19 May 2006

I Need Some Help With Economics

One thing that has been less-than-easy to adjust to about living in the UK is that pretty much everything is more expensive. The only real exceptions to this rule are: beer and food from the grocery store. VAT is 17.5% on everything, and for many items there's not quite as large a competitive market to drive prices down, so it makes sense to me that things are more expensive. And, of course, right now the dollar is so goods in dollars are cheap. I get this.

We don't worry about this too much since, A) we have free health care, and B) for the past year we haven't spent money on anything at all (after rent, council tax and food, the money's all gone). With the future prospect of settling down here, and especially with the future prospect of two incomes, we've been looking around at some things we need to buy, e.g. house, car, clothes, stereo, hot tub. Basically, all of these thing are looking very expensive to us (well, especially the house).

But I'm not posting to whine. I'm actually hoping someone can explain the following to me....As some of you may know, Rebecca and I are big fans of watching good TV on DVD, and we are huge fans of Six Feet Under. The series ended this past summer, so all 5 seasons are now available on DVD. Here's the price comparison (using Amazon in both cases)

  • US
    Seasons 1 - 4 as a package: $359.99
    Season 5, standalone: $63.96
    TOTAL = $423.95
  • UK
    Seasons 1 – 5 complete: £111.99 (~$205)
This, I do not get. Can someone explain?

Next: It turns out I have a bailiwick, who'd've thunk it


Ruth said...

While you're shopping, don't forget the dog bed...

(by the by, I gave up trying to figure out Amazon prices when I discovered that I could order a book on Amazon to be shipped to the UK from VA for less than having the exact same book from the exact same seller shipped to me in VA. Got that?)

john kenneth galbraith said...

Suppy and demand. Marginal manufacturing cost for DVDs approaches zero. HBO has interests in maintaining monopoly pricing in the U.S., both to maximize profit and to sustain demand for its cable channels. Demand in the U.K. is insufficient to command HBO's normal premium. Nonetheless, it is still profitable to sell at U.K. prices, so they do.

Sam said...

Thanks, JKG. It's extremely kind of you to help me out. And I especially appreciate your taking the time to post on my blog, since you recently died.

And you're right, of course. It should have been obvious to me: you cannot get HBO here, so selling DVD's will not in any way undercut subscriptions to HBO.