Terms of Amazon dispute with Disney seem oddly familiar
August 12, 2014 | 6:16 am
A 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.)