The Federal Government has finally declared an open season in the software distribution game. Ah! You’ve got to love the decisiveness of it all!
It took Senator Alston’s office and its supporters-in-legislation, the Democrats, almost three years of unconvincing processing of recommendations and counter-recommendations to work out that the ACCC may have a compelling case for the Senate to enable open-slather importation of copyright software in order to bring local software prices in line with the international standards. Except that, from the industry’s point of view, the case is probably not as compelling as it seems.
While parallel importing has been a regular occurrence in the Australian IT channel, research has shown Australian software prices to be quite competitive relative to overseas pricing, currency fluctuations and local economies of scale.
Price may have been the key motive of the practice in times when margins were a lot fatter than today, and price and consumer benefits are certainly the central tenet of the upcoming legislation. But the question remains: will the perceived benefits of parallel importing for the channel be enough to offset a range of potential problems such as the importation of pirated copies, the likelihood of lack of advertising, in-store merchandising, and telephone support, and problems with the return or exchange of such stock?
These days, margins are already tight enough to make parallel importing a no-win situation for smaller resellers. On the other end of the channel, the legislation would enable mass merchants and distributors with the existing software agreements in place to explore parallel importing as an additional path to software revenue. However, that value will have to be extracted from the market at the price of jeopardising their relationships with software vendors, as well as at the expense of the lower-end of the channel.
If and when the legislation is passed, consumers will be its net beneficiaries. Although they’ll have to face the dilemma of price vs support value of parallel-imported software, history has shown that consumers go for price almost every time. But history has also shown that the parallel importation of software didn’t work in New Zealand, which passed a similar legislation back in 1998. One thing is for sure: come May, and our perspective on the issue will become a lot clearer.
In the meantime and on a totally separate topic, I would like to make an exception to ARN’s policy against self-congratulatory behaviour and congratulate our news editor, Brett Winterford, on two well-deserved gongs at the inaugural IT Journo-Sun Microsystems IT journalism awards held last week in Sydney. Brett’s Best Technology Business Journalist and Best Technology Journalist Awards are witness not just to the talent of an up-and-coming journalist, but also to the vibrancy of our industry and the close connections our team has built with the IT community over time.
The award comes in the wake of similar recognition of ARN and its sister publication Channel X last year, when — in amongst the spate of six additional awards — our former technology editor, Georgina Swan, was crowned the Business Journalist of the Year at the annual Walkleys for the specialised press — the Bell Awards.
So, without meaning to turn this into a pale copy of a run-of-the-mill acceptance speech at the Oscars (joyful sniffing and numerous 'love yous' included), I would like to thank you all for your support, loyalty and — most of all — for your trust in ARN. Without it, there would be no ground for our team to reach the heights of excellence we have repeatedly been recognised for. Cheers!