Boston, MA 08/11/2014 (wallstreetpr) – Amazon.com, Inc. (NASDAQ:AMZN) now enters a dispute with Walt Disney Co. like the row with Hachette Book Group on pre-order booking price. The retailer refuses to accept the pre-order of Disney’s forthcoming products Disney DVD and Blu-ray including “Captain America: The Winter Soldier” and “Maleficent.”.
But, other sites run by Barnes & Noble Inc. and Wal-Mart Stores Inc. offer the pre-orders of the discs that mean Amazon is opening the market for its competitors that will further aggravate its sales pressure.
Hachette spat – A costly affair
Amazon.com, Inc. (NASDAQ:AMZN) fought with Hachette for four months on e-book pricing and suspended the pre-order of physical copies and delayed the shipping process and allowed discount for others.
As per the argument, Hachette wants the e-book price at $12.99 or $14.99 instead of Amazon’s usual price quote of $9.99 for an e-book. According to Amazon, e-books are usually less expensive than the physical one that not only drive more sales but also attract more customers. At the same time, it increases the publisher’s as well as author’s revenue.
Hachette, on the other end, said that Amazon is looking for profit and gain in market share at the expense of authors and publishers. The quoted price does not include the associated costs as most of the Hachette’s e-book prices are at $9.99.
The dispute with Hachette further intensified when more than 900 authors signed a petition and opposed the tactics of Amazon.
Dual impact – Media and Book
Amazon.com, Inc. (NASDAQ:AMZN) becomes a leader in the e-commerce business as it offers platform for both books and media as other distributors such as Tower Records, Virgin Megastores and Borders shut down their operation.
So, the dispute related to pre-orders with Hachette and Disney will affect the retailer’s sales and provide wrong message to the customers. The price war will affect the Company’s performance as it mostly derives revenue from books and media and controls more than 60% total e-book markets. It creates negative reputation among the authors, publishers and customers.
Amazon already witnessed an operating loss of $810 million despite 23% growth in revenue during 2Q2014.