Price War

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German Regulators Must Stop Amazon From Cornering Book Market

Amazon distribution warehouse in Leipzig, Germany Source DPA-CHANGED
Amazon needs more than slick distribution.
  • Why it matters

    Why it matters

    The pricing power Amazon wields over the world’s book publishers will have huge economic and cultural implications.

  • Facts

    Facts

    • Amazon has been accused of delaying book shipments from publishers with whom it has a pricing conflict.
    • German publishers have asked antitrust regulators to intervene and restrain Amazon.
    • If Amazon is able to determine pricing and profits, entire national publishing industries could be threatened.
  • Audio

    Audio

  • Pdf

Nobody takes on Mickey Mouse. 

Unless he is named Jeff Bezos. The founder and chief executive of Amazon, the world’s largest online retailer, feels strong enough to battle Disney and the company’s worldwide empire of television broadcasters, films, theme parks and products. Mr. Bezos is blocking advance orders for Disney’s popular and profitable DVDs and Blu-ray discs such as “Maleficent.”

Mr. Bezos is putting pressure on the Hollywood entertainment giant by hindering or delaying the sale of its products. Mr. Bezos is hitting at a sensitive spot, because the marketing of products for home consumption constitutes the film and TV industry’s backbone. A creative destroyer, Mr. Bezos is attempting nothing less than to break Hollywood.

With sales of $75 billion last year, Mr. Bezos has built an online industry leader. But the Amazon chief executive needs greater discounts from product producers to increase his company’s meager return on sales and, finally, to satisfy his disappointed shareholders.

For this reason, he’s taking on the book sector. The 50-year-old is demanding higher discounts from publishers of electronic books. After his joust with French publisher Hachette in the United States, he is seeking a duel with the Swedish publishing group Bonnier, which is represented in Germany by such publishing houses as Piper, Ullstein, Carlsen, Berlin-Verlag and Thienemann.

 

amazon Mickey Mouse DPA
Amazon has allegedly delayed sales of some Walt Disney Co. products. Source: DPA

 

The controversy has implications extending far past Bonnier. The conflict’s outcome will determine the future of publishers and authors. If Mr. Bezos is successful in extracting above-average profit margins from electronic books, authors and publishers will get even less money.

That would have not only economic, but cultural consequences. Amazon’s battle for larger profits would mostly penalize young and unknown writers. The result could be a media wasteland.

 

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