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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 $0.88, respectively."
Why pay at all?
I have been pwned because my
While CD-prices differ widely in comparison - at 1996 exchange rates, a normal CD cost
below US-$ 16.00 in the USA
US-$ 14.00 in Canada
US-$ 25.00 in Japan
US-$ 23.00 in Germany
US-$ 24.00 in the UK
Source
Note, the data is indeed eight years old. (jeeze, was 1996 that long ago?) Pardon the US bias, but this still seems to reflect what I understand are current retail prices.
--H
Probably the companies spend more/less money in hosting website in those countries ... and are passing on the cost/savings to the customer.
... we are talking about the music industry
Oh wait
..and with a global economy, one can only assume it's a matter of time before the formation of some semblance of world government.
I guess maybe we'll have put region codes on music, so we can maintain price discrimination, like on DVD's.
What?
go to canada download the songs on a service that allows you to share the files or burn them to a cd and then head back to the US.
Custom Officer: and what is the purpose of your visit today sir.
Me: to download music
30% Troll, 50% Underrated, 10% Interesting
Score:5, Troll
Since now the Canadians are going to realise they should charge more, my tactic of shopping at eBay.ca won't work anymore! Gone are the days I could bid 7/8 of what I'd pay in the US and win!
;)
Thanks a lot Slashdot!!
libertarianswag.com
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.
I'd think that the online vender's would change price based on currency. I mean, sure they get great extra money from Britan, but they are getting themselves ripped off from Canada. I mean really, Britian is getting ripped off. Someone should have done something by now.
http://www.beyourowneviloverlord.tk
http://www.frozenchickenthrowing.tk
http://www.killercamel.tk
Russia's entry into online music: 1000 tracks, $14.95 per month OR a penny per megabit. Feels slimy but generally agreed to be legit.
sarchasm: The gulf between the author of sarcastic wit and the person who doesn't get it.
How is this news? People do realise that the price for petrol/gas is Europe is much higher than the U.S? That a reasonable dinner in a restaurant in Australia will cost you about $15US, which is really $10US or so? (But you don't get free refills)
The article doesn't even bother telling us how much a CD costs in the UK or in Canada. Without adding relevant information it's just more noise.
Here, random link with useful comparison info: some cruddy commercial store
Allofmp3.com, in Russia, at a penny a MB will get you a whole album for under a buck. And it's easier enough than filesharing to make paying worthwhile. (Legal, too, if you're the type to let laws decide your actions.) Why the hell would I pay 99 cents a song?
Tom Swiss | the infamous tms | my blog
You cannot wash away blood with blood
What ever may be the price I don't see a point in buying crippled music. The cost is relative. The amount of salary that people draw in their respective countries would also differ. BTW did you know that drugs(as in prescription drugs and generic ones ) are cheaper in canada than in the US.The same case is with books. In any case crippled music is worth nothing to me.
Sure the exchange rate might give Canadians a bit of a deal but the extra 'fees' on blank media we pay makes it so we pay twice or three times for the music. Recently there have been $25 fees added to ipods and the ilk but downloading was also decided to be legal in Canada but uploading is not. CD-R's went up in price a couple times as well with the money going to the recording industry. Who would be silly enough to pay to download in Canada when the Canadian RIAA already has us paying since everyone already downloads for free according to them.
I am going to hell and I am going to take all of you with me.
I can't imagine why anyone would support Walmart. They are taking a loss just to cut down the competition because they can. Apple takes a loss to sell iPods, WTF is Walmart trying to sell (besides the soul of every American consumer)?
Hopefully more record labels will join the fight against the RIAA like New York's GoKart Records.
Sound waves should be free!
The Inquirer has many articles about how the British and others routinely get shafted due to companies using exchange rates to their own advantage.
how do they handle CDs with lots of "filler" (like 30 s) or even short tracks (~2.5 m)? The new Best of Guided By Voices CD is one cd with 33 tracks on it. Does that mean its $33 purchased electronically?
