iTunes Europe - 1.29 Euros?

[chabig]

For 1.25€ I WILL NOT BUY ONE SINGLE SONG OR ALBUM FROM ITUNES OR ANY ONLINE MUSIC STORE!

I'll buy records (CD, VINYL) and download .mp3 from P2P, that's what I'll keep doing.

Pedro,

That's a very emotional statement, but it's not a logical argument. Would you really pay €15.00 for a CD with one good song, when you could just buy the song legally for €1.29? That's the beauty of the online store. You don't have to buy an entire CD to get the songs you want.

Chris

 

[ktrout]

One of the reasons for the higher price was taxes.

21% tax seems absurd here in the US. NYC I think is only 13% and that supports county, city, and most of the state government.

There are people who advocate doing away with all other taxes and replace them with a 15% national sales tax and then give the extra back to the people as a $5000 check per person.

NYC combined sales tax is 8.25%.

What are average album prices in the EU?

 

[jxyama]

The only benefit iTunes gives, that I can see, is that you get the music quicker and you don't buy what you don't want.

However, at that price, I'd rather buy a CD. I don't understand how it has been so succesful for such a high price. I hope they reduce the price as I won't use it and I would really love to.

and apparently, those are big benefits: people feel that for $10, they'd rather have 10 songs they've heard and like rather than one album with two songs they've heard.

and it's quick, like you said. it's like buying candies at checkout lanes - you just get one because you want it. instant gratification. i suspect it's not the rational purchase that's driving iTMS - if you want one snickers bar and decides to get one at the checkout lane, you don't go back to the shelves to see if multipacks are cheaper, do you?

 

[chabig]

Record labels and Apple must be raking it in, as they are charging roughly the same to download the albums as they do if I bought the cd. They obviously don't need to pay for CD printing etc for the download version, so why is it so expensive? Running the iTunes service can't be that expensive.

Yes it can. Which do you think is more expensive, printing CD inserts or buying massive server farms, building network infrastructure, and paying for the bandwidth needed for distribution?

The only benefit iTunes gives, that I can see, is that you get the music quicker and you don't buy what you don't want.

I think those are exactly the benefits. And to me, they are worth the price. People pay for convenience and selection. Ask any retailer. People also pay for speedy service. Ask Fedex.

Chris

 

[MCCFR]

... Well that roughly translates to 85p in the UK.

Now if that includes VAT, that's not too bad, is it?

And if it doesn't - that's £1.00 (100/117.5=0.8510).

 

[bluefido]

An Odd Sense of Entitlement

So Apple defends the price of $0.99 as being appropriate for US customers, but considers that 50% more is fine for Europeans.

Presumably that isn't the same Apple which recently denied disadvantaging European customers.

It is as if Apple is violating peoples' civil rights if they set a price that is too high....the sense of entitlement always makes me cringe. The best way to express your dissatisfaction is to not purchase Apple products.

Yes, I do think $1.50 (is that the price in dollars?) is high, but people act as if it is the end of world. There are far more things to be angry about than a price of a song. And no, it is not discrimination. They set a price point that makes sense for Apple and its bottom line and not for North America.

 

[Mynd Glider]

I'm not surprised

I,m not surprised at the price as the EU ipods r quieter than the US ones .Mabee we r paying for LOUDER tracks

 

[Applespider]

But don't you get national health insurance? My income taxes (national and state) are more than 34 percent--probably closer to 40. My sales tax is almost 10 percent, and I have to pay for health care out of my own pocket. Personally I'd take your tax structure, plus free health care, over ours.

Yeah...tho there are so many demands on it that it doesn't work particularly well. There are suggestions that those who can afford to should be encouraged to take out medical insurance and leave the 'free' service to those who can't afford to.

If you earn over £34K in the UK (or thereabouts - fairly easy to do in London with the high cost of living), you pay 40% in income tax, plus tax for national insurance plus 17.5% VAT...

