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?"

Comments

Because they can

[Shadow of Eternity]

There's no complicated reason, companies charge more for products in europe because they can.

Re:Because they can

[houghi]

You could almost say that in Europe people purchase new technology for the sake of technology, while in the US people view technology as mere work tools.

So you are saying that the newn things you implement are useless?
One could also say that Europe sees the advantage earlier while Americans stick with what they have for better or for worse.

Re:You answered your own question

[Kiffer]

I see... so why does it still cost stupid prices in Ireland and the UK where little or no localisation needs to be carried out?

Real question: Why can they?

[BadAnalogyGuy]

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.

Re:Real question: Why can they?

[MagdJTK]

Semi-first world countries? Just goes to show how out of touch Americans really are with the rest of the world.

Re:Real question: Why can they?

[roguetrick]

I would argue that "semi-First World country" is a monumentally stupid phrase, so add our failed education system to that list.

Re:Real question: Why can they?

[Khazunga]

Europe really is a decade or two behind the US economically.

Europe is economically much different from the US. It's not behind the US in any way. Per-capita GDP in the US is in the low 40kUSD range. Per-capita GDP in the EU was above 40k dollars before the ten-country admission in 2004 that included lots of former soviet states. It is now lower, (35k if I recall correctly) but will naturally correct as the EU absorbs the former soviet republics (which had staggering low productivity).

Europe is different. More bureaucratic, with softer growth surges and almost no recessions on record. I don't know if it is better, but it's definitely not a worse economic environment.

It's mainly because they blew all their infrastructure up in WWII[snip]

The Marshall plan took care of this in two decades time. Great effort by the US btw, and definitely the kind of diplomacy a modern capitalist society should use and abuse (instead of classic brute-force-diplomacy)

, but also because of anti-competitive protectionist legislation.

The EU abolished most protectionist legislation between countries in the EU. Intercontinental protectionism is on par with the US.

"Semi-First World" may be an overstatement, but there is some truth to it.

The only revealed truth is that the author couples a sense of superiority with major ignorance about the rest of the planet.

Re:Real question: Why can they?

[SlashJoel]

Some American famously said "I may not like what you say, but I'll fight to the death for your right to say it"--a principle that many Americans hold dear.

I wonder how all those Americans will feel when they learn that the famous American who said that was Voltaire, a Frenchman...

Re:sheesh

[cliffski]

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?

Hassle factor

[Spazmania]

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.

Single data point

[iaamoac]

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.