How about making copyright reform a central issue in the upcoming election?
Very likely most politicians don't know if the DMCA is fit to eat, feel Disney and the RIAA are important campaign contributors whose requests should be given priority, and music downloaders are simple thieves who deserve every bit of punishment they get.
You can change that. But it's going to take some work. There are enough people sharing music in America - more people than voted for George Bush - that if you get off your collective asses and get politically active, you can get laws passed to get the RIAA off your back.
In Change the Law, I explain that copyright is not a Constitutional right, like free speech. Instead copyright is allowed (but not required) to serve a useful purpose, a purpose which I feel has long since outlived its usefulness.
I suggest steps you can take to bring about copyright reform, ranging from speaking out to practicing civil disobedience.
One thing I'd like you all to do today is to write your elected representatives to ask their opinion of the current state of copyright law given its widespread abuse by organizations like the RIAA and MPAA, and to urge them to work towards copyright reform. Let them know your vote will depend on a positive response.
When you're done writing that letter, write to the other candidates for each office in the upcoming elections, to ask them the same question.
Sixty million American peer-to-peer file traders have the potential to raise a lot of Hell with the politicians. I want every candidate to be peppered with questions about copyright reform at every campaign stop and in every press interview. I want the repeal of the DMCA to be discussed in the Presidential debates.
People marched in protest when Dmitry Sklyarov was arrested. Dmitry is free now - but the law under which he was jailed is still on the books.
If you agree with me that something needs to be done about copyright, I need your help.
Thank you for your attention.
Request your free CD of my piano music.
Ack, due to Russian music laws, people using www.allofmp3.com in Russia can pay 1 cent per megabyte of mp3 or ogg or whatever, legally. However, once you download any of that into your American computer, its illegal since the RIAA isn't getting its "proper" share of the money.
The _current_ exchange rates and the _theoretical_ exchange rates are quite different. The current exchange rates are either determined in financial markets or by governments, according to the conditions of the international payment balance.
The theoretical exchange rate is commonly called a PPP (power of purchase parity) exchange rate, and is evaluated by comparing the cost of simmilar baskets of products in different countries.
This can be tricky, as seldom the very same product exists all over the world - and if it does, the costs involved can be very different because of relative prices. "The Economist" often publishes the Big Mac Index, which attempts to estimate the theoretical (PPP) exchange rate comparing the prices of Big Macs all over the world - since it's a product that's pretty much the same everywhere and involves the same costs.
When current exchange rates are unbalanced, there's a strong effect over the importation/exportation ratio. In Brazil, during the mid-90's, US$ 1 was approximately R$ 1, which was totally insane in PPP terms. It was a time during which everyone bought imported goods insanely, and travelled a lot abroad - while people coming to Brazil, specially from other latin american countries, could barely afford a can of coke. That happened because the government wanted to control inflation - and it pretty much worked. But after a while, it lead to a major financial crisis, because there weren't any dollars to pay the importation - exportation balance, and they had to let the dollar rate fluctuate in the financial markets.
If one was to do a very extensive PPP research that took into comparison prices like this, perhaps some of these distortions will be elliminated. But then again, there's the "just under 1 buck" factor. In any case, this should serve as a big caveat when comparing cost of living in different countries.
I'd love to pay 0.99 yen, pesos, or lira per song!
It's still nothing compared to consumer electronics prices.
;)
:( Fscking extortion.
For a long time people were used to prices a little bit higher in euros than in dollars. The explanation was that it's to compensate for exchange rates while USD was for a couple of years about 1.1EUR or so. Now, that 1EUR is already more than 1.25USD, most vendors didn't even change their prices, and some changed them to ``uniform prices'': e.g. Palm T1, T2 was $399 and 399eur at the time of introduction.
Now finally new Palm models are priced according to exchange rates. Did enough Europeans buy them via eBay with shipping to Europe?
