Tomahawk, WI 08/12/2014 (Basicsmedia) – Amazon.com, Inc. (NASDAQ:AMZN) has blocked pre-orders for upcoming The Walt Disney Company (NYSE:DIS) Films as it continues to seek more control over pricing of DVD’s online. Amazon has in the recent past been trying to get a clear foothold of DVD pricing, having sorted a similar tussle with Warner bros a few months ago, according to Wedbush Securities’, Michael Pachter, in an interview on Bloomberg.
Amazon.com, Inc. (NASDAQ:AMZN) had thought it would also have a clear ride with Disney in sorting the issue just as it did with Warner. Disney, on the other hand, has remained firm and is hearing none of Amazon suggestions on the matter.
“Pre-orders have increasingly being used online; they don’t drive traffic; they just capture more share for the online retailer, in this case Amazon. Amazon is looking to get a price break we think on DVD’s in all the studios. They started with Warner they are now moving on to Disney. It looks like they might have gotten a concession from Warner brothers. I think Disney is not budging, so Amazon.com, Inc. (NASDAQ:AMZN) is fighting back by saying ‘fine your new movies aren’t going to show off as pre-orders on our site,” said Mr. Pachter
If the standoff is not sorted out before the release of the upcoming movies, Disney looks set to suffer as a result of reduced sales due to the sale of fewer DVD’s in aggregate. Pachter maintains that the ongoing standoff is essentially a win for Amazon as Disney will have to come to a compromise if its DVD’s are to be carried by the giant online store
Bloomberg’s Paul Sweeney expects Disney and Amazon to come to a consensus agreement despite the fact that the DVD business for Disney is not as lucrative as it used to be, in the past.
“[…] It’s a business for Amazon, but you know it’s really interesting from the Disney perspective because you know the Physical DVD business isn’t nearly what it used to be. It has declined over the last 10 years but it is still a meaningful business for the Hollywood studios. But the bigger part of their home theater business, home entertainment business, is Digital. […] It is still an important business, it’s an important business for Disney. They probably going to negotiate pretty aggressively here, but I think at the end of the day; they will come to an agreement with Amazon.com, Inc. (NASDAQ:AMZN),” said Mr. Sweeney.