Apple to lower prices of UK iTunes

Just as we heard yesterday, Apple has reached an agreement to standardize pricing across Europe. This in response to EU (and UK) concerns over Apple (and the record labels) engaging in anti-competitive pricing for music offered over iTunes. The move brings UK prices down to match the already standardized pricing found in Austria, Belgium, Denmark, Germany, Finland, France, Greece, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Sweden, Switzerland and Spain. A savings of about 10%. The rub? We'll have to wait up to 6 months for the change to go into effect.

[Thanks to everyone who sent this in]

[Brent @ Jan 9th 2008 10:25AM]

Nice article, but a little short. I think you should

[Brent @ Jan 9th 2008 10:26AM]

Ignore what I said above.

[jamma @ Jan 9th 2008 10:32AM]

I think you should ignore Brent too

[space_man3000 @ Jan 9th 2008 10:38AM]

haha, I was going to do the same thing.

[Ant @ Jan 9th 2008 10:28AM]

We'll see what price they come up with first before getting over excited

[Jakob @ Jan 9th 2008 10:29AM]

What about the non-Euro countries like Norway, UK, Denmark and Sweden?

Maybe they will adjust the price every day, 1 cent up, 1 cent down :P

[Jakob @ Jan 9th 2008 10:32AM]

Please forget this ^^

[Ant @ Jan 9th 2008 10:33AM]

Ar, the UK, what a great place to get ripped off on a daily bases. This sodden country has a bunch of rich toffs running it with no idea about what it’s like to have no money. I give up.

[Ethan @ Jan 9th 2008 10:35AM]

Good to see the point of the EU working nicely.

[zzebi @ Jan 9th 2008 10:35AM]

After reading the whole press release I don't understand one thing:
Why does Apple have to conform the EU laws by selling music on the same price in every member country if the music industry can still define different wholesale prices in different countries?
The problem is, that while the wholesale price of a song in the UK is higher than in the other EU countries, Apple will be forced to sell it on the same price. It's insane.
This is why Jobs sent out an ultimatum to the music industry: either they lower their UK wholesale prices to the normal EU level, or Apple will stop selling their music in the UK.

[Rednecs @ Jan 9th 2008 10:48AM]

I believe this has to do with the fact that a person in a EU country can buy things from another EU country if its cheaper over there as long as all taxes due in the country purchased from have been paid.

Some of my friends in the UK have bought stuff like xbox 360s from Amazon Germany as even with the postage it was better value compared to Amazon UK due to some promotional offers. This is completely legal as all German taxes and duties have been paid.

This will drive the countries to be more competitive wrt taxes and fulfil one of the aims of EU to harmonise taxes across the board.

So if I can buy a cd from a different EU country because its cheaper (due to cheaper wholesale rates which are cheaper due to lower taxes) why should I be stopped from buying the same songs on itunes.

[Rednecs @ Jan 9th 2008 10:58AM]

That said, I do agree that making Apple charge the same across the EU does push them into a corner. I would not have minded being allowed to buy from other EU itunes stores if they were cheaper.

Granted Apple would lose revenue in the UK, but it would be made up by increased revenue in the other stores. Now this should not make a difference if the profit per song is uniform across the board and higher prices purely reflect the higher costs.

[Alan Partridge @ Jan 9th 2008 1:31PM]

I dont think Apple have been forced to lower UK prices, (unless you can point to a source that says otherwise), they had several options to conform to European law and this is the route they have decided to take.

[nh @ Jan 9th 2008 10:35AM]

What do you mean sorry UK?
http://news.bbc.co.uk/1/hi/business/7178651.stm

79p -> 74p
So those unfortunate enough still to be buying DRMed music will save 5p a song. Pretty poor given that the US price is about 49p.

[Alex R @ Jan 9th 2008 10:58AM]

Americans also complain that PS3s cost a *massive* $400. In the UK it costs £400. That equates to about $800. Again, that's just us being ripped off. Again.

