Dan Sabbagh, Media Editor
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Apple and two music majors, Universal and SonyBMG, face off against the European Commission today over the one-size-fits-all pricing of iTunes that, predictably, leaves UK consumers ripped off. It costs 20p more per song to buy from iTunes in the UK, and you can't shop in Europe because Apple insists you have a credit card registered to a eurozone address before you do.
Most of the blame for this lies at Apple's door: there should simply be a pan-European, indeed global price for music. Record companies don't set the price, and most of the restrictions they enforce are reasonable: copyright arrangements are national, not global, and they vary for artists in different countries. However, these are increasingly exceptions: there are only four music majors globally; greater convergence is possible.
The one problem for the Commission is trying to allege that Apple is already dominant in what is still an emerging market. That is the wrong way to go: instead Apple should be encouraged to do better by, if necessary, turning over the matter to British regulators. It is in the UK that the overpricing takes place.
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How much does Apple make off the music in the UK? In North America, the iTunes Store is a break even venture, with most of the revenue going to the major labels. Apple just uses the service as a convenience for people who buy iPods. I suspect that these prices are dictated by the majors more than Apple (and I suspect that they might try to charge more a la NBC Universal with video).
Chris, London, Canada