Ripoff Britain, DRM & Overpriced Music

Despite 11 years of living in Britain, I still can never get used to the ripoff prices the Brits are charged -- and tolerate -- for so many products. Indeed, within the country, the phrase "Ripoff Britain" is even commonly used to acknowledge the situation, but it's still tolerated. This week's news of first the DRM-free music from EMI and then the possible action against Apple over pricing just underscores the absurdity.

Let me explain more. It's not uncommon for things sold in the UK to cost in pounds what they would cost in dollars in the US. That Xbox game? As I've written, it might be £40 here versus $40 in the US. That means it costs about $80. Same game. Same packaging. Just more money.

Sometimes, manufacturers put this down to transport costs. Oh, energy is so much more expensive in the UK, so we have to pass along the cost. But then again, I used to own a Honda CRV. It was built here in the UK, in the same plant where I understand CRVs were also built and shipping to the US. Yet despite building it here -- and shipping it to the US -- the US CRVs were still almost have the price as the UK ones.

Now onto Apple. Ages ago, I ripped all of our CDs and put them in MP3 format. I'd put them on first my Rio Karma, then when it died, either my iPod or my Shuffle, primarily to have some tunes while skiing. Recently, my wife decided she wanted to have a music player to take to the gym -- plus she wanted to buy certain songs online. So I purchased a Nano for her, saying it made more sense than handing over my iPod. This way, she could manage her own music and do whatever she wanted with it.

I've since become a genius since buying the Nano. Apparently, it's a great. Plus, she's buying music from Apple directly, which she loves. New music, song by song, whenever she wants.

I tried to quash the entire music buying thing. First, I argued she should just get CDs, since we could rip those and not be locked into Apple's whateveritis DRM. Second, I just angered me that Apple charged so much, £0.79 per song (about $1.50) versus $0.99. It's digital music. There's no shipping. What's with the 50 percent markup?

Now, I got around this by opening up an Apple store account in the US. I have a US-based credit card, a US PO Box, so I got it going pretty easily. So here we are in the UK, downloading music at the "regular" prices. It makes me happy. Download away, I told her!

Now the DRM-free prices have come out. From the EMI release, that will be £0.99 (about $1.88) in the UK versus $1.29 in the US. I suppose I can be happy that the UK price is slightly less a percentage rise for non-DRM than the US is being charged. But it's still much more.

So now the EU is looking at Apple's prices. Good. I don't expect it will change anything, but you can always hope.

I believe I remember reading an article, probably around '92, that it was actually cheaper to buy a car in Belgium and have it shipped to the UK than it was to buy the same car in the UK...

If you think about it though, the government has to heavily tax things like cars and petrol, it's not like they have any natural resources that they can fall back on like north sea gas... oh... ;)

Comment by Simon Heseltine | April 4, 2007 1:14 PM

Don't want to be a whining bastard, but I will be anyway:

"the US CRVs were still almost have the price as the UK ones." come on Danny :P I suppose you mean half? :)

Comment by Joost de Valk | April 4, 2007 8:13 PM

Car and petrol taxes don't affect digital delivery of music. VAT at 17.5%, and the costs of administering VAT (probably another percent or so of the sales price)... Nope, that's not an argument. Staffing costs? What Apple staff are needed in the UK for music delivery? Some lawyers... Hosting service... Nope. Nothing here to justify a huge markup.

It's probably just the application of the marketing mantra "all the market will bear". The elasticity is large - drop the price and I expect that the rate of downloading won't increase to maintain the same revenue. So, for Apple, the question is how much can they charge before the total profit declines? Brits will accept a higher degree of purchase pain than Americans, for no real reason other than that we don't complain to merchants.

Personally, I no longer buy music, except directly from the musicians. FairTrade, but for musicians. :) The music industry claims that the reason for high music costs are that they support so many crap or specialist bands, against the few high winners - but I suspect that's just a symptom of a failure to fully engage with the small and diverse communities that the internet offers, instead of the mass markets that used to be accessible by radio and music papers.

Comment by Jeremy Chatfield | April 19, 2007 8:52 AM

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