But my favourite digicam Canon EOS 300D was still $800 and 1100eur last time I checked -- half as much
Robert
Bastard Operator From 193.219.28.162
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.
the only reason that this matters is because of the non physical nature of the product. its not as easy to buy a cd from another country and have it shipped to yours and still save some money. but its no harder to purchase a music file from another country and download it.
does this mean that we will soon see a dvd type drm that will restrict what region you can play a file in?
~Tommy Boomfiger http://www.gotapex.com/forums
Excuse my skepticism, but I don't believe for a minute that WalMart is selling at a loss. The bandwidth certainly does not cost $0.88 and pretty much everything else is in imaginary costs that can be adjusted to any value between zero and infinity.
Is this a sigs-optional kind of place? 'Cause I am totally down with that if you know what I mean.
Did the person who posted this article know what they were even talking about? This isn't news... as the parent said it's "obvious". But really the whole story is mistitled and makes no sense really. Exchange rates cannot play with the price of music, that's not possible. If you are getting charged $.99 a song it doesn't matter where in the world you are you're going to pay the equivilent of $.99 a song in whatever currency you use. Only when a company sets different prices for different countries do discrepencies in price arise. It has absolutely nothing to do with exchange rates. Sure if you charge x.99 where x is any currency symbol, then you are going to have fluctuations in price from country to country, but what company actually does that? None that I have seen. This isn't news, it's nothing noteworthy at all.
Actually it would mean you're paying more per song then we are.
.99USD, About 24% more.
0.99 EUR = 1.225 USD
So you guys are paying slighlty more then our
2 key points:
- We now have a preemptive doctrine, and our intel clearly shows that the Brits have the bomb.
- "Keep your friends close, and your enemies closer." An old adage, and who has America kept closer than the good old U.K.?
Look out, limeys.Feels slimy but generally agreed to be legit.
What do you mean by legit? Do you mean, they won't steal our credit card numbers (p.s. AmerExpress & Discover allow for 1 time use only credit card numbers), or do you mean that this sale of music is 100% legal in russian and there is nothing the RIAA can do about this (until they pay someone off)?
From their website under "legal":
"All the materials in the MediaServices projects are available for distribution through Internet according to license # LS-3I-03-79 of the Russian Multimedia and Internet Society. Under the license terms, MediaServices pays license fees for all the materials subject to the Law of the Russian Federation "On Copyright and Related Rights". All the materials are available solely for personal use and must not be used for further distribution, resale or broadcasting. Users are held liable for the use and distribution of the MediaServices site information materials according to local legislation."
OK what about 6 months ago when everyone was complaining that CD's were $18.99 and that's why we downloaded music off kazaa? Did music suddenly become cheaper, or is it that once downloadable albums appeared for $10 bucks, now we're complaining because they're all only $9.99 at best buy?
He asked, really he did!
Request your free CD of my piano music.
I know the article is on exchange rates, but there is a site doing (or claiming to do) dynamic pricing based on demand.
.10 / track promotion.
.10 (albeit almost all songs are in crippled WMA format with limited burning capabilities). News.com.com story here.
www.musicrebellion.com
Obligatory disclaimer: I have no connection to musicrebellion.com. I just bought a dozen albums from them during their
The basic idea is that popular songs will rise in price, while less popular songs will decrease in price. To start things off they had a promotion where all tracks were
The thing that bugged me about Music Rebellion is that after the promotion ended everything immediately jumped to 90-odd cents.
I disagree strongly with that, as they have now given me little incentive to use them over iTunes. I'm willing to give them my business for some of the obscure Christian music I listen to if it's dynamically priced at 20-35 cents per track. Otherwise I'll save the WMA hassle and go iTunes. Unfortunately, the news.com article listed a floor of 50-75 cents per song (citing wholesale cost).
What I did like about them is that their customer service was responsive (some licenses didn't download correctly), and their selection was comparable to Apple's. They also seem to have some indie music promotion.
However, iTunes is so well designed (not relying on MSIE for downloads or WMP for burning) that I haven't had to use their customer service.
