Amazon stops taking pre-orders for Disney movies

Guardians-of-the-Galaxy-poster-21Amazon’s been busy lately. Folks might remember that Amazon stopped taking pre-orders for Warner DVD/Blu-ray titles for a while, including The LEGO Movie, during a contract dispute similar to the contract negotiation it is undergoing with Hachette. (Unlike Hachette’s, said dispute was resolved in a matter of weeks.)

Well, now it’s Disney’s turn to face the Wrath of ‘Zon. Home Media Magazine reports that forthcoming Walt Disney Studios Home Entertainment titles, including Captain America: The Winter Soldier, Maleficent, and Guardians of the Galaxy, have seen their pre-order buttons removed, replaced with “Sign up to be notified when this item becomes available” buttons.

It remains to be seen whether this dispute can be resolved as quickly as Warner’s. Amazon seems to be quite the busy little bee lately; at a guess, not everyone is happy about whatever new contract terms it is imposing. It also remains to be seen how many other major studios will have their pre-order buttons pulled, and we’ll probably never know how many agreed to Amazon’s terms right away.

Amazon’s taking a bit of a risk here, making some of the biggest movies of the year unavailable for pre-order. A lot more people seem to care about movies than books these days, and it runs the risk of angering the consumers who up to now have been largely on Amazon’s side in the Hachette dispute. Perhaps this shows just how crucial it is for Amazon to improve its profit margins and start appeasing shareholders. They’re not playing around anymore.

7 Comments on Amazon stops taking pre-orders for Disney movies

  1. Hmmm. I wonder if Amazon is complaining that DVD prices are too high and that consumers shouldn’t have to pay more than $6.99 for any movie. After all, it has cost the studios very little to put it out on DVD and virtually nothing if they allow digital downloading. That’s what Amazon says about ebooks, and digital is digital, so I am assuming Amazon is making this fight for the movie consumer and not for Amazon. Amazon is my best friend; it and its many fans tell me so daily in the Hachette dispute, so I assume I will be told so here too.

    Or do you really think it might be about Amazon’s profits (or lack thereof but the need to start making some steady profits) and the consumers and artists be damned?

  2. Obvious error in sentence 2.

    “Folks might remember that Disney stopped taking pre-orders for Warner DVD/Blu-ray titles for a while, …”

    Didn’t know Disney took orders for Warner titles? :) :)

  3. I think this “Folks might remember that Disney stopped taking pre-orders for Warner DVD/Blu-ray titles for a while, ” is an error. Didn’t you mean Amazon and not Disney?
    Anyway, good to see Amazon is as annihilistic as Hamas.

    While both companies have a similar market cap, Disney’s P/E is a normal 20 while Amazon is a bubble bursting 832.
    Disney made $6.6B profits while Amazon made $0.27B LOL.
    Maybe it’s time to short Amazon.

  4. Yeah, yeah, I made a funny typo. Fixed it.

    And Rich, even Amazon’s insistence that e-books should be cheaper is fundamentally about profits when you get right down to it. Amazon’s been giving up much of its own margin on the most popular and best-selling e-books in order to bring them down to prices that will make consumers buy into their platforms. It’s clearly tired of that, and now wants the publishers to set their suggested retail prices that low so it can have that price that sells the most units overall and keep a 30% margin from it. Small wonder Amazon would be happy to keep 30% of a $9.99 sale instead of 50%; it was previously losing most or all of its margin (or even losing money altogether) on such sales.

    I suspect the deal Amazon is offering is something akin to what it offers self-publishers: favorable margins in the $2.99 to $9.99 price range, and less favorable margins at higher prices (so that it can discount them considerably and still make money).

  5. Amazon needs to keep its price low to preserve market share, but no one else cares.
    The business model is kaput.

  6. Ah, look for Amazon fanboys to start demonizing Disney now like they have Hachette. Chris has mentioned what may be one of their party lines, that Amazon wants DVD prices to be lower and is clashing with those greedy movie moguls. Yes, there is Amazon, always looking out for the consumer. Soon we’ll be hearing that Jeff Bezos, having forsaken the world of material illusion altogether, has entered a monastery.

    Keep in mind a critical difference between Amazon and publishers or movie-makers. Apart from a few of Amazon’s own devices such as the Kindle HD, Amazon has essentially no investment in the products it sells. Digital books take up a tiny bit of space in huge server farms. DVDs sit on warehouse shelves and can easily be returned for a refund.

    Even if Amazon tweaks the detail page for what’s likely to be a hot-selling new book or movie DVD, its investment is likely to be no more than a few hundred dollars. And much of this fuss with Buy buttons being removed may be over Amazon’s demand that it be compensated perhaps a thousand-fold over for those tweaks.

