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Software Price Gap Between the US and Europe
Kensai7 writes "A quick comparison between same versions of mainstream software sold in the USA and the EU markets show a big difference in the respective price tags. If you want to buy online, let's say, Adobe's Dreamweaver CS3, you'll have to pay $399 if you live in the States, but a whopping E570 (almost $900 in current exchange rates!) if you happen to buy it in Germany. Same story for Microsoft's newest products: Expression Web 2 in America costs only $299 new, but try that in Italy and they will probably ask you no less than E366 ($576!). How can such an abyssal difference be explained? I understand there are some added costs for the localized translated versions, but I also thought the Euro was supposed to be outbuying the dollar. Where's the catch?"
There's no complicated reason, companies charge more for products in europe because they can.
A bullet may have your name on it but splash damage is addressed "To whom it may concern."
Probably won't make up for all of the difference, but I expect that the US prices don't include sales taxes etc...
Thou wilt be charged what thou art willing to pay for it.
Quite simply Adobe, Microsoft and probably others have determined that Europe will pay that kind of money for their software where the United States won't pay that much, and have computed the optimal price point right there. Sad but true Europe.
Having said that, time to start an import/export business with cheap software in the United States going to Europe :-)
...in bed
The cost of localizing everything is not inconsequential. You can't just run it through a translator and go and you still have to do acceptance testing on the localized version. The number of German or Itallian consumers is small compared to those who use English and the price reflects the marginal production costs per unit.
The reason is that the companies create artificial monopolies by creating sole distributorships in each country. On top of that, name/brand recognition goes a long way in semi-First World countries like those in Europe, so something like DreamWeaver is going to gather a lot more interest than XMLSpy (or what have you). So you have a market focused on one product, and only one supplier of that product. The math is pretty simple; consumers lose out to asymmetric market forces.
It's not just "because they can", but it's actually the market that has created those conditions. If Europeans would wake up to the alternatives (like China and India have), software prices would be much more reasonable.
Taxes are still not 130% on top of the RRP ;)
And that doesn't account for even half of the price gap. Guess again.
you realise all the stuff on there is only made because they rely on honest people buying copies right?
You might think its cool to just leech off of honest people, but some of us would have a real problem with that.
or did you think pixies from outer space made all the software?
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Since sales tax in Germany is 19%, that explains quite a bit of difference already.
Dreamweaver US = $399
German Sales Tax 19% = $76
Total Difference = $501
Please explain the other 85% of the price difference. Also, don't call 15% of the difference "quite a bit of difference".
In the last 5 to 10 years the conversion has usually gone something like:
$1 = £1 = 1 Euro
Nice and simple just the way they like it.
Well, Bart, your uncle Arthur used to have a saying: "Shoot 'em all and let God sort 'em out."
The governments of Europe hassle companies (in general) more than the US does. This hassle has a cost. The cost is reflected in the price.
Let me put it another way: Adobe considers it worth their while to sell Dreamweaver at $400 in the US. After all the hassle, they consider it worth their while to sell Dreamweaver for $900 in Europe. At $400, would it be worth their while to sell Dreamweaver in the EU at all? Maybe not.
Let me put it a third way: go on eBay and you find that a lot of US sellers won't ship outside of the US and Canada. Why not? Because it isn't worth the hassle. Would it be worth the hassle if the seller could check a box which said, "double price outside North America?" Maybe so.
Moderating "-1, Disagree" is simple censorship. Have the guts to post your opinion.
Don't get your knickers in a bunch just yet over the price difference. What we have here amounts to a single data point in time.
Perhaps a better question to ask first is "How has the price of software in Euros changed over the last couple of years?"
Why ask this? You are converting prices back to US dollars. The value of the US dollar as compared to Euros has been declining for the last couple of years.
IF the price has been relatively steady (I don't know if this is the case), and people are comfortable paying this price, there is less incentive for US companies to lower the price of their software in Europe. If the Euros are converted into US dollars, they would be keeping more $$$. It's their software, they can charge what they choose.
This only addresses part of your question. Since one US dollar has been worth less than one Euro (at least for the last five years), the price at any point in that period (assuming a relatively constant Euro price of software), would still be higher.
There is probably some holes in my reasoning, but I am sure smarter souls will be more than happy to correct me.
The localisation costs are complete bullshit...
Software is cheaper in canada, where it has to support english and french, compared to england where it only needs to support english. American software that only supports english would also sell just fine as-is in england.
And then there's smaller countries who are forced to use the english version anyway, because software companies don't consider them important enough to get a translation, yet they often still end up paying higher prices.