- Neil Wehneman
My legal education, in nifty podcast format
The author is using the lense of exchange rates to say that Candians are getting music cheaper.
This is wrong for two reasons. First, the advent of the Internet and its subsequent use as a distribution method of music has made music an information good. All music is charged at a monopoly price because the price at which music is sold is above the marginal cost of production.
Second, because all music is priced at a monopoly price, what is a "bargain" or "being ripped-off" is moot. We are all being "ripped-off" when we purchase music because we're paying above the marginal cost of production.
Yet the problem with information goods is that information is expensive to make and easy to deliver.
The story about price differences between countries is not a story about exchange rates, nor a story about getting ripped-off or getting bargain prices. It's a story about price discrimination.
In monopolies, price discrimination is good because it allows buyers to pay for the good at their respective reservation price. For instance, everyone needs water piped to their homes for say, $50 a month. The monopoly must charge that price for everyone and can't price discriminate (e.g. charge a different price for everyone). This type of monopoly is inefficient because those that can't afford $50 go without water, although the marginal cost to give that person who can't afford water is nill. Yet with the advent of digital technologies, global distribution and subsequent pricing has changed. Companies that want to sell music to different markets according to that particular market level of income can do so.
Compare music pricing to regional encoding and DVD pricing. It's the same story.
Anyone tried musicrebellion.com? Most songs are only 10 cents and the price goes up with demand. I think that is a neat idea, making popular music slightly costlier than niche music. Why should there be a flat rate?
All your favorite sites in one place!
If record companies were really competitive, CD prices would be close to the cost of production (including salary of musician and others, not just pressing plastic of course). In fact, they would often sell below cost, hoping to make it up with some especially popular albums later and we should see a big label go bankrupt once in a while.
In that case, if a label can make ends meet by charging $0.99CDN, they wouldn't charge a euro for the same song in UK, lest the competitors beat them on price. We would also see $0.10 loss leaders with decent music who hope to grab the market share and then somehow raise the price and/or lower costs.
Nothing more to say except hope that smaller labels take hold and make some music that is worth itds price.
That's a good point. We already pay the RI-eh-eh to legally download our music, so why would we pay extra money to someone like Puretracks?
Puretracks must be there to undercut the global market, or for Canadian schmuks who believe in a capitalist free market so much that they want to pay $US0.76 per track anyway.
Meanwhile, the rest of us legalized pirates (dirty commies) will buy CD-Rs and iPods and watch our money go to Martingrad to pump up a centrally planned slush fund which will help us achieve our 5-year plans.
(FTR, I don't believe in downloading music without compensating artists (record labels can whither and die in this info age for all I care) and I don't believe in undercutting the free-market with a inherently doomed centralized wealth redistribution system and think our country totally sucks in this regard.)
Why not use a Canadian proxy server that will let you download music from puretracks.com. There are lots of free, public proxy servers with Canadian ip addresses.
If only the trading of music files were a liquid market. This would be a perfect arbitrage situation. Basically, buy it from one country at a cheaper rate [relative to another country's rate] and sell it there and make the profit. I mean, the profit in Foreign Exchange market works are fractions of a cent, a difference of 20 cents in some cases for music file would be an enormous take on the arbitrage.
argh..this is how I know I've spent too much time working in this industry...
_______________________________
"I'm not Conceited...I'm just a realist..."
We have been in a global economy since the shipping innovations of the mid-nineteenth century and British Imperial hegemony promoted truly intercontinental trade. For all of you who think that the internet fundamentally changed how the global markets worked, please review the historical impact of telegraphy. Its huge significance can hardly be underrated, and pretty much everything that Silicon Valley "visionary" philosopher/prognosticators claimed would come to pass with the invention of the internet had already happened with in the age of global telegraphy. I don't really have much respect for those rag writers, they apparently had neither technological competency (otherwise they'd have been tech workers during the bubble) nor had they a strong historical/social science backround, else they'd realize that most "big new things" have historical precedent. For reading on the telegraph see esp. Tom Standage's Victorian Internet for a fun overview of the technology and its economic impact.
