After reading a recent tweet from a friend ranting about crunchyroll’s region locking and disabling watching some anime for some people living in certain regions, it got me thinking. It certainly seemed that the disabling was due to either commercial interests (ie. they already sell/broadcast the stuff there) or simple fear of piracy (prevention of Chinese IPs from reading the series will prevent the Chinese from copying them). He said stupid old media companies don’t get it. Indeed, they don’t, and I agree wholeheartedly. The problem is, their business model doesn’t work so well with a world without borders.
Historically, companies have varied their pricing geographically. A Big Mac in China would cost more in their currency than a Big Mac in the U.S. because western food is a niche, luxury product there. In the U.S., its close to being a staple, and its really really cheap (again, for the kinds of income earned). Books, likewise are sold at different price levels depending on their country of sale. In Malaysia, a Star Trek novel would cost RM14.29, which is about 3.77 USD. Likewise, the same novel would be sold for $12 in the USA. For every rule there are exceptions. Apple doesn’t sell their computers at different price ranges based on location because they consider their products niche. If their MacBook costs $999 in the US, it will cost $1599 in New Zealand.
So I mentioned that books sell at different prices in different places, because they might be printed in the country of sale. But what if they were imported? A person in the US would surely want to buy a Star Trek novel for 1/3rd the price they would get it in the US. The only thing that prevents this is import restrictions. You might be able to buy a few, but you might get taxed for it to an amount on par with local prices. There are a number of these around and some companies lobby for laws like these to be passed. They are also passed because it protects local industries. Many countries champion free trade verbally but they still do have rules that are protectionist in nature. What’s important is that things that are not meant for sale locally are not sold locally. The recording industry however, is a little smarter about this. They get hardware makers to make their devices only able to use media sold in certain regions. This effectively segments the world, preventing people from buying goods that are cheaper from another country at the expense of the more expensive local products. Improvised protectionism.
Then came the internet, which is classified as a communications device, much like a telephone. So data that passes across a country’s borders are not subject to the same rules books, drugs and other tangible things are subject to at the border. All of a sudden, as global bandwidth increases, data is imported and exported freely around the world with no form of restriction whatsoever, effectively nullifying the software and media companies’ efforts to rip off those who are paid more and can afford more expensive things. As expected, they would retaliate in a manner we are all too familiar with now, by attempting to apply laws for tangible products on products that are intangible, and can easily be shouted from one side of no man’s land to another. And because so much money is made from data these days, the stakes are higher, and businessmen are even more desperate to prevent people from selecting the lower cost.
Crunchyroll was, and still is a website that distributes media that is broadcasted for free in some parts of the world, for free to everyone with access to the internet. They came under fire for a while but managed to strike deals with companies to allow them to continue distributing media in a delayed fashion, and charging for immediate service. However, distributing media in a delayed fashion for free is something that probably would never sit will with people who want to make money. Hence, the region blocking, forcing people to resort to other less ‘legal’ means to obtain the desired media when it is not provided in their own country of residence.
Some companies have started to trade their software online instead of selling them physically to people now. Examples are Steam and Microsoft. EA has also started this by pushing their RA3 expansion pack out via the Internet. Personally, I’ve bought some software online, because its hard to get them in a country which does not sell some software you want in a physical shop. If one were to be prevented from obtaining something legally, its difficult to justify preventing them from obtaining it illegally. This model of sales however, means that everyone around the world pays the same price for the same product, and I don’t see how it is a disadvantage to companies that produce the software. Also, being an anime and Japanese subculture fan, obtaining anime and manga from Japan has never been easier. Since I can read Japanese, importing the comics allow me to circumvent having to buy the extremely overpriced books from Borders. But I am but one of many, and Borders may still stick with their pricing because there are some who would just buy from them anyway. They still are competing with imports however, and as public awareness grows, they may not be able to hold up such a business much longer.
Perhaps now, the Internet has started to tear down the borders that separate the world, and begin to create a world where Perfect Information and Market with Perfect Competition can finally exist?
One Comment
Hmm, some of those price differences could also be due to localized economy and inflation.
Localized economy really refers to the fact that some countries can afford to have lower margins because everything else has lower margins. Perhaps there is no minimum wage in some countries so the shops could charge lower prices due to that. Perhaps the market is massive in some countries so they can do get lower margins. Typically in New Zealand you’ve got a smaller market, so shops have to make more of a margin to survive.
As for inflation, well, things just get more expensive at different rates in different countries.
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