[vlute @ Jan 9th 2008 11:11AM]

Its always the same in the UK we do (seem) to pay a lot more for everything. Most of which seems to go on tax. Theres a good article there for you Engadget, find out the prices of major gadgets in various countries and why there are price anomalies. I for one brought an iPhone from the US. I got it for £200 plus £45 shipping. I did this ages before it came out in the UK, so I got it for a combined cost of £245 which is cheaper than the £269 you can buy it for on a UK high street now.
Also with the iTunes ive got an English and an American account, I buy most of my music on the American one as its so much cheaper...oh and you have way better TV shows! Im sure were probably not the most expensive country in the world for gadgets, but it does seem that way sometimes. Whats it like elsewhere?

[shanoboy @ Jan 9th 2008 11:22AM]

@ VLUTE:

Our dollar is a lot weaker than the Euro. It's like if an American went on vacation to Mexico and realized they could buy many of the same things they buy in the US for was less in Mexico.

Think of us poor Americans when we come to Europe on vacation and our dollar is worth roughly half of what the Euro when we go to get it converted over... :(

[Tim Brown @ Jan 9th 2008 11:29AM]

It is criminal that you have to pay 1.5 to 2 x the amount of money for every bit of technology in the UK. Its the same old excuse used every time by the manufacturers, shipping costs! Can Sony and every one else, please please tell us why getting goods from China to the UK costs sooooo much more than say from China to France? Anybody?

[Rednecs @ Jan 9th 2008 11:38AM]

@Alex R

For PS3 40GB
Amazon UK price £279
Less VAT - £41.55
Cost for comparison £237 and not £400!!
(The US price does not include the sales tax)
Difference of about £37 (Compared to US price)

@vlute
Similarly iphone price less VAT = £229 or a difference of about £29 (Compared to US price)
(not sure if iphone price in the US excludes sales tax)

This difference in prices can be easily attributed to higher labour costs in the UK which which will not only increase direct labour costs such as floor staff but will also seep into other overheads which involve people doing anything.

The difference of the differences between PS3 and the iphone could be in part because of the size of the packages. It will surely be cheaper to store and transport boxes of iphones than to do the same to the same number of PS3 boxes.

Any ideas how many iphone boxes can fit in a PS3 box!?!

[Student Driver @ Jan 9th 2008 1:42PM]

First, I hate Apple. Second, this isn't Apple's fault entirely, if at all. As was mentioned before, this is due to content owners, their negotiations with distributors, and finally the distributors themselves. For example, take the Donnie Darko soundtrack, and the track "Mad World"; you cannot buy that track by itself without purchasing the whole album. When the Gears of War video hit the web, a bunch of people wanted to buy the track again, and hit iTunes. When they got there, they found they had to buy the whole stupid album to get the one track. Many got mad, and left comments about the track there. However, if you went to Wal*Mart's download site, you would see the exact same situation. This means Apple was limited in how they could deliver the track, and ultimately how it was sold.

The same can be said for the UK. This situation is a perfect model of when "what the market can bear" is combined with multiple markets (or at least consumer awareness of multiple markets). I bet the distribution channels for music have higher costs, and is therefore being passed straight through to you. In the US, I can't recall any media distribution being limited by state, so you get the whole US when you agree (of course, it could be broken down by retail store chain or other descriptors, but we're staying simple) to distribute the music. In Europe, it appears to be limited by country for some media (maybe CDs and downloads) but all of the EU and UK for others (DVD region coding). With such a variety of hands in the pot, it's no wonder that you have to pay more. And, as long as you're willing to pay it, they will keep charging you for it.

Don't lament about the cost difference between yourself and the US using the exchange rate, and then buy the item. Just don't buy it. Vote with your money, because it's obvious your words aren't working...

[Tom B @ Jan 9th 2008 11:15AM]

I wonder if this is the last of the few things needed to be worked out before bringing the Beatles to iTunes... add that to a possible announcement on Monday?

[CB @ Jan 9th 2008 11:33AM]

I'm so excited, this may actually make me delete those 10,000 mp3's I've got on my HD, Oh and trash all those top 40 albums I've got on a DVD in my drawer, Oh and delete Limewire and buy a frukin lame-ass-last-years-technology iPod...on second thoughts...you know the rest.

