Fears of fueling the rampant movie piracy business in places like China and Hong Kong likely prevents Apple from offering movie downloads in most of Asia.
|No iTunes Movies For Asia|
Although an Apple representative would not comment on the piracy issue in a report on Yahoo! News, it is difficult to imagine Steve Jobs and company not considering the prospect of feeding movie releases to mass duplicators just as their DVD counterparts hit the shelves at Wal-Mart.
Licensing agreements also have caused problems for Apple, as recording labels in Japan have shunned iTunes in favor of other outlets. A weak presence in the rapidly expanding Asian Internet market keeps Apple from profiting from that userbase.
“We cannot comment on the specifics but it is true that iTunes is not available in Asia,” Tony Li, Apple’s marketing director for Asia, said Wednesday. “That goes for music and movies.”
Piracy has been a long thorn in the paws of the entertainment and software industries. While the various high-powered executives in those industries covet the potential profits to be made from a fast-growing market, the loss of control over their digital properties outweighs the benefits right now.
In Apple’s case, the issue cuts them much more severely on the hardware side of the business. The iPod has rescued Apple from its doldrums, thanks to healthy profit margins on the hardware. Apple earns only a nominal profit from songs on iTunes, reportedly just a nickel per song thanks to the hefty cut of each sale the record labels take.
Without iTunes in Asia, there is little motivation for consumers there to purchase an iPod. China’s Internet userbase has been estimated at over 100 million people. It’s hard to believe there aren’t enough of those users willing to try iTunes and buy an iPod to make it profitable for Apple.
That would mean the content providers, like the music labels and movie studios, probably are the ones standing in Apple’s way. For users in Asia, that’s just too bad for them.