Amazon takes on Disney in DVD pricing fight
Amazon.com Inc. is taking on Walt Disney Co. and its superheroes in its quest to gain more control over pricing online.
Amazon blocked pre-orders of Disney’s hit summer movie “Captain America: The Winter Soldier” and other titles in disk form, repeating a tactic used in recent disputes with book publisher Hachette and film studio Warner Bros.
The move signals that Amazon, the world’s largest Web retailer, is increasingly willing to keep certain items from consumers to put pressure on its vendors. It also spotlights the extent of Amazon’s clout in the home-entertainment market. Studios count on sales of DVD and Blu-ray versions of their movies to help deliver profits because few films reach profitability in theaters.
“They are squeezing studios on DVD pricing, understandable given their market position,” said Michael Pachter, an analyst at Wedbush Securities. “Disney can’t cut them off, and Amazon can cut Disney off, so I would say Amazon has the leverage.”
Amazon’s clashes with media companies have intensified in recent months as the Seattle company, under pressure from investors to reduce losses, uses its heft during negotiations. Although Amazon’s dispute with Time Warner Inc.’s Warner Bros. got resolved, its spat with French publisher Hachette Book Group is escalating.
Home Media Magazine reported the disappearance of the pre-order option for some Disney DVDs, including “Muppets Most Wanted” and “Million Dollar Arm,” last week. When Amazon removed pre-orders for Warner Bros. titles from mid-May to late June, it was the first time that it used the tactic during negotiations with a movie studio, Home Media Magazine said.
Paul Roeder, a spokesman for Burbank-based Disney, declined to comment. Amazon didn’t return calls seeking comment.