The Disney, Amazon feud


Price isn’t the only issue keeping “Maleficent” and “Captain America” off of Inc. AMZN +0.48% ‘s virtual shelves.

Walt Disney Co.’s dispute with the giant online retailer also encompasses promotion and product placement on the Amazon website, as well as questions over who makes up the difference when Amazon loses money to match the prices of competitors, said a person with knowledge of the matter.

Here’s what’s at the core of the disagreement:

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.

  • fuchsdh

    This is what I don’t understand about Amazon. Why should you expect the people whose product you are willingly selling at a loss to subsidize you? What benefit is moving all that product if you don’t make any money doing it?

  • jtr3

    Considering all the brick-and-mortar businesses Amazon has put under, seems like a little taste of their own medicine.

    • imthedude

      Exactly. This is so true. They want you to window shop stores, and buy from them because they have a lower price. Then when it happens to them, Bezos cries he wants someone to make up the price difference. Lame.

  • Dorv

    I like Amazon as much as the next Amazon-Prime-Subscribing-guy, but they’re wrong here. This is one of the few pitfalls of their business model compared to brick and mortar stores. They’re still coming out ahead.

  • The core of the disagreement can also be called IRONY.

    What they’re complaining the brick and mortar stores are doing is what Amazon does with books.

  • Larry Davis

    So when Amazon sells at a loss, that’s ok. But when Walmart does, it’s not? And when people go to Walmart and showroom, that’s ok for Amazon too.

    Basically Amazon is an entitled child.

  • Anthony Visceglia

    Amazon is a juggernaut, but I think we’re finally starting to see some very real kinks in the armor. The market souring on Amazon has seemed to force the company to try and flex its muscle. I’m not saying they are on the verge of collapse or anything, but if these negative PR incidents keep piling up, Amazon might find itself in a far less commanding position.

  • So Disney wants to control placement on their site? That seems odd.

    • I’m withholding judgement on Amazon’s hypocrisy/etc until we get official words. “Those familiar with the matter” doesn’t always pan out properly [see statements against Apple being wrong often].

    • matthewmaurice

      Not really. Vendors bargain for placement in B&M stores all the time.

      • lucascott

        yep. When I was at Borders as a merchandising manager I was often called out if our end caps were not the right product because they paid for that placement. So if I was told to put up a Marvel display it was a Marvel display and if the select titles were sold out I better make sure at the least what was swapped in was also Marvel and not some other company

  • “Amazon often tries to match those prices, but doesn’t reap the benefits of drawing customers into a physical showroom.”

    Odd. I am far, far more likely to buy a DVD or Blu-Ray and add things at Amazon than at Walmart.

    • I guess they are finding that users in the low margin “media” section of the Amazon store aren’t venturing into high margin sections before making their purchase. But isn’t that the hole point of shopping online. Get in and get out with only the stuff you wanted without having to deal with the shopper psychology maze that was created inside the physical retail store.

  • Oh boo hoo! Amazon doesn’t like when others do to it what they do to others!


  • Jim McPherson

    I find Amazon claiming that they don’t benefit from loss leaders to be positively laughable.

  • Terry Maraccini

    Amazon, the WalMart of the Wires.

  • SDR97

    At this point, Amazon is every bit as evil as Google is. Letting my Prime membership (what a scam THAT is, by the way) lapse — I’m hoping that will pull me away from their seductive lure. I doubt there are many products they sell that can’t be found as cheaply elsewhere.

  • marcintosh

    If Amazon has a problem with losing money on their loss leaders then then can just stop underselling everyone. Why the hell should suppliers charge less to make Amazon happy? Unreal.

  • matthewmaurice

    This really exemplifies the chinks in Amazon’s armor, which ironically are exacerbated by its entire raison d’être. Digitalized Society is exactly right, the whole point was “[g]et in and get out with only the stuff you wanted without having to deal with the shopper psychology maze that was created inside the physical retail store.” It couldn’t happen to a nicer guy than Jeff Bezos. I don’t know why Disney doesn’t just say “Screw it! We’re going to do our own store.” And make the only place you can buy Disney media online I hear their biggest shareholder has some second-hand experience with this kind of thing. I’m not saying she could do it herself, but I’m pretty sure she could tell the guys at Disney where to find a bunch of people who know exactly how to do it.

  • lucascott

    oh the irony. Amazon basically did this with ebooks to kill other systems like Nook and Kobo. The $9.99 price point was cost or even under, which Amazon could afford to do cause they had all the paper books, music, movies, sports gear etc to offset losses. But Borders, Barnes and Noble etc didn’t have those fall backs and yet had to price the same or lose sales and the possibility of getting additional online sales etc.

    Now Amazon is feeling a similar burn.

    That said this is the one time when wholesale pricing is a good thing. I have a product, you want to sell it. So I say okay you can have 1000 units at $10 each. And sell it for whatever you want. If you price it at $8.00 that’s not my business. And not my choice.

    You want me to sign a deal that you will pay me $10 but if you have to sell it at $8 I will give you back $2 then it’s my right to tell you to piss off. And I hope Disney does. It’s time for these companies to stop pandering to Amazon and their games. They want to violate contracts on paper titles cause of ebook contract talks, sue them for violating the contract (they would sue if it was the publisher doing it) and move on. I’m sure Barnes and Noble etc would love to the exclusive retailers for all Hachette titles.