6 ms·

Can we just agree that it's wrong to do market segmentation for electronic goods based on geographic location? It's an anachronistic model that has no justifica

by slavak 15y ago

Can we just agree that it's wrong to do market segmentation for electronic goods based on geographic location? It's an anachronistic model that has no justification other than for padding BigCo's(tm) profit margins. If the big media companies actually cared about piracy they would abandon this system and see piracy drop significantly overnight. Then again I think we all know that's just an excuse to try and hang on to the overinflated profits they're accustomed to for just a little bit longer.

rythie 15y ago
With a 8x difference in wages [1] the price of the book in India should surely be $4 if it is $32 in the U.S. Are suggesting it should be $4 everywhere? which means it's still cheaper in the U.S. compared to salaries. [1] see top item on (Sr. Software Engineer...): http://www.payscale.com/research/IN/Country=India/Salary http://www.payscale.com/research/IN/Country=India/Salary and http://www.payscale.com/research/US/Country=United_States/Salary http://www.payscale.com/research/US/Country=United_States/Sa...
- guard-of-terra 15y ago
  1) Market can figure it out. At which price would you gross more money? I guess the answer would be something like $10. Books are overpriced anyway in the USA, and there's no reason to pay $30 for an ebook. 2) You can still make promo prices for different regions, but the service should be available everywhere.
  - rythie 15y ago
    TBH, $30 and not sell it in India due to the risk of cheap imports. At $10 it's not going to sell 3x as many as at $30 in the U.S.
    - guard-of-terra 15y ago
      Okay, but then again: Making conscious choice to not sell in India and then bitching about piracy in India is immoral. You can still set the price to $30 but you have to actually sell worldwide to have any moral grounds against worldwide piracy.
      - keithpeter 15y ago
        UK estimated total of University students: just under 2 million (BBC figures, 2009) and shrinking slowly India estimated total of University students (or at least places): just over 12 million, government policy to increase by factor 2 over by 2025 (BBC 2011 article) I think you could discount heavily to something close to local wage rates and still make a handsome profit in India, especially with electronic distribution reducing the distribution costs. Does anyone else remember/use the Indian editions? I remember Tata/McGraw Hill having a series of Indian printed editions of popular texts. Local production and typesetting, lower price. Some of them even made it to the UK in the 1980s.
- rmc 15y ago
  It is better than when the book isn't being sold at all. This is not a $10 vs $4 vs $4 everywhere vs $10 everywhere. Currently digital distribution sucks if you're outside the USA, and is OK but not great if you're outside a handful of rich countries.
- slavak 15y ago
  Your way sounds great. Unfortunately, in practice this system is usually used to raise prices outside the US for countries where the public is used to paying more for stuff - not the other way around. Anyway, I was mostly referring not to price differences but to availability differences. You can argue for or against price differentiation, but I challenge you to provide one good reason why I can purchase a movie on a DVD in my country, but not watch it on Netflix - or why that movie would become available locally months after its US premier.
colonelxc 15y ago
While I too think that market segmentation as it exists for digital goods is stupid, I don't think it is done just for the money. Different countries have different laws, different taxes, and your home country has different treaties and export control regulations that all need to be accounted for when selling to other countries. In some cases there could be markets/services that abstract some of this away, but it is not a trivial problem. If it was trivial to do, then the only segmentation you would see would only be differentiating on price (getting the most that someone in that region would pay for it), instead of not selling it in those countries at all. Now, the RIAA/MPAA has deep enough pockets and plenty of lawyers that they could have figured all this out for themselves already, and could have built a great online distribution system for themselves. So for them, segmentation is purely a play for money, though (hopefully) it will hurt their profits in the long run.
- pmjordan 15y ago
  As far as I can tell, the reasons are that there are RIAA/MPAA-like cartels in most countries, which control the local distribution rights. Anyone wanting to sell music needs to negotiate deals with each of these individual copyright fiefdoms in order to be able to do business in the respective country. The legal costs are similar for each country, the expected returns vary wildly with affluence and size of the country. Apple has very, very deep pockets and a track record of making money hand over fist, and they've got quite far with music, but movies and TV series are only available in a few countries near the top of the list in terms of GDP. You can infer from that how hard it must be for anyone else. I assume they make it so difficult because they're terrified of upsetting their existing distribution channels. There's no other way I can explain why a DVD is cheaper than the same movie on iTunes, and why CDs on Amazon are still often cheaper than their MP3 counterparts on the same site.
- slavak 15y ago
  To be totally frank, I don't really understand the legal requirements from this. Do I really have to comply with all of a country's laws in order to allow its citizens to purchase electronic goods from my online storefront (assuming I have no physical presence in their country)? If so, why? And what possible sanctions do they have against me? Logic would dictate that the country would be responsible for barring access to such resources from within its borders - not individual foreign bussinesses.
cturner 15y ago
> it's wrong to do market segmentation for electronic > goods based on [..] location I think it's OK to do it, so long as you do it in a way that doesn't leverage the government to be your enforcer. I worked on an education publishing system. They were concerned about customer organisations photocopying the books. They implemented an online learning system, where each book came with one license being a serial number printed inside the cover. Now the students could tell when they were being short-changed.