    Amazon, having made no significant investment in creating a particular book or movie, looks at the market quite differently from those who have invested large sums in a specific book or movies and are taking great risks. Amazon cares not whether any particular book or movie sells, because it has essentially no costs from that book or movie to recover. What it cares for are greater sales en masse, and for that it intends to crush publishers and movie-makers, driving prices so low—to increase those en masse sales—that the resulting depressed market threatens the latter’s ability to publish or make anything but the very safest of investments. That’s what Hachette and others are complaining about. It’s what Amazon fanboys don’t understand.

    Here are specifics. Disney may have spent $100 million dollars to create a movie. Amazon, using boilerplate scripts and marketing copy from Disney, might spent $100 creating the webpage that sells the movie’s DVD. Disney needs to price that DVD high enough and sell enough copies to recoup its $100 million investment before it makes a penny of profit. Amazon only needs to sell perhaps a few hundred copies to recoup its minuscule, risk-free investment. That, incidentally, is why Amazon can be so cavalier about yanking those pre-order Buy buttons, while publishers and movie makers cannot. Like the typical bully, Amazon is exploiting its strengths and their weaknesses.

    And no, I am not fan of Disney like I am no fan of Hachette, less so in fact. A few years ago someone who’d worked for Disney told me a chilling tale of the draconian non-disclosure agreement Disney requires all employees to sign. He/she wasn’t brave enough to tell me what was being concealed, but it takes no genius to realize what the owner of giant amusement parks that attract children by the tens of millions might want to conceal. And the very fact that I couldn’t come up with well-known incidents confirmed that worry.

    So no, I don’t worship at the altar of Disney. I don’t even like the company, in part because it lurks behind the absurd copyright extension of the late 1990s. Disney, I have no doubt, is run by greedy SOBs, however good those Pixar-made films.

    I just happen to believe that if giants, who may or may not be jerks, can be bullied, then the rest of us aren’t safe. And that calls to mind a remark attributed to Martin Neimoller, an anti-Nazi Lutheran pastor, made about 1930s Germany:

    First they came for the Socialists, and I did not speak out—
    Because I was not a Socialist.
    Then they came for the Trade Unionists, and I did not speak out—
    Because I was not a Trade Unionist.
    Then they came for the Jews, and I did not speak out—
    Because I was not a Jew.
    Then they came for me—and there was no one left to speak for me.

    And no, the parallel isn’t exact. Politicians who burn books aren’t the equivalent of those who yank pre-order buttons from books, but the spirit is the same. It’s those who believe in an “ein” or “one” anything. For Nazism that was “Ein volk, ein Reich, ein Fuhrer”—one people, one nation, one leader in much the same sense that Tolkien expresses about the One Ring in The Lord of the Rings:

    One Ring to rule them all, One Ring to find them,
    One Ring to bring them all and in the darkness bind them.

    And for Amazon, it is ein Einzelhandler—one retailer, with the power to dictate prices and availability rather than accept what their creators have chosen. The essence of fascism is that concept of a collective will embodied in a few. In Europe, it’s characteristic of the radical left and right. In the U.S., where there was never a landed aristocracy, it’s just characteristic of the radical left. Every so often a large business will adopt that as a mindset it thinks ever-so-clever.

    It’s only the fools who think that, because that concentration of power may mean that they can get this ebook or that DVD a little cheaper that it is a “good thing.” It isn’t. Concentrated power is always wrong, particularly when those who have that power have demonstrated a desire to abuse it.

    What does in these imbibers of power is what the Greeks wrote about and Tolkien so brilliantly describes in The Lord of the Rings—hubris or extreme pride that leads to self-destruction. Too late, Sauron realized that those reports of a small band wandering about Mordor meant that his foes intended to destroy the One Ring. Being evil and obsessed with power, he could not even conceive that they would do such a thing.

    And too late, Amazon will discover that individually bullying Hachette here and Disney there may seem a clever move but collectively, it’ll bring about its destruction.

    There’s an old adage about not picking a fight with someone who buys ink by the barrel. It’s equally true that it’s foolish to try to bully someone who regularly lunches with the news media executives in NYC. Do that, and you start getting bad press.

  7. I think that Walmart is very happy right now. They do the exact same thing that Amazon does in negotiating deals with companies but the press has moved on from vilifying Walmart and moved onto Amazon.

    This is part of the modern world, there is more openness about negotiations and the back and forth between companies.

    Disney needs to be careful that they do not end up in the same position that the big 5 dinosaurs are in now. If you do not develop your own distribution channels you are doomed to bow to the likes of Amazon who do have the channels.

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