Tuesday, August 12, 2014

Negotiations

This is not really Crisis-driven as such, although it is an unexpected combination of two recent posts:

Amazon is in a dispute  - or negotiations, hard to tell the difference sometimes - with Disney over the pricing of DVDs Blu-rays physical copies of movies for home use. Like Hatchette, some Disney-sourced products -- pre-orders of Captain America: The Winter Soldier being specifically mentioned - are not currently being offered for sale. Unlike Hatchette, Disney is a household name that Amazon is not going to be able to sneak under the radar. (Coincidentally, Hatchette recently purchased former Disney publishing house Hyperion.)

Also unusually, the article includes the following sentence:
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.
Usually, when "Amazon" and "warehouse" and "brick-and-mortar" are in a sentence, it's to note that a brick-and-mortar store is being treated as an Amazon showroom. This often includes a note about the costs of having a physical location, which Amazon doesn't have to deal with. In this case, however, the advantage of an actual store is touted - and, indeed, Amazon is trying to get something like preferential treatment to allow for it. While it isn't exactly like slowing down your customers because you don't like the deal you gave them any more, it's also not exactly a "let the market decide"tactic.

And while it's not clear how much it has to do with the Crisis, it's also mentioned that Amazon may be using these hardball tactics because it's under pressure from its stockholders. Evidently the stock dropped after the most recent earnings were released with a larger-than-expected loss. There are times it seems like Amazon is still living in the dot-com Third Turning, and is only now realizing the Crisis has arrived.

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