iTunes pricing model unfair to UK customers.

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loGan

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I hate to moan about an Apple intiative and especially something which Apple themselves have probably little say in but the simple truth is that the pricing on iTunes is simply a rip off to UK customers, as usual.

What is the point in the internet and digital music , a world without physical barrier and yet UK customers are forced to pay 79p which works out at about ?1.2 or $1.45 or in the case of an LP ?7.99 which equates to ?12.20 or $14.67.

Based on US prices LPs should be ?5.50 or thereabouts and single songs 55p.

Euro prices are more closely matched to the US though still slightly elevated.

Of course FX rates are the cause of this and ? is reasonably strong at the moment and the ? and $ have been flying around all over the place. My problem is not so much that at this point in time we in the UK are being overcharged but simply we do not have the choice to choose a different marketplace because of the arbitrage.

Why can't I simply log onto the US site and buy my music there if I so choose or the exchange in in my favour, or decide to go shopping on the French site if that is what I want to do?

Either way the artist receives his royalties, either way Apple gets their small cut but the consumer is not ripped off. I'm sure this is down as usual to the record companies and their greed but perhaps there is more to it that can be explained here.
 

richard_in_oz

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From my understanding on how things work here in the UK, and from what I?ve heard from the launch of iTunes in Europe (UK, France and Germany), the UK is the only country that requires the advertised price to include TAX.
I know this doesn?t account for all the extra money we are expected to spend, but it does level the playing field a little.
 

yoyodubois

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dude nonononononono, don't know where you're getting your info about FX rates, but whilst they have been going up as the Bank of England has been increasing interest rates, the pound can hardly be said to be hugely strong at the moment. Unless, of course, you want to believe what you read in the press without looking at the numbers - Cable (or ?/$) is above 1.8 and recently toyed with 2.0 !!! Wow, awesome if you want to buy import something in the States that doesn't have punitive duties imposed on it.
No, there is no nice reason why The Stone Roses eponymous album costs ?10 in the UK and $10 in the States (a staggering 50% more in Blighty!!). Generally, the reasons firms give for such mindblowing price differences is that fixed costs here are higher - rent, tax, insurance, wages, blahblah, are still less competitive here than in the USA even if they put Europe 'to shame'. But it's all utter balls, really, as we're all aware and iTunesMS is a fine exemple of this double talk. Other than advertising costs and the tax on music sold to the public, I can't think of many reasons why songs sold via iTMS in the UK should be higher than in the US. Overheads ... well, they can outsource the running of the store to Bombay and, for all I know, maybe that's what they do, we all know how hugely competent Indian software engineers are and they're certainly a lot cheaper. They charge the UK more because they can; and since they know that the general reaction to this in the UK is just to bend over, take it and pay the money, they just laugh and do it. Not for nothing have carmakers nicknamed the UK 'Eldorado'. Sell something successfully here and you'll be minting it, laughing all the way to the bank.
No, best to boycott iTMS - buy your CDs from an online store where they'll be the same price or cheaper than iTMS and you won't need to worry about back-ups, computer crashes, etc., and you'll have the added bonus of something concrete to show for your hard-earned cash. Right now, other than ease of use, I can't see much going for iTMS - it's not hugely competitive for something that sells streamed music as opposed to a physical CD; and its library is seriously limited. And I'm not just talking classical music here, even mainline pop/rock is badly represented as I'm sure we're all finding out.
I don't think iTMS is alone in this and they and their competitors may soon start to make huge moves in the right direction, but for the moment, I'm going to stick with play.com and their ilk.
 

Starboard

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it's the same pricing model that exist in the other three store. They offer competitive pricing in comparison to CDs in their respective markets.

You want to compare the prices of the four stores, but they are four different markets. I don't see people whining that CD are more expensive in the UK. CD are pressed there in the UK, so there's no shipping costs. Why should there be any difference? Wages are different in the UK. why? Selling a pair of jean at a department store in the UK is about the amount of as selling a pair of jeans in France, so there should exist the same wage rate. Supply and demand is different in different markets. Even though we're moving toward a global economy, local economics still affects price more than anything.

But the law of supply and demand still holds. If you don't think its worth your money, don't buy it. If enough people do that, it'll drive down price.

As for buying music from other iTMS stores, the restriction has more to do with the record companies, the artists, and the complex deals they've made with distributors. One artist might have four different deals with different distributors in the four countries. If you create just one store, which one of the distributors get paid and how much? Can they all come together and agree on one deal? And if iTMS allows you to buy from the best priced store, then distributors of the other locals loose out. Will they be willing to deal with iTMS again? Redrawing the deals would mean that some artists would loose out while other would gain. The record companies would also loose in some deals and gains in others. The ones that loose out would not agree to a deal of course. Then you can't get everyone on board. You're asking for the entire music industry to shift its business model. The system would become too unstable. It's too complex for Apple to deal with as they are a new comer to the music industry.

What we have is not ideal, but its the best that can be expected for now. Hopefully, when iTMS is more established, they'll have more muscles to demand better deals and begin to push the music industry toward a more level playing field.
 
