- Daily Zen
There is no denying Amazon’s historical and present behavior has not only raised eyebrows but also created a certain imbalance in the market. Latest in the pile of claims against its “monopsony” behavior comes as Amazon has stopped accepting pre-orders of forthcoming Disney titles.
Amazon has used the very same strategy; it has utilized before in its four-month inflated spat with Hachette Book Group over pricing of eBooks, where it suspended pre-orders for physical copies, prolonged delivery or reduced discounts over the titles.
”Amazon has demonstrated that they’re not going to be the one to blink in these negotiations,” said Sucharita Mulpuru, a Forrester Research analyst.
Currently Amazon is under pressure to improve its profitability after a below par second quarter, despite rise in sales. During the second quarter, Amazon posted a posted a bigger-than-expected $126m (£74m) loss, in spite of a 23% rise in its revenue. The company has expected losses of up to $810 in the upcoming quarter.
Despite the fact that sites, such as Barnes & Noble Inc. and Wal-Mart Stores are still accepting pre-orders of Disney titles, Amazon customers are told they will be notified once those titles become available.
Amazon has turned into an inexorably essential outlet for book distributers and movie distributors as Tower Records, Virgin Megastores and Borders have now shut down. Other remaining retailers mostly offer latest titles in their stores.
Amazon.com halted the preorder titles of Walt Disney hit movie “Captain America: The Winter Soldier”, “Maleficent” and few more titles, replaying a strategy utilized during the feud with distributer Hachette and Warner Bros.
Amazon’s conflicts with media organizations have escalated in the previous months as the online retailer tries to utilize its dominance as a part of businesses from books to home feature to request better terms from its sellers. While the question with Time’s Warner Bros. is getting determined, the spat with French distributer Hachette Book Group is raising.
By constraining pre-orders of upcoming titles, Amazon can restrain sales, influence best-sellers list and send clients looking somewhere else. Some online retailers tried to benefit from the spat, offering discounted Hachette titles during summer.
The feud with Hachette escalated through the weekend when Amazon approached its consumers and independently published writers to write directly to Hachette Chief Executive Michael Pietsch.
“E-books can and should be less expensive,” Amazon said in a letter it posted to a new website, readersunited.com, early Saturday. “Hachette spent three months stonewalling and only grudgingly began to even acknowledge our concerns when we took action to reduce sales of their titles.”
Hachette has opposed Amazon’s calls to set most eBooks cost at $9.99, instead of $12.99 or $14.99. Amazon, which controls more than 60% of the digital book market, has said that the lower costs would drive more deals and build Hachette’s and other distributers’ income.
Hachette on Sunday said Amazon is motivated by profits and market share in the contentious contract talks. “Amazon is seeking a lot more profit and even more market share at the expense of authors, bricks and mortar bookstores, and ourselves,” Mr. Pietsch said. “We call on Amazon to withdraw the sanctions.”
Hachette’s letter came after a gathering of around 900 authors a month ago marked a request which ran as an advertisement over two pages Sunday in the New York Times—challenging Amazon’s strategies. The appeal, which urged readers to write to Amazon CEO Jeff Bezos, was marked by some well-known authors, including Stephen King, Paul Auster and Jennifer Egan.
The Hachette and Disney standoffs “should be a golden opportunity for retailers to take back market share from Amazon they have lost,” said Forrester’s Ms. Mulpuru.
Disney and Amazon declined to comment on the issue.