 

[bluefido]

Em, The European Union is now the largest trading block on the planet. The old crap about the US being a larger market, therefore having better economies of scale doesn't add up anymore.

I'll bet that its 1.29 + Tax. When you buy photographs through iPhoto 4 in Europe, its the price of the print plus your local tax (21% here in Ireland, where I live).

US is a larger market for Apple. European Union may be the largest trading block but that does not necessarily translate into being a more important market for companies. Also, the cost for Apple to do business is higher in Europe than it is in the US.

 

[bluefido]

Yeah...tho there are so many demands on it that it doesn't work particularly well. There are suggestions that those who can afford to should be encouraged to take out medical insurance and leave the 'free' service to those who can't afford to.

If you earn over £34K in the UK (or thereabouts - fairly easy to do in London with the high cost of living), you pay 40% in income tax, plus tax for national insurance plus 17.5% VAT...

It is odd that this somehow turns into a contest between the U.S. and Europe. This is a forum about a specific company that happens have its home in the U.S.

By the way, there are advantages in U.S. and Europe. Each has their own qualities that are admirable.

 

[Chisholm]

Thanks Chris

Yes it can. Which do you think is more expensive, printing CD inserts or buying massive server farms, building network infrastructure, and paying for the bandwidth needed for distribution?



I think those are exactly the benefits. And to me, they are worth the price. People pay for convenience and selection. Ask any retailer. People also pay for speedy service. Ask Fedex.

Chris

I just went to all the trouble of logging in to mention the same point regarding the costs of hardware. If we can assume that Apple uses its own hardware to run iTMS their costs would be astronomical for hardware upkeep. We have a number of XRAID boxes and the drives kill out on a regular basis.

 

[takao]

NYC combined sales tax is 8.25%.

What are average album prices in the EU?

in austria it's for most new albums 17-18 €..thats about 20-21 dollar (including 20 % VAT)
sure i can get some new albums for 15-16 sometimes but that are special deals

for old cds or classics you have to pay 11-12...

3 years ago it was about 2 euros less...because of that prices i don't get music in the stores...

at 1,29 € a 12 track cd (which is more logical than a short 10 track cd) will cost me 15,48 euro but i have no colored inlay,case and cd...
so in the end it is the same amount of money..

but i doubt a price at 1,29..i would rather say 1,39 because prices are already going up to 19 € for a new cd...

_when_ i buy a cd i buy those cheap 8-10 euro cds
12 euro is the absolute maximum for me (if i buy 4 cds a year)

 

[Victoriatus]

It still shocks me to read "I would buy a song for 1.19, BUT 1.29 IS AN AFFRONT TO HUMANITY AND I HATE APPLE AND I WILL NEVER SUPPORT IT... SCREW YOU GUYS, I'M GOIN HOME!"

What makes you think that Apple can get the same prices in every nation on Earth? Licensing and taxation vary EVERYWHERE.

That said, the source might not even be right. I am sure Apple is trying its best to get the price at that magic "99" number, and that may be a big reason it is taking so long to get iTMS in Europe.

I have a bad feeling that this might have something to do with record labels wanting to push prices up. Remember Apple denying such news by saying they have a multi-year contract with the labels, and the 99¢ price is fixed in the contract? Apple doesn't have multi-year low price contracts with European labels and ditributors yet, so they might be able to push the price higher if they wanted.

How about that?

 

[bumfilter]

I guess it depends on how you buy music. I prefer buying CD's from artists I like, then I don't mind having a whole album's worth. I don't usually need one or specific track(s), so I guess buying CD's suits me better. So in the case of your candy bar, if you plan on eating 10 bars it makes sense to buy a multipack rather than 10 seperatley.

While I can understand how buying massive server farms can be expensive, this is Apple were talking about. I'm sure they can afford to give themselves a nice discount on a couple of Xserve's. Even so, the initial investment would pay for itself eventually, then from then on all they need to pay for is staff and upkeep, which must be far cheaper than mass-producing CD's.