Your moniker is "Dutchmaan" so presumably you should be aware of the hegemony of the United Provinces, way back between the fall of the Spanish and the rise of the British Empires? Dutch hegemony was based on international banking and shipping, way back in the seventeenth/eighteenth centuries.
Basically, my point is that if the disparity in music prices was a market economy issue, it would have been solved by wholesalers long ago. The issue has to do with RIAA content control that is taking advantage of economic differences among states to maximise their profits. The same contractual/legal issues, issues that are just as much a barrier for the internet (which is why iTunes has taken a while to expand to Europe); this has nothing to do with the internet (unless you want to talk about piracy, in which case you'd have an argument). To specifically answer your point, only after five hundred years of capitalism in Europe has a unified continental government emerged there, and certainly the consolidation of nation-states in Europe had a lot to do with the geographical reach and modes of trade, but DO NOT assume that the reach of trade implies that governance over the same area. Yes, American hegemony led to IMF/WTO trade rules, but in the post-Cold War world, anything can happen, and don't assume things won't swing the other way (in regards to increasing global market integration, or international compliance with American goals).
America could be heading for financial trouble, if the federal deficits and the state budget disasters do not get solved masterfully (and soon).. Grey Davis was the first casualty, but in the longer term it could mean the relative decline of our (U.S.) power and a reaction towards mercantilism. See Immanual Wallerstein's scholarship :)
I'm in the market for a digital camera. I've been looking at the Sony F828, but the retail price here in Australia is $2599. In the US, it's $999. Converted to $AUS, that's $1315. That's almost half price!!
Even factoring in postage and import duty, the price will only rise another $200. The price differential is really shocking. The only downside to ordering from the US direct, is the warranty isn't valid here. I'd have to ship it back to the US to get it fixed.
dave
Why not create an online currency and tie it to something like paypal? You pay 0.99 'nets (or whatever) for the song which is billed to your account...then you pay your account at the end of the month in your own currency.
I'm in the UK. You are a foreigner.
I stole this
There are a vast number of products that are sold at different prices in different markets. It used to be standard practice, in the days of minicomputers, for the price to eb 10,000 dollar i the US and 10,000 pounds in England. If I am not mistaken, prices for movie DVDs varies by country.
/. make it very obvious to consumers that this is going on. There doesn't seem to be a consistent pattern. Sometimes the pricing needs to reflect widely varying taxes and operating costs. Sometimes, a market is poorer and a company must change less in that country to sell at all.
What is new is that the Internet and sites like
If we are truly moving to a global market that removes protective tarrifs, then the Internet will level the pricing differentials except for the differences in taxes. And it will become really obvious to consumers how much their country's taxes ar raising their costs.
What would be really great would be if we could actually join the single currency rather then dithering about on the sidelines (as usual). The benefits that transparency in pricing would bring would see an end to "rip off Britain".
Effectively these services operate like radio stations, and pay over a certain amount, either per track downloaded, or a flat fee negotiated, to these organisations. The general consensus is that they are legal in their home countries (and for Weblisten, presumably in all of the EU). I believe that Weblisten has been sued by the Spanish RIAA-equivalent but has prevailed. Weblisten has been around for 6 years, and allofmp3.com for 2 years, so one would expect that they would be gone by now if they were not legit.
You can find a good third-party review here - he also received a confirmation email from the Russian copyright organisation confirming allofmp3.com's legitimacy.
I've been signed up to allofmp3.com for a while and had no problems with my credit card, although I've always used a 'one use' number. Customer support is quick and efficient; they've responded within minutes to my queries. There doesn't seem to be any recurring billing either, you just sign up for a fixed term.
They allow online encoding into MP3/AAC/WMA/OGG/MPC but this is taking quite a while at the moment (in the queue for several days rather than only minutes) - presumably due to this mention on Slashdot. Your order is transcoded from 384k mp3 files rather than the uncompressed originals. This hasn't bothered me, but audiophiles might take issue.