Jesse Rivest's Blog

What's the deal? CDs in New Zealand and (if I recall correctly) Australia are nearly double the price of Canada and the USA. In my several years of "down under" living, I've heard countless observations and discussions among other foreigners on this matter. For reference in this article, I am a Canadian who is currently "here" in New Zealand.

In New Zealand, new music CDs are usually $25 to $35 at retail outlets. In contrast, I recall newly released CDs to typically be $15 in Canadian retail outlets, however special orders, low-stock older releases, and obscure finds could rise to over $20. Mind you, someone recently complained that prices are now $20 in HMV, but if my memory serves me correctly, HMV was always more expensive than other outlets. Since I've been away from Canada for a few years, I checked Megatunes (which doesn't represent all of Canada) and it appears that new releases are still as low as $15 and ranging to $20.

Well, I have some theories and thoughts on this; that's the kind of guy I am.

For starters, let's look at population differences and manufacturing costs. I'm going to group Canada with the USA (giving a population of about 350 million) and New Zealand with Australia (totalling to about 26 million). I'm also going to assume that manufacturing costs for CDs are higher "down under". So I'm off to a good start here... making assumptions and grouping "rivalling" nations together, ha ha. Having done that, it's obviously possible that New Zealand and Australia need higher CD prices to turn a profit - they have a smaller consumer base that will buy CDs, and they have manufacturing costs that are similar, if not higher, than in North America.

I was reading this discussion thread where it was suggested that CDs are not more expensive "down under", and that it may simply be a difference in exchange rates. It's also suggested that the higher prices are due to shipping. But what about local/national artists? Their CDs are just as expensive as international artists' are. Also, I don't believe that CDs are shipped overseas - I'm pretty sure that international record labels make licencing agreements with "down under" record labels, enabling the latter to manufacture CDs for retail. An example: I purchased In Field & Town from Hayden when he performed in Wellington last year; his CD was manufactured by Spunk Records in Australia, yet he was charging $25 to $30 (sorry I can't recall the exact price). Regarding exchange rates, I've seen the rate between New Zealand and Canada fluctuate as much as 0.3, and CD prices certainly haven't fluctuated in either country. I think that exchange rates and shipping aren't really factors - unless the ongoing rate was set by CDs that were once shipped "down under"...

Then there's the momentum of the ongoing rate - existing CDs are that price, so new releases must also be that price. Raising the price might result in less sales, and probably no record labels or artists want less CD sales - that would be anti-promotional. On the other hand, lowering the price for a new release might devalue it or somehow associate it with lesser quality. I wonder if North American entities would like to raise the prices of their CDs but feel they cannot, or maybe "down under" groups want to lower theirs? It's possible that people want to shift their prices but the momentum of the ongoing rate has the final say.

I've considered that New Zealand CD distributors, record manufacturers, or artists may want more money per unit than similar groups would in North America. On one hand, that's silly - everyone everywhere wants more money! However, perhaps North America sees a CD more as a promotional item than New Zealand does. It's possible, and I'm speculating - but I have met a fair number of music artists in Canada that sell their CDs between $10 and $20 at shows because they want to get the music "out there". I've met a fair number of artists in New Zealand that sell their CDs for $20 to $30 at shows.

Perhaps everything is just more expensive in New Zealand! Live shows are much more money here. So are CD's. So are meals. Beer is a bit more. Clothing and footwear... definitely much more expensive here. I find the real cost of living to be high in New Zealand, possibly higher than in Canada. The difference in cost of CDs (and these other consumables) may be proportionate to the difference in average wages or incomes in both countries. However, I recall the real cost of living in Australia to be much lower... maybe Australian prices have been the model for New Zealand prices!? Maybe the USA has set the bar for prices in Canada? I dunno.

I took a look at Google Insights and it appears that, for 2009 in all four countries, "free music" is the number one music related search. Actually that's not true, in Australia it appears they are more interested in "the music" (possibly for an Aussie music website), while "free music" is runner up. But these stats seem to indicate that people generally want to pay less-to-nothing for music; maybe with lower CD prices they would be more keen to pay? Maybe not - but that's a different discussion.

I've mostly avoided these higher prices in New Zealand; I've found it quite rewarding to purchase music from online outlets in Canada. I get more for my money! In one instance last year I made a bulk purchase of 6 CDs from Maple Music; with shipping to New Zealand it cost me about the same as buying 4 CDs locally (mind you the exchange rate was good then). Just the other week I made my very first digital music purchase, something that I've in the past been resistant to. It's definitely cheaper than buying a physical CD, and with Zunior you have the option of purchasing albums in FLAC format; compared to MP3 format the file size is larger and the audio quality is identical to the quality of the CD (which I can say is near impossible with MP3, but let's not get into mathematics). Plus, Zunior appears to offer PDF files containing complete album artwork.

Don't get me wrong, I prefer to have the physical CD, but these days and in my situation, I think I can slide into some FLAC and PDF files from Zunior for a while.