Ever since Apple iTunes Music Store and Napster 2.0 launched in the UK, we at Digital Lifestyles have been thinking that the UK pricing has been unreasonably high, being out of step both with the US and Europe. The UK Consumers’ Association (CA) has today mounted a campaign to increase the public understanding of the problem.
The CA has written to the UK Office of Fair Trading (OFT) explaining the situation and highlighting that the current position is possibly in breach of European law. Under Euro law all consumers in all member states should enjoy the same benefits that the single market brings – it’s like if citizens in Seattle had to pay more for their iTunes music than the rest of America. Clearly with a differential between iTunes UK (79p, 1.15 Eu) and Germany & France (0.99 Eu, 67.7p UK) there is not a level playing field. Those UK citizens who understand that they can use either the French or German sites to order directly on find they are charged the UK price if they are not able to supply as an address in either of these countries.
Although the CA campaign is focused on iTunes, perhaps because of the mainstream press attention it has attracted, Apple are not the only service where UK consumers are overcharged. The differential on Napster UK is even greater when comparing their UK pricing at 99p (1.44 Eu) against Apple European iTunes at 99c Eu (67.7p UK). This becomes even more distorted when US prices are used as a comparison 99c US = (55.4p). Clearly albums bought on the any of the services multiply the differential by a factor of 10, as most of the albums cost ten times a much as single tracks.
When we queried the UK Napster price back on 1 June 2004, Adam Howorth, Communications director at Napter UK told us: “it’s simply down to the higher wholesale price we get from the record companies in the UK. If they would reduce their prices, so would we.”
Overcharging UK citizens had always been the way business has been done, but most had imagined that this discrepancy would evaporate with digital goods. The old arguments that were always given; it’s a small market; goods are hard to distribute; it’s more expensive to support, all fall away with digital distribution. It is to Apple’s great shame that they have continued the overcharging, while clearly understanding all of the advantages that digital distribution brings.
We will be watching with interest the reaction of the British public to this. It may give an indication to their reaction when they start to realise that the DRM-protected goods that they are beginning to buy do not work on all of their various devices.