Premium pricing in Australia

[scizrfnd]

$2 more a month that the US when our dollar is essentially at parity is ridiculous. There may well be some international business related taxes or otherwise contributing to the pricing differences per country, but some explanation would be appreciated.

[user-removed]

Also in New Zealand Premium pricing is much more.

Can anyone start discussion with us. I, in Finland, pay 9,90 € per month for Premium - happy finn 😄 - (and there is also 4,90 € Unlimited). Why in those two countries services are much more in price?

Maybe record labels asked those prices?

[LincM · Accepted solution]

I used to think the same, but let's face it: we're more expensive of a market to tackle. See the following:

Hosting:

If it's hosted locally, they have to pay for local hosting. This is almost twice as expensive MB:MB as it is in the US. Stupid, I know, but it's how it is.

If it's hosted semi-remotely, such as in Indonesia, then we end up with ping issues, international data exchange issues (from a licencing point of view) and security issues (which is why Akamai stopped hosting there). And of course, they can't host from the US for the first two reasons I mentioned, only both reasons get muddier.

I'm not sure if they host here or remotely, but I'd be pretty confident it's local so the service works better for the users.

Marketing:

As a smaller headcount and just as many competitors in the market (see MOG is out at the same price too now), the risk to go to market is just the same, but the cost is higher, since we have higher advertising and marketing costs. Sure, we give a lot more away from free than they do in the US, but with fewer potential buyers, there has to be a premium leveraged against the inflated costs of doing business here. Not to play devil's advocate, but at least it's not as much of a markup as iTunes. Seriously, $9.99 in the US and $16.99 over here? Now that's not justified.

Currency fluctuations:

This is probably the biggest one. Remember when we were at USD 50c? Yeah, that wasn't all that long ago. Australia averages, if you look at the last 40 years, in the late 70c mark. If we go back, even to 85c, it'll actually be cheaper for them to offer it to us than they're giving it to the US, the home of Spotify. It's likely we'll hold above the 90c mark for a couple of years to come, meaning they're relatively safe, but exposure to offshore markets makes American investors nervous, even if it is Australia or China.