Terms of Amazon dispute with Disney seem oddly familiar

disneypicturesA Wall Street Journal article (if it’s paywalled, Google the headline to read it) delves into the sources of the pre-order blocking matter between Amazon and Disney…and if you could summarize it with a single phrase, it would be “the shoe’s on the other foot.” It has some commonalities with the Hachette dispute, but some important differences, too.

According to the familiar “person with knowledge of the matter” (he sure gets around, doesn’t he?) the dispute partly concerns promotion and product placement on Amazon’s web site (the element it has in common with the Hachette negotiation, given some of the leaks have claimed Amazon’s dispute with Hachette was at least partly motivated by fees for such things). But the other part of it seems…oddly familiar.

A particular concern of Amazon, those people noted, is that Wal-Mart Stores Inc., Best Buy Co., and other brick-and-mortar retailers sometimes charge less than the wholesale price for a new disc to lure people into stores so that they will purchase other, more profitable items. Amazon often tries to match those prices, but doesn’t reap the benefits of drawing customers into a physical showroom.

As a result, the online retailer has asked studios to help make up for losses in those situations, the people said.

So, basically, Amazon is asking Disney to compensate it for the times other companies use its products as loss leaders. This seems like an an odd request for retail—Disney doesn’t have any control over how other retailers price its products, after all. But then, the publishers didn’t exactly have any control over what Amazon priced their e-books and Apple wasn’t happy about that either, and that didn’t prevent them from trying to gain that control by hook or crook.

The article doesn’t say whether Amazon likewise plans to ask the movie studios to band together and require Wal-Mart and Best Buy to sell their movies at a set minimum price to protect the movies’ perceived value.

Though on a related note, the article does mention a contract dispute Disney has been having with Redbox over how long it can wait to rent Disney movies before they go on sale. (We’ve covered the disputes various movie studios have had with Redbox before.)

About Chris Meadows (4156 Articles)
TeleRead Editor Chris Meadows has been writing for us--except for a brief interruption--since 2006. Son of two librarians, he has worked on a third-party help line for Best Buy and holds degrees in computer science and communications. He clearly personifies TeleRead's motto: "For geeks who love books--and book-lovers who love gadgets." Chris lives in Indianapolis and is active in the gamer community.

1 Comment on Terms of Amazon dispute with Disney seem oddly familiar

  1. Entitlement is perhaps the best word to describe Amazon’s attitude here.

    Any time it has the advantage, well that’s just life. But any time it is at an disadvantage, as with Walmart’s loss-leaders, then someone else must pay to correct that alleged unfairness. Someone being anyone but Amazon. I’ve compared Amazon to geeks unable to understand the perspective of others. Here Amazon seems to be acting more like a spoiled child.

    Interestingly, Walmart seems aware of one advantage of physical stores. It may be harder to get someone to come inside, but once there, they’re more likely to look around and perhaps pick up other items. Online at Amazon, it’s quite easy to jump to Youtube and watch kitten-in-a-bag videos instead. Except when someone needs just a bit larger purchase to get free shipping, Amazon visitors have no real reason to browse.

    Odd as it sounds. I’m actually beginning to feel a bit sorry for Amazon. They’re obviously in over their head. First, there is Hachette, which doesn’t seem to be folding up like Amazon had planned. Now there’s this dispute with Disney. And I’m not sure what the court terms are, but Amazon may find itself negotiating with a second major publisher while their contract with Hachette is still up in the air.

    Then I come to my senses and decide, “No, Amazon brought all these troubles on itself.”

    One additional remark. Book publishers are rarely hurt by controversy. Publicity may even help sales. That’s emphatically not true of retailers. It’s no accident that retailers flee controversy like vampires flee crucifixes. It rarely brings in new customers but it does drive them away. Amazon may want to look like it’s fighting for lower prices, but to most of the public it simply looks like a corporate squabble over how profits are split.

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