I actually long for the good old days when music was real hard to come by and it meant something.
The sweet smell of fresh LP covers, the static on your fingers as you pulled it out of the sleeve, that slight nervous twitch as you dropped the needle on the run-in. You couldn't press 'skip' so instead you listened to the whole thing.
They'll probably package the experience in with the music file soon, start recording yours now, it's all we'll have left one day....memories

[Blaktornado @ Jan 9th 2008 11:43AM]

As a musician about to put their music on iTunes, this is horrible news D:

[eladnova @ Jan 9th 2008 12:19PM]

Great. Maybe they can now switch their energies to making the iPod touch Vwork with Vista 64 bit.

[samtherocker @ Jan 9th 2008 12:39PM]

I'd prefer to keep current pricing and have all the same CONTENT that the US gets… like good movies and TV shows!

[Paul @ Jan 9th 2008 12:41PM]

I am not suprised that the recording industry charge more in the UK. Pandora recently had to cut off it's UK users due to unfair licensing prices.

[Emmanuel Tetteh-Lartey @ Jan 9th 2008 1:20PM]

hi - Thomas Ricker, I take it that you hail from this side of the pond? A big hello from Manchester UK - in'it :)

[Rik @ Jan 9th 2008 1:28PM]

I remember a few years ago, car dealers in the North-West of the Netherlands were selling right hand drive cars en masse. People from the UK would come over by ferry, buy a car, and drive back whilst they paid about 20% less.

[Ronan @ Jan 9th 2008 2:42PM]

and thats 6 more months that im not going to purchase anything from that store

[MacroEQ @ Jan 9th 2008 4:00PM]

How many times have these regional mistakes been made by Engadget? Norway and Switzerland are NOT in the EU!

Official map - http://www.europa.eu/abc/european_countries/index_en.htm

Apple's press release clearly states "Europe" and not "EU".

To clarify this matter once and for all, "Europe" is a geographical continent and the EU is a "club of nations" that share political and economic law and regulations.

[matt byrne @ Jan 9th 2008 7:38PM]

I don't even care what price anyone else pays, I'd hate to be sad enough to care that a track costs me 79p in my home region and cheaper in France. What I get annoyed with is that you couldn't buy from other stores. I read the White Stripes had launched an EP in the States last month, for download and found it on US iTunes. How annoying that it wouldn't let me buy it, even though they were great songs. Well, I have them now anyway, but I wish I didn't have to resort to downloading it when I was more than happy to pay. If they want piracy to stop, they shouldn't limit those who'd happily buy it in this way.

[Jurisprudence @ Jan 10th 2008 12:39AM]

Couple of facts for all the Apple fanboys to chew on.

1) Apple are not disclosing which record companies are charging more and which do not. They could well be smaller labels charging more (and so have little effect on prices) but Apples' PR guys prefer to blame someone else than themselves.

2) Apples failure to negotiate well in business should not be bourne by citizens of the UK. They have proved how good they are negotiating 40% revenue pay-backs from networks looking to contract iPhone (and screwing EU customers in the bargain again).

3) Apple routinely, as a course of business, discriminates and overcharges citizens of the EU. As an example take the .mac pricing

http://www.mac.com/1/currencytable.html

Prices quoted in Euro also include VAT (Value added tax for those not familiar). Strange thing is that the EU doesnt have a single VAT rate, it varies 17-25% country to country so some are getting ripped off even more than others. Even taking this into account the €99 charge works out at $145 dollars for the same service. Nobody is forcing Apple to do this, nobody is charging them more for storage space, there are no record companies to blame. The fact is Apple can hide behind this press release blaming undisclosed record companies because the terms of the contract are covered by an NDA agreement saying they cannot disclose costs of dealings and as they have complied with the EU Commission they cannot be forced to disclose by the EU either.

BTW: I'm typing this on my MBP so I know how good their products really are. I just hate being shit on and ripped off. Oh and yes the MBP cost over €200 more ex.vat and ancillary taxes to buy than the states. Thanks Apple.