As the world’s largest book seller and online merchant, Amazon is never afraid to flex its muscles with regard to its suppliers. So, this question comes into play: Is Amazon acting as an advocate for lower consumer prices (as the retailer claims) OR is Amazon an unrestrained bully trying to increase its margins at the expense of its content providers (as critics claim)?
WHAT IS YOUR CONCLUSION?
For several months, Amazon has been battling with publisher Hachette. Consider this observation in Catey Hill’s report for MarketWatch:
“Amazon and book behemoth Hachette — along with some publishers’ groups and writers — are at one another’s throats, in a fight that’s escalated just within the past week. Amazon, which accounts for about 60% of the digital-book market, wants to use its market power to get Hachette to lower E-book prices, while Hachette says that this is ‘punitive,’ hurts authors and bookstores, and doesn’t take into account the costs — like royalties, marketing and expenses — that go into creating books. Hachette also notes that 80% of its books are already selling online for $9.99 or less, which is the price at which Amazon hopes to sell many of its E-books. For its part, Amazon has used its leverage against Hachette by delaying shipping and stopping pre-orders on some Hachette books.”
Now, Amazon has also decided to do battle with the Walt Disney Co., another behemoth content provider. Consider this observation in Greg Bensinger’s report for the Wall Street Journal:
“When Amazon.com Inc. wants to fight, it turns to a familiar playbook. The latest to feel the Seattle retailer’s sting is Walt Disney Co. Amazon isn’t accepting pre-orders of forthcoming Disney DVD and Blu-ray titles including Captain America: The Winter Soldier and Maleficent. As Amazon continues its well-publicized battle with Hachette over E-book costs, it has now engaged in a battle with Disney. It is the same tactic Amazon has employed in a bitter four-month spat with Hachette Book Group over E-book pricing. To press its point, Amazon suspended pre-orders for physical copies of many Hachette titles and lengthened shipping times or pared discounts for others. The tactics underscore Amazon’s unusual sway in E-commerce, where it is by far the dominant player, particularly for books and media.”
Click the image to see a Wall Street Journal video on this battle.
Photo by Associated Press