I love the idea of iTunes and I would love to buy from it but I still think the price is too much for what you actually get, especially when album prices are so similar. All it takes is one day for the CD to get here, and I can wait that long and as I said, I usually buy just albums, so I guess CD's suit me best.

 

[ITR 81]

Not a bad price considering it's including taxes and a huge license fee from the Euro record companies.

I use to buy CD's and carparts all the time from the UK and Germany and most of the time the VAT(Value Added Tax) is included with the purchase unless they say it's not.

Most CD's I bought from Germany cost me around $25-30 US back in the late 90's. I can imagine those prices are even higher now with the current exchange rate.

CD's I got from Japan cost me around $22-25 for one album.
Sometimes they include their 5% tax and sometimes they don't.(depends on where I buy)
Most imported Japanese Albums I've found sell here for around $28-30+a pop.

(ALL prices included taxes but no custom charges or shipping charges I had to pay.)

If I can buy my music through these International iTMS's I will..because it's just cheaper for me.

 

[Stike]

Alright people, time to shift one gear back.
There ARE currently online music providers available in Europe, and Germany, where I am from.
Most of those (rare) services use "Phonoline" a service cooperating with Deutsche Telekom AG. Lets do a quick comparison of services I stumbled across while SEARCHING for them (right, they are not advertising that much).

1. Popfile.de - Codec: WMA - Price: from 0.99 € (seldomly) to 1.49 € (regular) Selection: about 100.000 songs (!)
Comments: The client application "MyPlaylist" (iTunes ripoff) exists even for Mac OS X, but is hideously designed and a nightmare in user interaction. iTunes wins...

*Using OD2 music service:*
2. Tiscali Music Club - Windows only. Website not accessible, just like buy.com
3. Karstadt.de - the same
4. kontor.cc - the same
5. mtv.de - the same
6. MediaMarkt Music - Preview works, each title is 0.99 € but order is for Windows only

7. eventim-music.de - using Phonoline (again) - WMA - MyPlaylist jukebox - 0.99 € EACH!

Conclusion: At least 2 services here, (though only 1 works on Mac) provide a price of 0.99 € per track. If iTunes has to compete, they should offer the same price.

 

[Bad Beaver]

Rumoured evolution of the iPod combining music, video and phone to be shown in Paris.
​

Isn't this more interesting? An Apple branded smartphone would be *great* (the given "PDA" functions of the iPod suggest a smartphone) as frankly, syncing a P800 with iSync is *the horror*. I wonder about the battery though, it would have to be much stronger than the current one.

I'd bet such an iPodphone would enable you to buy songs from the iTMS on the go, and I wouldn't be surprised if it did not look much different than an iPodmini.

 

[MCCFR]

Another way that Apple shafts Euro customers is this pan-European sales tax that they like to impose.

In the UK, sales tax is 17.5%, but Apple sometimes charges a 21% rate ( for services such as dot Mac ).

Who pockets the difference between what the government take and what Apple actually charge ? With that sort of mark up, there would be no need to claim that credit card transaction charges need to be additionally factored in as well - are we to believe that US credit cards don't charge for their service ?

Apple always protests that it's adopting a uniform sales tax rate across all of Europe, but in the US, sales tax varies from state to state and Apple can accomodate that with no problem. What's so difficult about applying the correct sales tax rate for an entire country then ?

But sales tax is not the same as VAT.

Accounting for VAT for cross-border transactions of the non-tangible type represented by .mac or iTMS would be a nightmare unless you managed it through a single EU nation-state. Where is the transaction executed? UK? That's 17.5% VAT to the consumer, but you also have to reclaim the 17.5% from the VAT you paid to the record company. But what if you're a British expat with a British credit card, living in Italy? Who gets the money? What's the relevant rate of tax?

Tangibles are easier. You're buying an item that your Apple end-market bought for a known price from someone else (normally Apple Europe, who in turn purchased it from Apple US). They know where they're delivering and the rate of VAT is consistent across the board.