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loGan

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ude nonononononono, don't know where you're getting your info about FX rates, but whilst they have been going up as the Bank of England has been increasing interest rates, the pound can hardly be said to be hugely strong at the moment. Unless, of course, you want to believe what you read in the press without looking at the numbers
Err I get the FX numbers from the trading screen in front of me and I disagree. The pound is still historically very strong vs the dollar though it could perhaps be better presented as the $ being incredably week against the ?. Given that the range for the previous 5 years was about 1.4-1.6 the current level of 1.82 or thereabouts. Stirling will no doubt continue to drop off as rates eventually rise in the US and the price discrepancy will not be so obvious.

Anyway I digress. The point I was trying to make is that we now have an electronic marketplace in a commodity with no barriers to delivery. There should be no discrepancy at all.

Of course I am aware that this is very unlikely to happen but if we don't have a good moan about in the UK then we will continue to be ripped off. The internet is opening up the trading world for consumers who are able to source a product from elsewhere if they find it cheaper and if enough people do this then domestic retailers will be forced to be more competitive.

Does anyone know what shape the Euro iTunes model will take? I assume that the UK will be excluded or as members of the EU will we be able to shop freely and pay in Euros?
 

dal82

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I'm no expert on this kind of thing, but isn't there a freedom of trade law whereby we in the UK should be allowed to buy products and services from the EU (like a lot of people buy cars in Europe and then export them back over here)? Would this also apply to iTunes?
 

wco81

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A few factors I believe:

1. UK and Europe stores include VAT, don't they? Isn't VAT like around 20%?
2. As someone else mentioned, there are different royalty arrangements in each country, for the same music often. This is all a remnant of arrangements made decades ago. But you see different pricing for DVDs too. We Yanks pay less for our DVDs (which have region coding -- easy to circumvent but it shows you the mentality of the content owners to get as much as they can get in each country).

Anyways, I hear London is the most expensive place to live in, more than NYC, more than Tokyo, more than Zurich.

Move if you want cheaper music. ;)
 

PJsTelecaster

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wco81 said:
Move if you want cheaper music. ;)
The premium we pay on purchases in the U.K. would represent good value even at ten times the current rate... it is money well spent for the pleasure of not living in the U.S ;)
 

loGan

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It is very expensive here but we do get paid accordingly. London is becoming almost a nation state in its own right. It is simply galling to constantly look at US prices and see ourselves getting ripped off.

The new apple cinema screens are a very good example. ?1000 for the 20" or $1200 in the states. Apply the maths and see how in the US the screen costs ?660 pounds? That is about a 40% difference, now I don't understand how your state tax is applied to that but I am willing to be that it isn't 40%?

Prices are generally advertised as VAT included here because to the average punter there is no way to avoid it.
 

Yellowhornet

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I have already emailed Apple regarding this matter - I sent the following email

Web Order # : Support Subject : Purchasing Info
Sub Issue : Payment Questions
Comments : Why is the UK version so much more expensive than either paying
in euros (at present exchange rate it works out to 65p per track) or the US
site (this works out at the present exchange rate to be about 55p per track)
- why do the UK customers have to pay more than anyone else ?


This was the first reply (which didnt answer the question)


Dear Tom,
Thank you for contacting the iTunes Music Store.
Thank you for your email with feedback for improving our business practices
and products. The iTunes Music Store Team recognizes that our best advice
comes from our customers and we appreciate the efforts you have made to
share your opinion with us.
All the while many tracks are available in both iTunes Music Store, the
actual content may vary, and some titles may be available in one and not the
other. We apologize for any inconvenience this may cause and appreciate your
feedback.
Please note that, in accordance with the contracts between Apple, the
artists, and the record companies, the iTunes Music Store UK sells only to
customers who reside in the United Kingdom and use supported payment cards
issued by banks in that country.
The catalog of songs grows every week. Visit often to preview the latest:
<http://www.apple.com/uk/itunes>

Sincerely,
The iTunes Music Store Team


So I asked them to reply and answer the question and they sent this reply.


Dear Tom,
Thank you for contacting the iTunes Music Store and for your patience in this matter.
We appreciate your feedback. As stated in our previous correspondence, the iTunes Music Store Team recognizes that our best advice comes from our customers and we appreciate the efforts you have made to share your opinion with us.
The selection and price of music varies from country to country because of the arrangements of the record labels vary from one country to the other. Again, we apologize for any inconvenience this may cause.
The catalog of songs grows every week. Visit often to preview the latest:
<http://www.apple.com/uk/itunes>

Sincerely,
The iTunes Music Store Team


All fairly stock answers .
 

Commodus

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Look at this way: Apple is a bargain compared to at least some (if not most) UK music alternatives. Napster's best price is 88p per song - and you only get that if you're already paying the 10 pounds per month for the subscription!
 

Starboard

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comparing prices of one product across regions is simplicitic and will only make you unhappy. I could also get upset that music CDs in Thailand cost approximately $3. That doesn't give me a full picture.

You have to consider the entire economy of the UK. All things affect the price of one another, as they all compete for your disposable income. iTMS pricing has more to do with the music market in the UK than it does with iTMS in the US.

Stop driving yourself crazy. The only way to make them stop "screwing you over" is to not buy from them. If the price to not worth you money, then take your money somewhere else.
 
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