August 12, 2014

Disney Appears To Be Amazon’s Latest Foe

John Hopton for - Your Universe Online

In what looks to be the latest in a series of disputes, Amazon has restricted preorders of some big name Disney movies, including “Captain America: The Winter Soldier,” “Maleficent,” and “Muppets Most Wanted.”

Amazon has recently been involved in some high profile spats with suppliers such as Hachette Book Group, who authors including Stephen King have supported in their fight to keep prices of e-books from falling too low, and Warner Home Video who earlier in the summer saw movies such as “Transcendence,” “The Lego Movie,” and “300: Rise of an Empire” pulled from the online retailer’s site.

Although neither Disney nor Amazon have commented on the halting of preorder options for Disney movies, Reuters points out that the move is likely to be part of another contract disagreement. The restrictions are limited to physical copies with digital versions remaining open to preorder.

Withholding preorder availability is only one tactic Amazon has used in its battle with Hachette, along with other measures such as lengthening shipping times. The action, to which a group of 900 authors called Authors United responded with criticism in a two page ad in the New York Times, is claimed by Amazon to be in support of its campaign to bring lower prices to customers. Amazon also claims that lower prices, particularly for e-books, are actually fairer to authors because ultimately more copies are sold and more profit is made.

As Graham Ruddick of The Telegraph points out, though, fairness to customers and authors is unlikely to be the only motive, and maybe “Amazon is simply using its corporate muscle to try to drive down prices… after posting a loss in its most recent financial results, the company is under growing pressure from investors to deliver improved results.”

Naturally, both Hachette and Amazon are claiming to be defending access to knowledge, the beauty of literature and, in the words of Hachette CEO Michael Pietsch, “enlightenment,” over which he claims nobody should have a monopoly. Meanwhile, Amazon says that “Just as paperbacks did not destroy book culture despite being ten times cheaper, neither will e-books.” But like the Disney clash, in all probability, this goes beyond customer experience and is about powerful companies using their muscle to get the best they can out of various elements of contractual wrangling.

Such behavior is not unusual in big business, but in these particular disputes the interest to the public is greater because of the involvement of household names, and of products which are much loved. What’s more, they are products which are meant to create a fantasy world to which people can retreat, ironically, from the cold realities of life such as corporate contract problems. It is also curious to note how much clout Amazon now has, when it is seen taking on much longer established organizations such as Disney.

The response of studios, record labels and publishers may grow more hostile. As Ruddick points out, traditional retailers with main street stores have been getting some support in terms of exclusive products and promotions which Amazon is not party to, and the effect on Amazon’s current dominance will be interesting to keep an eye on.

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