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Price Control Scheme on Software

Bernama: Gov’t To Fix Prices If There’s No Cooperation From Industry

The government has no choice but to fix the prices of computer software, compact discs (CDs), video compact discs (VCDs) and digital video compact discs (DVDs) if the industry does not cooperate in determining the price control scheme for these products.

The Domestic Trade and Consumer Affairs Ministry is going to meet with industries this Thursday to discuss price control for these products. Government decided last week to categorise these products as controlled items under Price Control Act 1946.

But what do they mean by “no choice”? I personally don’t understand how they could apply a price control scheme on softwares. It sounds like they’ve never studied the industry before voice out the decision. Just because it plays hard on pirates, then it’s “no choice” to fix the prices?!

Let’s looks at these items that going to put under price control scheme. We’re here talking about products regarding music, movies and computer softwares. They are more or less sort of intellectual products, not just some manufacturing items. And it’s sure the industries would oppose the decision, it cut their profit margin smaller or worse, making lost. On my personal opinion, here’s my though on the feasibility of implementing price control on these items:

• Compact Discs(CDs): This is refer to audio CD (music industry). How much is the cost to produce an album? I have no idea. But price of a CD could go from RM30 to RM50. If that has to be a positive proposal, one might could work out some price rate based on it. The current price range in the market isn’t that big and price control is possible.
• VCD: I always have a doubt on copyrighted VCD, especially on those western movies. Did the big corporates in Hollywood giving out the right to produce VCD? They have the channels to sell and distribute DVD. But VCD? There isn’t many VCD players sold in U.S.. Anyhow, I don’t know how the industry players should define the price of an original copyrighted VCD. But not doubt an affordable price could be worked out. Some of the original VCD is sold at about RM16 on the market. If applying some re-structure on the sale channels, it should be able to drop to a more affordable price.
• DVD: I never knew how much is a copyrighted DVD cost in Malaysia. Check around my friends, none of them ever bought an original DVD. So I could only refer to Amazon. On Amazon, most of the DVDs are sold at US25.00, which is around RM95. On copyrighted DVD, there is a region code embedded into DVD to ensure that DVD could play in certain region. Therefore, could government do put some power on this, taking it to a lower price? RM25.00 looks pretty reasonable to me :-).
• At last, computer software. Unlike previous 3 items, they already have publicly recognized price range and you could base on that to propose a better price scheme, software price is varied. It’s just too general to call it computer software, in that way, the price could go from RM15.00 up to millions ringgit. So, so how are they going to do with software? Categorise it, you said. But there are so many categories. Even if you’ve successfully categorize softwares on the market. You would face the most important question: how to measure it? Complication is the nature of softwares. Every pieces of the software development process is a decision of design (even when you’re coding, you got make a design decision in a few lines of code). And the complication increased when it involved human interaction. There’s just no effective scientific way to measure the effort of a software creation. It doesn’t sound right if you’re going to put a price control scheme on computer software.

I am not saying that software development is creative art but movies/music creation isn’t. For movies, there’s a mature market and VCD/DVD is the side-products. And either CD or VCD/DVD has a recognized stable market price to follow, and you could work on that if some kind of control has to apply on it. To talk of softwares, it is a big category — inside there price is varied, effort can’t be measured in a single way; even though most softwares could be develivered in a CD. It could be workable if government’s intention is to put price control on certain softwares (e.g. Microsoft Windows/Office).

Dinesh has his thought on Software like chicken rice and We just don’t get it !