Amazon.com, Inc. (NASDAQ:AMZN), the world’s largest online retailer intensified the pressure on its vendors by blocking the pre-orders of some of the popular Disney movies such as Captain America: The Winter Soldier and Maleficent among others.
Consumers were unable to place their pre-orders for these titles on disc , but the digital copies of some of these movies were still available for pre-orders.
Observers in the industry suggested that Amazon.com, Inc. (NASDAQ:AMZN) practiced the same strategy when it started its dispute with Hachette, the fourth largest book publisher in the United States and movie studio, Warner Brothers.
Michael Pachter, an analyst at Wedbush Securities commented, “They are squeezing studios on DVD pricing, understandable given their market position. “Disney can’t cut them off, and Amazon can cut Disney off, so I would say Amazon has the leverage.”
Amazon.com, Inc. (NASDAQ:AMZN) stopped the pre-orders for the Warner Bothers’ DVD during its contract negotiations with the movie studio. Both parties were able to reach an agreement, but the e-commerce giant hasn’t resolved its disagreement with Hachette.
Authors United, placed a two-page advertisement on the New York Times criticizing the action of the e-commerce giant for blocking the pre-orders for books written by Hachette authors.
In response, Amazon Books team published a blog on its website arguing that e-commerce giant is demanding a cheaper price for e-books since it cannot be resold as used books. The Books team said. “E-books can and should be less expensive.”
In addition, the Books team of Amazon.com, Inc. (NASDAQ:AMZN) emphasized. “Hachette has already been caught illegally colluding with its competitors to raise e-book prices. So far those parties have paid $166 million in penalties and restitution. Colluding with its competitors to raise prices wasn’t only illegal; it was also highly disrespectful to Hachette’s readers.”
Furthermore, the Books team said,” If we want a healthy reading culture, we have to work hard to be sure books actually are competitive against these other media types, and a big part of that is working hard to make books less expensive.”
Hachette CEO Michael Pietch answered an e-mail from a reader and explained that the disagreement started because Amazon.com, Inc. (NASDAQ:AMZN) is demanding more profit and market share at the expense of authors.
According to Pietch, “Both Hachette and Amazon are big businesses and neither should claim a monopoly on enlightenment, but we do believe in a book industry where talent is respected and choice continues to be offered to the reading public.” He also urged the e-commerce giant to withdraw the ban against Hachette authors and “restore their books to normal levels of availability.”