Still, it's yet another reason to use open source, same price everywhere and no vendors screwing you over because they feel like it.
Incidentally, unfair pricing (ie not based on real quantifiable factors) amounts to racism, and something should be done about it... In order to charge more in one country over another, it should be mandatory to document why (ie import taxes etc), and in the case of multiple localised versions make the original available too at a lower cost. Charging someone more just because they happen to live in europe should be considered racial discrimination and punished appropriately.
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In Malaysia - it costed me 300 RM - or - 100 USD. Funny ? explaination below
[ ] Market Dynamics Blah Blah
[ ] Supply Demand & Blah Blah
[ ] Blah Blah Capitalism
[x] You price your product based on what people can pay. Rest, is Bullshit.
Prices in Canada are higher because of higher taxes. Canadians and Americans have very similar expectations for pricing. The difference in price can be attributed to small incremental taxes. At every level of production, cross border shipping, transportation and retail there are higher taxes. This is passed onto consumers. If Canadians want to pay the exact same prices for goods as Americans then they should be prepared to do away with many of the social programs they have become used to.
What's that dad? you lost your job working as a blacksmith? Why is that? People don't ride around on horses so much anymore?
Software is destined to fall to zero cost eventually, simply because it can. So you can either accept that and find a more long term proposition (ie work for a company that makes software as an aside to their core business, ie a hardware or support vendor) or you become obsolete.
Selling software isn't sustainable, there is no scarcity once software has been written, distribution can be infinite with no cost and code can easily be reused. People will move to the cheaper, more flexible and more open option long term, just like they did with x86 compatible hardware. People are also very much averse for paying when they don't have to, and it's only a matter of time before people realise that software doesn't need to be paid for.
The world changes, deal with it.
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then don't buy it. if the price is too high, then they have priced it out of your range. deal with it.
Movie theatres set different prices during the day. Loyal customers get given discount coupons by many companies. Some places let the unemployed, or retired, or disabled people in cheaper or even free. Some bars let women drink for free, some events let people in free in fancy dress, some places give discounts to members of the armed forces.
NOT EVERYONE GETS OFFERED THE SAME PRICE.
There is no major news here. Sorry if that deflates the slashdot readers attempts to justify theft though, as 99% of stories on here attempt to do.
DRM-free indie games for the PC and Mac: Positech Games
Your argument is laughable. I get the feeling you don't understand what racism actually is, since this clearly isn't it. Something is worth what people are willing to pay for it, so that is what companies charge. With your plan, it wouldn't be possible for companies to subsidize their product in developing countries. Do you hate people that live in countries less affluent then your own?
You don't make the poor richer by making the rich poorer. - Winston Churchill
Of course finlands probably the only country in the world where all the mcdonalds employees speak english
So what do they speak in the US, UK and Australia?
Back in the 90s on Usenet I used to tabulate and compare prices between MacWarehouse's UK and US catalogs. I'd subtract the VAT to ensure the comparison was fair. The result showed markups of 50-100% on a regular basis.
In most cases, any localization done was incomplete. For example, ClarisWorks still referred to "color".
As I recall, the #1 winner was Dave Winer's Userland Software. Their Frontier product had something like a 200% markup in the UK, and zero localization performed.
I actually contacted some of the winners about their UK pricing. One company told me that the markup was because a small number of distributors controlled the UK software market, and those distributors were the ones setting the prices.
It's worth noting one of the side effects of this practice: my experience in the 90s was that everyone ran the US version of Mac OS and ordered their software from the US in order to save money. This indirectly killed the market for Mac software in the UK.
Also, the BSA used to estimate software piracy by comparing the number of people running (say) Microsoft Word with the number of UK sales of Microsoft Word. So the gray market meant that US piracy stats were depressed, and UK piracy stats were artificially inflated.
(I was going to link to some of my 1992 Usenet posts, but Google Groups doesn't seem to have them.)
GCHQ Quantum Insert installed. If only our tongues were made of glass, how much more careful we would be when we speak
Microsoft make money because the market has not matured enough yet... They also snuck in through the back door as the hardware market was maturing - people went for the cheaper more open hardware, and overlooked the impending software lock-in because it was a relatively small cost compared to the benefits of cheap open hardware from multiple vendors.
As for your comment about little financial motive...
There are many ways to make money that don't involve directly selling software. IBM and RedHat make a lot from support, Many companies make a lot of money from hardware, while investing in making free software (including free as in beer like drivers).
And your claim that very little software being created without someone hoping to make money from selling it, just look at how much free software is available, there is a truly insane amount of software available for free these days.
