do the opposite all the time? Who doesn't browse or search products online and then go buy them retail, either for convenience, for atmosphere, or because they don't want to wait for the product to ship?

Perhaps its time local bookstores concentrate on what they can offer to compete with Amazon: their atmosphere. Not unlike the home-viewing vs. movie theater quandary, mom and pop bookstores can add value to the shopping experience. They can have staff picks of books, offer advice on purchases, offer reading clubs and writing classes, sell rare/used books, partner with food vendors for things like coffee, have book-signings, etc. So stop trying to convince your customers to boycott another company for making their lives better and start competing by also making consumers' lives better.

Filed Under: bookstores, price comparison, prices
Companies: amazon

High Prices, Lack Of Availability Driving Lots Of Infringement

from the well,-duh dept

As we've seen before, if you make authorized content available in a convenient and useful manner, it can really help minimize infringement. Of course, if you don't make it available, or if you price it wrong, it just makes the problem worse. A new report out of the UK took a look at the availability and price online of some top films and found that the movie industry isn't doing a very good job, likely leading to much greater infringement.

DVDs are available for just shy of 100% of the films. But a wealth of British cultural history is simply not available through legal providers. Only 43% of the top 50 British films can be bought or rented online. Similarly, only 58% of the BAFTA Best Film award winners since 1960 have been made available.

The situation looks worse if iTunes is discounted. Excluding iTunes, only 27% of the BAFTA award winners are available, with 29% of the best British films. Only 6% of the best 50 British films are on Film4 OD or Virgin Media, with 14% available through a LoveFilm subscription and 4% through pay per view on LoveFilm.

The industry wants so badly to blame infringement for many of its structural problems. But, perhaps if it just focused on making the content available in a convenient fashion at a reasonable price, they'd realize that it really was just a business model issue all along and had nothing to do with "piracy."

Filed Under: availability, infringement, prices