When is 99¢ not 99¢?

“Sony today announced the June opening of its European Connect Internet music store, where consumers can buy songs from 0.99 euros apiece and download them on their computer before exporting them to Sony minisdisc players and walkmans.”

I just love pricing policies in various currencies. .Mac costs $99 in the US and 99 Euros in Europe. That translates to a $125, or 25% more expensive in Europe.

I knew before any downloading services were released that the price point would, once again, be 99 cents (Euro cents) per song. And I’d almost be willing to bet 99p in the UK (could be 79p, but I doubt it).

So, what does this mean? Well, if you live in Europe, it means you’ll pay 25% extra for the same thing you get in New York for 99¢. If you are lucky enough to live in London, you might be paying 82% more (if they price it at 99p) or 45% more if they’re nice enough to price it at 79p.

Market theory says these price differences should be eliminated through arbitrage. However, thanks to the DRM built into the songs, it’s difficult to transfer the songs after buying low (in the US) and selling high (in the UK).

There is, perhaps, a way to get the lowest price, regardless of where you live. Londoners might be able to purchase iTunes gift certificates for themselves at the US store (paying the $.99 price) and using that from the comfort of their home on Abbey Road to download songs from the American iTunes store.

I’ll give the gift certificate trick a try when I can and report back with the findings….because if I buy one song at 99 cents from the US, it’s only really costing me only 54p, which is less then the Evening Standard. Now *that’s* a fair price for music.

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