The move is Amazon's way to coerce the company into agreeing to its modified terms. It is presumed that Amazon wanted a larger share of the movie sale profits.
Similar with the tactics used against Hachette, a book publisher, and Warner Bros., a film studio, Amazon is now blocking preorders of Disney's hit movie "Captain America: The Winter Soldier." Other titles that are affected include "Million Dollar Arm," "Muppets Most Wanted," and "Maleficent." However, the digital versions of the movies can still be pre-ordered through Amazon Instant Video. Perhaps there are separate terms for a movie's digital distribution and physical copies.
Analysts say that Disney may be less concerned about the issue. After all, DVDs occupy only a small portion of its total revenue. However, box-office sales may not be impressive every time. In order to extend earning profits, movie studios would turn to sales of DVD and Blu-ray versions.
In the U.S., one third of the market is occupied by sales of home entertainment copies that are delivered over the Internet. According to research HIS Corp, there has been a four percent increase in online purchases as compared to the figures earned in 2004. Most customers would usually turn to popular sites such as Amazon and Apple's online stores.
"They are squeezing studios on DVD pricing, understandable given their market position," said analyst Michael Pachter of Wedbush Securities. "Disney can't cut them off, and Amazon can cut Disney off, so I would say Amazon has the leverage."
"I'd say the companies are about as evenly matched as they get, but Amazon may have more leverage as the distributor because it can wait things out longer than Disney," said entertainment and media analyst Tuna Amobi of S&P Capital IQ.
Amazon's recent bout with media companies have strengthened during the past few months as the company tries to deal with the pressure from investors on reducing losses. The company has at least resolved its dispute with Time Warner Inc's Warner Bros. On the other hand, its dispute with French publisher Hachette Book Group appeared to be escalating.
In the dispute, Amazon was seeking a higher profit and market share at the expense of bookstores, authors, and Hachette. CEO Michael Pietsche of Hachette called on Amazon to restore the books of Hachette authors to normal levels of availability.
Customers can still pre-order the Disney titles from other sites such as those run by Wal-Mart and Barnes & Noble. Amazon promises to notify customers once the discs become available.
