Ask Slashdot: Should Commercial Software Prices Be Pegged To a Country's GDP?

Here's a bright idea from dryriver Why don't software makers look at the average income level in a given country -- per capita GDP for example -- and adjust their software prices in these countries accordingly? Most software makers in the U.S. and EU currently insist on charging the full U.S. or EU price in much poorer countries. "Rampant piracy" and "low sales" is often the result in these countries. Why not change this by charging lower software prices in less wealthy countries?
This presupposes the continuing existence of closed-source software businesses -- but is there a way to make that pricing more fair? Leave your best suggestions in the comments. should commercial software prices be pegged to a country's GDP?

Comments

Subject

[Anonymous Coward]

Because of the simple fact that doing this will move the problem. Instead of having piracy in those "poor" countries, you will now have resellers taking advantage of the low price and making a profit in the "rich" country.

Re:Subject

[arth1]

You touch upon the problem why it won't work. It requires rigid regional DRM. And that's not a good long term solution.
There's no doubt in my mind that piracy has increased due to regional DRM, both for DVDs and entertainment software. If you can't get what you want legally while others can, that leads to uprising and war. Even if the war is just one person downloading pirated stuff.

Re:Subject

[Austerity Empowers]

Even beyond rigid DRM, there are two other reasons:

1) you create a situation where high GDP countries have much higher costs to operate (piracy in these places is harder and more likely to result in arrest), and as a result businesses sometimes become impossible to start due to investment factor. It makes us less able to adapt and try new things. This further sets the stage to enable us to continue to exploit labor price differences and exploit workers on both sides of the political border.

2) The vendor needs to recoup his costs (even if we ignore profit, which their investors never do), and we assume the price given to you is at least somewhat based upon development costs, then the low GDP countries aren't paying their way. They're relying on high GDP countries to fund this software so that low GDP countries can leech. I'm not sure anyone wants that particular kind of charity, we prefer it to be out in the open (and tax deductible)

DRM is just the mechanism hollywood came up to enable them to do exactly this.

Already like that

[rmdingler]

The reason folks from the US shop in Mexico for prescription drugs and animal vaccines is because this phenomenon already exists.

Microsoft does

[Anonymous Coward]

Windows pricing is very different in China, for example (rampant piracy).

Because people can travel?

[CastrTroy]

What's to stop people from going to Venezuela and buying 10 copies of Final Cut Pro and bringing it back to the US? Unless you are suggesting that they start region locking software, controlling which country you can use software in depending on where you bought it.

Pricing of goods

[Anonymous Coward]

What is wrong with you? Those who produce can ask what they like for what they produce. If it isn't worth it people won't buy. Whether it is worth it or not, there will always be those that will steal what is produced. 'Fair' is where you go to sell your pig, not the means by which you set the price.

They optimize it clearly

[140Mandak262Jamuna]

If you allow lower prices for India and China, what's to stop companies from buying the software in those countries and use it in USA? These companies use all the tax loopholes to move their profits to overseas subsidiaries. They know their customers will create subsidiaries in India and turn around and buy services from the subsidiary and use it in USA. The snakes know the legs of snakes, as the old Tamil proverb goes.

A problem without a good solution.

[Zitchas]

There isn't really a good solution to this.

If everyone has the same price, then people in poor countries are likely to pirate.

If prices are adjusted so that it is expensive in rich countries and cheap in poor countries, then everyone is going to buy copies in the poor country, one way or another (either via resellers, establishing subsidiaries there, etc)

And if one region locks the software, then that makes people unhappy because they bought the product and want to be able to use it world wide. And it is hard to geolock computers, anyway.

I think just one price and have it constant everywhere is the best option. At least then you don't end up with situations like having everything super expensive in Australia just because.

If they dropped the prices in one poor country, everyone else will complain about "if you can afford to sell if for X in country Y, you must be ripping us off selling it for Z here."

Probably the best strategy is just to have one constant price, let the people in the poor countries pirate, and establish some kind of "pirate redemption" system targeting those areas to get people to spend some small amount to "upgrade" to a legit version. Then set that amount to the reduced amount one would have charged in the poor country in the first place.

Re:Gouge the middle class to make them poor

[Ungrounded Lightning]

It sounds more fair when you say charge less in poorer countries. However when you turn it around, it is gouge the people in less poor countries.

Especially given that GDP is not evenly distributed among the population. The bulk of the added revenue from technology driven productivity improvements (at least in the US) has gone to the denizens of the C suites and the government, not to the workers. GDP has soared while real-inflation adjusted after-tax income has stagnated or dropped for decades.

That's much of why a nuclear family in the '50s got along fine on a single income and a two-parent family now involves both parents working and the kids in child care, and the bulk of kids are in "non-traditional" family arrangements and/or on some form of public assistance.

So "gouge the developed world's middle class" is indeed what such a GDP-based scheme would accomplish.

Bad Idea

[blindseer]

If this is a government imposed price control then not only is this a bad idea but one that has lead to the destruction of entire nations and killed many. Price controls enforced by the government do not allow the market to adjust pricing to meet supply and demand. Without proper market pricing we get hoarding, black markets, etc. Price controls is socialism. In socialism people wait in lines for bread, in capitalism bread is lined up waiting for people.

If a company chooses to control prices based on local markets then expect much of the same. If software is cheap in some nation where people don't make much money then expect a black market to pop up to buy low locally and then sell high somewhere else. Software makers can try to enforce this GDP based pricing with location enforcement of some kind but that's not too difficult to fake for the properly motivated.

Didn't textbook publishers already try this? They'd sell textbooks in other English speaking nations for cheaper than in the USA in order to compete better and/or comply with socialistic price controls on books. They tried putting different covers on those books but that didn't stop people in the USA from buying them, the content was still the same. Efforts to make the content different enough to matter costs money, negating any profit motive in selling the same books at different prices.

I cannot fault people for wanting to make a profit on their products. What they seem to fail to understand is that the world has gotten a lot smaller. I've gone to online retailers and orders products from Taiwan and Australia before. They arrived in my mailbox a week later. If I ordered from a domestic seller I'd sometimes get it overnight, and that has some value to me. If the price difference is large enough I'll wait that week if I can.

When talking about bread, textbooks, and so on this is a physical product. Software is not a physical product, the media might be but when is the last time you saw actual media in a software box? When was the last time you actually bought a "box" of software?

Just a bad idea. If actually implemented anywhere I'd expect it to die quickly.