 

[whiskeybravo]

Completely OT

But don't you get national health insurance? My income taxes (national and state) are more than 34 percent--probably closer to 40. My sales tax is almost 10 percent, and I have to pay for health care out of my own pocket. Personally I'd take your tax structure, plus free health care, over ours.

Well, your nominal rate may be close to 40% if you are quite wealthy (seems a bit unlikely for a student, but what do I know, you could easily have a large income producing activity), but if you pay anywhere near that you are a lonely fool who needs an accountant. I'm in the second highest tax bracket, and my actual federal taxation rate last year was under 15% and still under 25% including Social Security. My state income taxes are less than 5% which is typical.

In any event, if you desire a social utopia where the government takes most of your money and then decides what "services" you will be given, there are lots and lots of places that still think that works. Please go to one of them so that I will not have to support you if I should ever be so unlucky that you get your way with our government Denmark is very nice in the summer and the girls are quite pretty

Personally, I'll choose to control where my own money goes, thank you.

 

[whooleytoo]

Conclusion: At least 2 services here, (though only 1 works on Mac) provide a price of 0.99 € per track. If iTunes has to compete, they should offer the same price.

And bear in mind, when iTMS launched in the US, it blew all the previous online music selling models out of the water. In Europe, it's going to struggle to equal the competition at that price.

After all the furore in other threads about Apple (supposedly) being forced to sell songs for $1.25 in the US, now it's $1.50 here!

 

[onemoof]

Taxes

I don't know about anybody else, but I don't get charged any tax on the iTMS store, but Minnesota tax is 6.5% so who knows.

In America there's no need to charge tax if the buyer is in a different state. Some companies do however, and it's always the buyer's location that determines the tax rate they're charged.

Why do they call it value added tax anyway? I don't see any additional value added in paying tax, it would be more valuable for me to buy products tax free.

 

[CmdrLaForge]

I personally doubt that it will be that successful at that price. Not as successful as in the states. If you look on the current exchange rate the price should be .89 cents instead of 1.29Euro.

But I doubted that the iPod mini will be a success as well...so don't listen to me.

 

[The Red Wolf]

Value Added Tax

that's bull****! 1.29 euros for a song is almost the same I pay for my music that I buy on CD! how the hell can there be so big differences in taxes and licensing fees?...

VAT or Value Added Tax. That is what we're looking at. It's not across the board in Europe but it is in some countries. As for the Euro... There is no guarantee anywhere that says the Euro will not dive against the dollar at any point. If the exchange rate were 1.50 Euro to the dollar you wouldn't be complaining about this, you'd be complaining that the States pays too much for the iTMS .99 cents is still lower than a CD.

Does it bother anyone that a PowerBook G4 17" costs 3,023.79 Pound in Ireland and 1949.00 Pounds in the UK? The exchange rate does not support the drastic different between the Irish Pound and the English Sterling. Yet the PowerBook is still extremely successful. You cannot base the success of a product on it's price in other countries.

 

[JFreak]

the problem is, that even cd:s are overpriced. it costs an euro to make and distribute the cd to the local music store shelf, so while the new cd:s retail at over 20 euros (in finland), the profit is huge; of course, there are many instances eating from the cake and nobody really knows how much the label benefits from it.

IF...

the itms europe song price will be an euro (making an album cost ten euros) that would give the label 66 cents pure profit per track (or 6.60 euros per album), and they know we know that. and when we realize that we're okay with the fact that label is satisfied with getting 6.60 euros profit per cd, we will begin demanding that the regular cd price should be ten euros tops, including new hit albums.

that's what they have begun to fear.

 

[JFreak]

I personally doubt that it will be that successful at that price. Not as successful as in the states. If you look on the current exchange rate the price should be .89 cents instead of 1.29Euro.

i'd be happy if the price was 1eur per song and 10eur per album.

(i'd be willing to buy many hit singles from the hit albums that have one or two good songs and ten(ish) filler songs.)