Lots of Apple talk on the web these days, about an Apple store opening at the remodeled Qianmen before the Olympics and talk about what a Chinese version of iTunes may mean to those in China. First, an simpler to deal with, is the Qianmen store, news of which comes way of (hat tip to China Economic Review). It will be great for Mac to finally have its first official presence in China, though current authorized sellers like Dragonstar have done a good job at replicating the Apple store image in China. It will be strange having an Apple store which won’t be selling iPhones (unless a deal can be reached by the time the store opens) and won’t be using iPods to promote iTunes. At the same time, it will be awesome to finally have a REAL Mac presence in China.

As for iTunes, well, that’s connected to part 2 of the China Game’s post regarding Apple in China. I’m sorry, as I said before, the China Game is a great blog, but as a fellow Mac lover, I can tell we have a divergence of opinions on the impact Mac can play in China. In the entry, China Game talks about renting DVDs through iTunes as a great option and possibly the way to fight counterfeit DVDs in China.

There are a number of major problems with this idea that China Game doesn’t touch on or glazes over. The biggest is that he claims that pirated DVDs purchased in China are low quality and typically “shot inside a movie theater”. I wonder when was the last time he bought a DVD in China? I’ve bought over 50 DVDs in the past 6 months (don’t tell Hollywood!) and out of those exactly 1 didn’t work and 2 others looked like they were shot in a movie theater. The majority are excellent, high quality and come straight from real DVDs, often they even turn out copies of awards copy videos provided to the judges of the Oscars and other awards shows. Some stores even offer a choice between DVD-5 for between RMB8-10 and a higher quality DVD-9 for RMB16-20. Out of all the DVDs I’ve bought, the only one that didn’t work came from the guy selling DVDs outside of the Guomao subway many nights for RMB5.

Would I choose to pay RMB21 or more (the equivalent to US$2.99) to rent a movie online or would I prefer taking the (relatively small) risk of buying the RMB5 DVD on the street? Umm, I’m going with my street seller everyday, but that’s just me. In a move to combat pirating, Hollywood came out with RMB20 versions of popular movies with no added content other than subtitles and these failed miserably, what makes anybody think people would download movies for the same price (or more)?

iTunes taught many Americans that paying for music and movies online is the thing to do. No viruses, guaranteed quality, no chance of lawsuit, and a low price was better than the great abyss of downloading music/movies. Even if every Chinese is given an iPod and an internet connection that will automatically hook up to iTunes, it won’t teach Chinese to pay for what now is free for them. There are too many sites that link to free mp3s, even major sites like Baidu, Sina, and Yahoo.

This is another huge problem, music. iTunes already carries a limited selection of popular older Chinese music and newer, cutting edge music. They charge the usual $0.99 per song and $9.99 per album, how could they go about charging ¥0.99 for the same song in China? If they charge close to the equivalent of a dollar, say ¥5 a song, very few Chinese would go for that. If they did go with ¥0.99, would they include all western music? If so, they'd need to do something to prevent foreigners from getting on the Chinese version to buy the cheaper songs. Even if there was a Chinese version, it would be hampered by the fact that so few Chinese have credit cards that could be used to make online purchases.

iTunes revolutionized the way Americans (and Europeans) bought music, but the heights that must be climbed to change China seem too high even for Steve Jobs to scale. Yet reading about the lawsuit that Baidu, one of the most popular sites for downloading illegal mp3s, faces from the Chinese music industry, well, nothing is impossible.

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