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Exchange Rates Play With Online Music Prices
EconolineCrush writes "Those looking to purchase songs online may find that the price of music downloads varies quite a bit from country to country. Most vendors seem to be favoring 0.99/track pricing schemes, but $0.99CDN is worth quite a bit less than 0.99 British Pounds. When indexed to the US dollar, Canadians using Puretracks are getting a bargain with tracks costing only $0.76US, while UK residents using Coke's new music store are getting ripped off at nearly $1.80US per song. iTunes and Wal Mart sit between the two, with tracks selling for $0.99 and $0.88, respectively."
I guess maybe we'll have put region codes on music, so we can maintain price discrimination, like on DVD's.
What?
I have never noticed the pricing in CD's to be flexible with the exchange rate either.
The pricing trends you mention are more proof that pricing levels are primarily set by "psychological" price points.
I don't know if these price points actually maximize profit or sales but it seems that most retail goods follow this same model. $199 for consumer electronics, the $999 pc, etc.
The marketing dept sets the prices.
Add to that US-$ 22.50 here in Australia.
While it may seem to someone in America that the UK may be overpaying for their online music, it probably doesn't seem that way to someone actually in the UK.
Take games for example. Here in Aus, an average new-release game sells for ~$99, give or take a few dollars due to the store policy or whatnot. Yet there's no outcry "OMG Australians pay $75US per game RIPOFF!!!11!!".
I think we pay this much as a reflection on the average earnings of an Australian, and by our standards, $100 isn't an exhorbitant amount for a single game.
I'm sure the 99 pence songs are seen the same way in the UK. Expensive when compared to the American dollar, but reasonably good value to an average Brit.
I've been doing an ongoing series of reviews of online music services (iTunes, Napster 2.0, Wal-Mart, Bleep, EMusic, and Audio Lunchbox so far), and one thing I've noticed is that a fair number of these sites are entirely unavailable to international customers. Either for DRM reasons or for simple payment processing issues.
It seems to me that there is a huge untapped market overseas. The traditional distribution mechanisms are even more disadvantaged when compared to online stores, as the cost of transporting physical goods is significantly greater than moving a digital copy. This is just one more area in which the companies that can move the fastest toward the new media stand the most to gain.