There will always be variations in how much goods and services cost, across continents, countries, regions - even cities and towns.
For a few decades now we have been used to physical goods being cheaper in some places. Often a country where a good is manufactured gets a better deal (though not always - ask the Japanese).
For that reason we have seen plenty of stories about 'rip off Britain' in the press in recent years. It holds for cars, clothing and other goods. To prove this theory, there is the occasional exception - for example, Body Shop products are often more expensive outside the UK, their home base.
When it comes to software, the ire of the average buyer has been raised. Why, one might ask, is a software package more expensive in the UK than in the US? More often than not, vendors would give a uniform reply: localisation. Even adding all those awkward u's to 'colour', 'neighbour' and so on has a cost, it seems.
We can just about swallow that one.
But when a song, in essence a piece of software that doesn't need 'localising' and for which there is no transport cost when sold digitally, costs more in one country (above and beyond exchange rate fluctuations) than another, consumers are justified in feeling upset.
So are watchdog organisations. Cue the Consumers' Association's move to refer Apple's iTunes to the Office of Fair Trading in the UK. They and thousands of others have worked out that 79p in the UK is more than 99 eurocents - which by the way is more than $0.99 in the US.
Should we blame Apple? In part but the company supposedly doesn't make any money from the software here, only from the related sales of its iPod players. It does, however, have a relationship with the record companies and they together take the stance that comparisons across countries don't matter, only 'value' within a particular market.
This publication disagrees with such a stance.
A company such as Apple has done very well with its iPod and iTunes service. It may think it should squeeze everything it can out of any market. But while differences for a digital product across small distances are just plain wrong (and how many of those tracks are by British artists, we wonder?) over-charging is also bad business.
Only today we hear that Stelios Haji-Ionnou's easyGroup will kick off its easyMusic service before the end of the year, as first reported on silicon.com here, with the help of long-time iTunes pricing critics Wippit. Expect others to exert pressure on what is still expensive music.
Apple should realise that healthy legal music at a decent price is ultimately good business for it. After all, it's not like the company hasn't previously blown a market it once bossed.
Comments
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1. Charles Arthur
Very easy to criticise Apple on this: they have the store, which has a high media profile (although: have you ever seen an advert for it?).
However, I think that when you see the figures for how much Apple gets to keep from each transaction in The Independent on Monday 20th, you'll have to come back and edit this piece.
[Ed note: The piece does already mention Apple's margin on each track sold but our point is that Apple has an influence which it doesn't use properly here.]
2. anonymous
Consider a few things:
1. The labels set wholesale prices in the UK and Europe;
2. Those prices differ across territories;
3. Apple is actually selling downloads in the UK below its cost.
3. Richard Bonar
So Apple are charging 79p for their Itunes as opposed to 99c us which is apparently....... 55p in direct comparison.
Well I don't pay anything for my mp3s and if Apple think well intentioned customers will put up this perhaps they're in for a rude awakening.
If you've duped by this get yourself a copy of kazaa lite+++ and get as many tunes from any artist as you like for free!
4. anonymous
US software is rarely localised for the UK market so there should be no extra cost. Clearly software has to be for any non-Anglophone market - yet the price is still lower in some of these non-Anglophone countries. Why?.
Apple do localise Mac OS but I don't know how much more expensive it is than its US counterpart. Microsoft deign to provide British (aka "real") English dictionaries for Office products but we get the US version of Windows otherwise. We Brits buy enough copies of Windows to make localisation cost effective. Perhaps if the Government threatened to switch to Open Source wholesale (like the Norwegians did because Windows wasn't available in Nynorsk) they would suddenly find a way to localise Windows for British English - and it should be no more expensive because the volume is sufficient. But let's be realistic: this is rip-off Britain...
5. Diarmuid Mallon
Erm... No one thought to look at the record companies. Apple wanted to launch a europe-wide store, but it was blocked/delayed by the record companies. Yes iTunes are cheaper in France, but so are CDs. The Record companies fix the price, and in turn have forced Apple to pass them on to us.
On a similar note, the reason why the indies are so poorly represented is that they refused to sign with Apple for the launch as they have a number of outstanding demands, including wanting to charge MORE for some tracks. They only signed up in the last few weeks, and now they complain that they are poorly represented.
These record companies certainly want to have their and cake and eat it.
6. David John
Apple only have themselves to blame.
They knew from the start that the margins were practically non-existent because of the ludicrous licensing costs that the major record labels insisted on, but they chose to go ahead with their music store anyway, simply as a loss leader to sell iPods.
By using this old trick of localisation to increase their margins Apple have displayed the same contemptuous attitude to the consumer as that of the major labels themselves and it's time that the iPod-buying apologists woke up to that fact.
In the long term, Apple have done musicians and music-lovers a huge disservice by propping up the majors just to perpetuate their own hip image.
Now that Apple have provided a new revenue stream for the majors, they should be trying to exert their influence to lower licensing costs (just as MTV did in the 1980s, when the labels ended up paying them to show videos) rather than looking to the consumer to pay more just to support their flawed business model.
7. Joel Watson
Has anyone considered this side:
The internet is a global marketplace and by its very nature eliminates the primitive ideas of borders and legislature. I think (not that i use I-tunes... dont get me started on charging money for something you don't actually receive a hard copy of...) that there should be once currency used (ie dollars as there are probably more users in the US than here in uk) and one price charged, regardless of whether you're in America or Algeria. Apart from anything else, it would prevent this very sitaution from occurring in the first place.
8. Phil Tarbrook
Wow is it me or do I recolect that other "well known" Venders charge £0.99 PLUSS a monthly subscription FEE...Hummm/however way you look at it Vinal was OK....I wonder what format is comming next.....!!!