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the disparities have fueled a growth in open source software and their alternatives. And, as a result, some very good alternatives have come out of Europe. Enough that some companies like MS have set up lobbying efforts there to try to stop governments and businesses from adopting the alternatives (why would they cut the price, it's not their "way").
One has to remind oneself that the image the US gives itself internationally mainly comes from the people on the "lower" end of the intelligence or/and educational-scale from time to time.
Actually, I have never actually meet anyone idiotic from the US. In my experience, most you meet are nice, intelligent and well informed people, so I assume that the idiots simply are a very vocal minority.
One have a tendency to remember the bad experiences better than the good ones, though. =(
/.Mattsson - My native language is not English, so please don't whine over linguistic errors. (That's lame anyway...)
That's because nobody who needs Office Profession buys retail copies. The Home Version of Office costs R$ 200, which is US$ 130. Very cheap, if you consider that most brazillians spend from R$ 1200 to R$ 2000 on their computers.
Companies buy Office at bulk prices, which range from R$ 700 to R$ 200. Considering that the employee using the software costs (for an underpaid person) at least R$ 36000, it's a very small price to get work done.
Actually, these price diferences are true not only to software but hardware as well. And the value has nothing to do with the versions being localized.
In fact, the price difference applies across the board. Pretty much everything in American is just dirt cheap.
(Which is why, when we're passing through the US lat this year, we'll be arriving with two empty suitcases each and leaving with them stuffed full of clothes, electronics, and the like. The money saved over buying in Europe or Australia will pay for a non-trivial portion of the trip.)
That's just as much BS as their old excuse for shipping things to Europe despite being closer to China where all the electronics are actually made and Microsoft makes their EU discs in Ireland so the cost is minimal for shipping.
As far as translation...for starters they never actually give you software that uses British English so we see no benefit in it and do you think they get "file", "save", "copy, etc translated for each version? A previous employer of mine only paid approx. £110,000 to get a whole book translated into about 26 languages. It was a small company so they certainly didn't get a good rate. Now if Microsoft or Adobe somehow pays double that, that means they only have to add £1 per disc if they sell 220,000 copies which they will. There is no excuse for something that should cost us £150 to cost £300 (or more).
The only reason they do it is to boost their profits because European currencies are worth more than the dollar. So they abuse their positions to sell over priced software to help their bottom lines. That's the only reason.
This is also yet another reason why I use products like Open Office and Gimp. Honest companies, like JCreator, will get my money too seeing how they don't try to rip me off for not living in the US.
A first world country tends to have a service and information oriented economy. Manufacturing is so last world war.
I'm really fed up of the VAT argument. Yes, it's higher, but with other taxes and costs is levels out anyway. Plus, 10-12% more tax does not mean you get to charge 100% more for your product.
It's out own fault for tolerating it. I don't know about the rest of Europe, but they call Britain "Treasure Island". There has been a blacklash in recent years, but not a very effective one, and in the process we seem to have forgotten the value of quality.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
I think you're right - and wrong.
I'm a British (well English) person so I count as well Europeansish I guess. Well I can talk the same language(ish) as Americans - but politically more aligned with 'Europe'... I guess.. Well actually my political compass seems to point to 'left-wing' libertarian - so left-wing swing to Europe, but US libertarian seems to be right wing... and and and....
I think the take-away point is that everybody is unique and tends to get painted by others by the country they belong to. US stomps across the planet gunning for resources with an illiterate army equipped with the finest munitions on the planet etc etc. I conversely appear to have forgotten my bowler hat and am curiously happy about the loss of 'The Empire'
Anyhoo - we're all just people and all different and most of us are quite struck by the blindness of others (Evangelicals spout pretty much verbatim that of Al-Quaeda, with just the odd noun transposed).
All boils down to the basic human instict that "I'm right" - and where would we be if we were all in a perpetual state of flux and indecision?
To take for example a 'secularism' - We're not going to have god in our legal system... instead that's replaced by people pledging allegiance to a flag? Nobody notices anything strange here???
*waves hands*
I've travelled the world. Americas, Europe, Asia, Middle East for work - everybody I've met has been lovely. Whole planet is filled with the same people and as a rule of thumb we're 'lovely'.
Sure any travellers here have had the same experience.
Oh I'm rambling on, losing my point, and this is going to be buried in the middle of an un-read thread - but... Oh - back to the original point. Yes - we're shafted on prices in Europe. But somebody has sat down and worked out these prices as what people 'are willing to afford'. If you don't like them, don't buy them *shrugs* it's a free market.
Still arsey over the price of my Rock Band instruments - but hey - it's only money.