Digital Music Downloads Too Expensive?

threeofnine writes "The Sydney Morning Herald has an article written by a copyright and technology lawyer asking if we are paying too much for digital downloads. From the article: 'Parallel imports are unavailable in the Australian digital market, however. Australian consumers cannot purchase downloads from iTunes or Wal-Mart in the US, which are often cheaper than downloads available here, without a US-issued credit card. And restrictive licensing conditions imposed by copyright owners also limit the sale of digital downloads across international borders. For both reasons Australian consumers miss out. And retailers cannot buy downloads from overseas and resell them here, even if it is worthwhile for them to do so. In a recent analysis, the prices of Australian-made CDs of artists such as Bon Jovi, REM and Robbie Williams were compared to those of legal parallel imports. It was found that the local product was as much as 300 per cent more expensive.'"

Comments

both sides of their mouths.

[yagu]

Interesting key (and somewhat conflicting) points from the article:

This is not the fault of retailers. Prices for digital downloads are based on wholesale prices, and are determined on a territorial basis by record companies based on their perception of what each market can bear

and:

As a border-free environment, the internet was supposed to bring down market barriers. But record companies use the internet to create boundaries and increase protectionism in the market for sound recordings, to the detriment of consumers

So, in addition to lobbying in the United States to encumber music and entertainment beyond any previous restrictions (to the point of unusability if they get their way), the music industry tries to layer artificial geographical artifacts over the internet to further increase their (already obscene) profits. I find it interesting the entertainment wonks get away with this under the "protection of artists and intellectual property" canards juxtaposed next to the argument that many people lose their jobs to outsourcing as a result of the "global economy" and the breaking down of these alleged geographic boundaries.

Seems like those in power define by expedience.

(As an aside, another tasty tidbit in the article:

When will parallel-import laws be extended to the digital market, so that Australian consumers are finally charged a fair price for downloads?

I find this an interesting question -- maybe when Americans are also charged a fair price for music (they aren't today). Sigh.

Re:both sides of their mouths.

[TubeSteak]

Those two points aren't contradictory at all.

Both support the assertion that the recording industry is still artificially keeping prices up.

Maybe someone will start up a business to issue low value American credit cards to foreigners so they can buy from iTunes. Even if it makes digital downloads 200% more expensive, there's still a savings.

Re:both sides of their mouths.

[aristotle-dude]

I had hoped that you would have a better grasp of economics when I saw you quote the the first part but alas, it was not so. The wholesale prices and retail prices of goods and services are usually determined not only on what the market can bear but also on the cost of doing business in each country. Do you honestly think the companies have no brick and mortar operations in each country for logistical purposes? They need to have a head office in each market they are dealing in and people on the ground scouting for new talent. All of this costs money and the amount varies from market to market based on the cost of living and government imposed payroll taxes.

I have a few questions for you. How would they determine how much of the sales to provide for each sales region if there was only one store? Which region would be used to determine the price? How would you handle currency fluctuations? Why should some regions suffer with lower margins in times of currency market instability while others profit more? If prices fluctuated with the currency markets, should wages do the same?

I really don't think the slashdot community understands some of the basic tenents of local economics and how the internet plays into it. If you can a company without a presence in other countries, then you can ship anywhere and charge the same price+shipping to everyone but if you have a presence in each market, you have to be able to cover your margins in those regions with slightly differing prices. Also, if you are going to have universal pricing of physical goods, chances are that your customers will have to foot the bill for import duties.

In closing, I really don't blame the slashdotters themselves but rather the clueless media which have led people to believe things which are not true like that the internet will bring down all barriers to trade. Such notions are naive and simplistic because they cannot apply to every business model out there. The only way you could have a single market is if you had a single currency and a single set of labour practices/taxes.

No connection

[suv4x4]

Did anyone notice the article summary has no connection with the title whatsoever...?

Prices never go down, only up

[$RANDOMLUSER]

Why do CDs cost as much as vinyl LP albums did? The production costs for (digital) CDs are several of orders of magnitude less than they were for (analog) LPs, yet the price-point never moved.

Re: Stop the RIAA

[goldspider]

To The United States Congress: We are the Recording Industry Association of America (RIAA). We love selling music and will gladly sell it for a fair price, but we are outraged by filesharers' tactics in acquiring our product without paying for it...

Spin works both ways.