Dan Sabbagh: Media analysis
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Steve Jobs was in London this week promoting the wildly exciting but colossally overpriced iPhone – yours for £900 in the first year – with the phone alone costing £69 more than you would pay in the US. Apparently, the Apple boss believes that the costs of business are much higher in the UK (what do we do??), although this is not news.
A song on iTunes in Britain will set you back 79p, in Europe it is 99 cents, or 69p. In the US, it is 99 cents again, which translated into our money is 50p, although the difference with the States, but not Europe, is that sales tax is excluded and when that is factored in the price is more like 55p. And the pennies add up. Last year the value of music sold at retail in the UK was £1.75 billion, and digital ran at 6 per cent of the total. Let’s assume that Apple dominates digital sales and accounts for 4 per cent of the whole market: that represents roughly £43.9 million.
However, if Steve Jobs’s company had been charging American prices, it would have received only £30.6 million. It would be better still if the consumer had a choice, but Apple’s control over proprietary technology means that potentially cheaper rivals, such as HMV, cannot sell songs for download on to the market-leading Apple iPod. So the market is skewed.
Yet in a digital era, it should be easy to buy songs abroad to take advantage of the cheapest price. Apple, though, ensures that consumers are tied to their home country music store by insisting that purchases be made via a credit card registered to an address in that country – an obstacle that is not insurmountable, but at a quarter past midnight, when that dance track is one click away, it is too much like hard work to make a friend in the US buy it, burn it and send it over.
This is now under investigation by the European Commission. Unfortunately, such inquiries take years, appeals and all – this one dates back to 2005. While they rumble on, Apple can carry on as before, on an innocent until proven guilty basis. More to the point, the word on the boulevards of Brussels is that the Commission is having trouble making its case stick. To do so it has to prove that Apple is dominant, which it may be in the fast-changing world of digital music, but is not in overall music sales. And it is usually a principle of competition that emerging industries do not get thwacked with regulation.
So it is hard to force a price cut.
Apple, for its part, does not like to say much, but it does blame the record companies for forcing it into country-by-country stores. This is familiar stuff: Apple is a past master at shifting blame on to record companies for things it controls – Jobs accused the world’s labels of preventing him selling music without copy-protection, confusing nicely copy-protection with his insistence on proprietary standards that prevent the link between the iPod and other digital music stores. EMI agreed anyway, and it sells music that could be copied by pirates, but is still tied into Apple format standards.
Yet when record companies say they need Apple to run each store on a country-by-country basis, they have a point. Copyright is a national sport; some acts are signed to different labels around Europe. So Apple needs to strike territory-by-territory deals. The majors also say they need staggered release dates to coincide with promotional tours, which has some merit, although not if 50 Cent has a fit of pique after being outsold by Kanye West and does not turn up.
The future has to be greater synchronisation. Consumers should be able shop anywhere – and a digital store simply works out which country the person comes from (back to that credit card) and pays the appropriate parties accordingly. If, through some bloody-mindedness, an artist wants to charge Germans more, then customers should be alerted at the moment of purchase. As for staggered release dates, they should be allowed, but if fans want to get the US edition now, why not?
Exchange rates may move, but it would be better if the Commission could shame Apple into action. As things stand, it is Apple that should be explaining itself – to customers who should complain using the internet. It is, quite simply, a rip-off.

–– A state of permanent revolution seems to exist at the Telegraph Media Group, where journalists at the daily and Sunday titles leave at a bewildering rate, and editors come and go at will. Two weeks ago, Patience Wheatcroft, Editor of The Sunday Telegraph, left, after she had tried and failed to argue in favour of retaining a separate Sunday operation – although at the time the message was that no seven-day newspaper was planned.
Now it appears, in little more than than seven days, that that is not the case. Daily staff have been told to make themselves available for Saturdays, prompting a different conclusion. Change is necessary, but the best journalism is usually done against a fantasy backdrop of a newsroom that believes it is the most important place on earth. Perhaps the whirligig is how the Barclay family like it – remember the succession of editors when they owned The Scotsman. After all, roughly the same number of readers turn up daily, but the risk is that revolutions do damage, too.
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