by slavak 15y ago

rythie 15y ago

With a 8x difference in wages [1] the price of the book in India should surely be $4 if it is $32 in the U.S. Are suggesting it should be $4 everywhere? which means it's still cheaper in the U.S. compared to salaries. [1] see top item on (Sr. Software Engineer...): http://www.payscale.com/research/IN/Country=India/Salary http://www.payscale.com/research/IN/Country=India/Salary and http://www.payscale.com/research/US/Country=United_States/Salary http://www.payscale.com/research/US/Country=United_States/Sa...

guard-of-terra 15y ago
1) Market can figure it out. At which price would you gross more money? I guess the answer would be something like $10. Books are overpriced anyway in the USA, and there's no reason to pay $30 for an ebook. 2) You can still make promo prices for different regions, but the service should be available everywhere.
- rythie 15y ago
  TBH, $30 and not sell it in India due to the risk of cheap imports. At $10 it's not going to sell 3x as many as at $30 in the U.S.
  - guard-of-terra 15y ago
    Okay, but then again: Making conscious choice to not sell in India and then bitching about piracy in India is immoral. You can still set the price to $30 but you have to actually sell worldwide to have any moral grounds against worldwide piracy.
    - keithpeter 15y ago
      UK estimated total of University students: just under 2 million (BBC figures, 2009) and shrinking slowly India estimated total of University students (or at least places): just over 12 million, government policy to increase by factor 2 over by 2025 (BBC 2011 article) I think you could discount heavily to something close to local wage rates and still make a handsome profit in India, especially with electronic distribution reducing the distribution costs. Does anyone else remember/use the Indian editions? I remember Tata/McGraw Hill having a series of Indian printed editions of popular texts. Local production and typesetting, lower price. Some of them even made it to the UK in the 1980s.
rmc 15y ago
It is better than when the book isn't being sold at all. This is not a $10 vs $4 vs $4 everywhere vs $10 everywhere. Currently digital distribution sucks if you're outside the USA, and is OK but not great if you're outside a handful of rich countries.
slavak 15y ago
Your way sounds great. Unfortunately, in practice this system is usually used to raise prices outside the US for countries where the public is used to paying more for stuff - not the other way around. Anyway, I was mostly referring not to price differences but to availability differences. You can argue for or against price differentiation, but I challenge you to provide one good reason why I can purchase a movie on a DVD in my country, but not watch it on Netflix - or why that movie would become available locally months after its US premier.

colonelxc 15y ago

While I too think that market segmentation as it exists for digital goods is stupid, I don't think it is done just for the money. Different countries have different laws, different taxes, and your home country has different treaties and export control regulations that all need to be accounted for when selling to other countries. In some cases there could be markets/services that abstract some of this away, but it is not a trivial problem. If it was trivial to do, then the only segmentation you would see would only be differentiating on price (getting the most that someone in that region would pay for it), instead of not selling it in those countries at all. Now, the RIAA/MPAA has deep enough pockets and plenty of lawyers that they could have figured all this out for themselves already, and could have built a great online distribution system for themselves. So for them, segmentation is purely a play for money, though (hopefully) it will hurt their profits in the long run.

pmjordan 15y ago
As far as I can tell, the reasons are that there are RIAA/MPAA-like cartels in most countries, which control the local distribution rights. Anyone wanting to sell music needs to negotiate deals with each of these individual copyright fiefdoms in order to be able to do business in the respective country. The legal costs are similar for each country, the expected returns vary wildly with affluence and size of the country. Apple has very, very deep pockets and a track record of making money hand over fist, and they've got quite far with music, but movies and TV series are only available in a few countries near the top of the list in terms of GDP. You can infer from that how hard it must be for anyone else. I assume they make it so difficult because they're terrified of upsetting their existing distribution channels. There's no other way I can explain why a DVD is cheaper than the same movie on iTunes, and why CDs on Amazon are still often cheaper than their MP3 counterparts on the same site.
slavak 15y ago
To be totally frank, I don't really understand the legal requirements from this. Do I really have to comply with all of a country's laws in order to allow its citizens to purchase electronic goods from my online storefront (assuming I have no physical presence in their country)? If so, why? And what possible sanctions do they have against me? Logic would dictate that the country would be responsible for barring access to such resources from within its borders - not individual foreign bussinesses.

cturner 15y ago

> it's wrong to do market segmentation for electronic > goods based on [..] location I think it's OK to do it, so long as you do it in a way that doesn't leverage the government to be your enforcer. I worked on an education publishing system. They were concerned about customer organisations photocopying the books. They implemented an online learning system, where each book came with one license being a serial number printed inside the cover. Now the students could tell when they were being short-changed.