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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.
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.
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!
Well you can download a tank of gas? You see all of these other examples work becouse the shipping costs out way any possible advantage of pricing. That is to say even if you save 3dollars a gallon buying in the US, shipping just one tank of gas cost you more then if you just pay the overcharge in europe. Also most of the overcharge is due to taxes, so if you import the customs agent is going to ask for his tax money. Now the net doesnt really have customes agent. So people in .UK could just buy albums in The US site and download the content directly paying the US price. Cost of distribution is nill on the net, while in meat space it keeps you in line. Similarly we in the US should just use the .CA music as its cheaper then ours. I think the true solution is a single global monetary system. All of these exchange rates just play on old world devliery systems, in a information age they are a relic. To combat this system lets just setup a company in what ever country has the cheapest music, use it to proxy all purchases no matter where the end user lives, thus everyone gets the same lowest price. Sooner (rather then later) the content providers and merchants will figure out they need a single price for everyone in this single information system.
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.
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!
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.
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.
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."
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 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..."
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.