Amazon scores its first victory against Warner Bros — its customers better hope it doesn’t win the war
In battles with media companies, Amazon has proven that its most powerful weapon are its own customers.
The Wall Street Journal reports that the company will once again allow consumers to pre-order Warner Bros. films like “300: Rise of an Empire” as its dispute with the media company comes to a close. Amazon had withheld these titles as a negotiating tactic to receive better terms.
It makes sense for Warner Bros. to capitulate to Amazon’s demands. Its goal is to get its films into as many living rooms as possible, and making them available for pre-order through the Amazon marketplace is an important step in realizing that goal. But giving Amazon whatever it wanted to sell a few more DVDs also means that Warner Bros. has proven that the company can use its customers to bully other companies into making new deals without consequence.
That’s a dangerous lesson for Amazon to learn. Amazon says it values consumer happiness above all else, but it might have been better for consumers if the company’s willingness to sacrifice their happiness was punished instead of rewarded, especially because its strategy required it to sacrifice access to summer blockbusters, as the New York Times wrote:
The confrontations indicate that Amazon’s long-stated desire to sell everything to everybody might be taking a back seat. The biggest book release in the middle of June is the new J. K. Rowling novel from Hachette; the biggest movie is “Lego.” Amazon is basically telling its customers to go elsewhere for them, which is a very un-Amazon thing to do.
Amazon couldn’t maintain that position for long. If it truly wishes to become the everything store — and now, with the Fire Phone, the everywhere store — it can’t keep large releases like the “LEGO Movie” from consumers by making it unavailable for pre-order or keeping it from important lists like upcoming “Kids & Family” movies. The company might be willing to tell people to shop elsewhere for a while, but eventually it would have had to soften its stance.
Hachette Book Group, another company embroiled in a dispute with Amazon, seems to understand this. Its books haven’t just been forced into obscurity or had their pre-order buttons removed like Warner Bros. films — they have also seen their shipping times increased, had their releases delayed, and the discount on their prices reduced while their publisher attempts to negotiate with Amazon, which is reportedly asking to be paid for adding pre-order buttons or adding a book to its shoppers’ personalized recommendations.
Yet Hachette hasn’t given Amazon what it wants. It has stood firm even while Warner Bros. has rewarded Amazon’s anti-consumer behavior by giving it whatever it wanted just so its films could be pre-ordered once again. (And let’s be honest, how many people seem likely to pre-order the new “300″ movie now that it’s available?)
The company shouldn’t be rewarded for using its customers to get what it wants — especially when there seems to be little upside for those customers when the negotiations have ended. As I wrote when Amazon’s dispute with Hachette was first revealed, the company has abandoned the principles it has trumpeted whenever it was criticized in the past for amassing too much influence over publishers, filmmakers, and anyone else who sells goods through its website:
Amazon didn’t take over the publishing industry by force. It was given the keys to the kingdom by consumers and authors who thought it would make life easier for them. Now that it’s doing battle with Hachette, Amazon has forgotten its promises so it can turn its loyal customers into weapons that will probably force Hachette to surrender this fight. Like other companies before it, Amazon is demonstrating the technology industry’s commitment to money over ideology.
Now it seems that Amazon’s commitment to consumer happiness, which is what allowed the company to become so large in the first place, can be forgotten whenever it wants to turn those loyal customers into a captive army against whomever it happens to be fighting that day.
At least when I wrote that there was a chance Amazon’s captive army might lose. Now that Warner Bros. has surrendered to the company’s demands, however, it seems unlikely that it will renew its focus on consumer happiness and demilitarize its customer base in the near future. Amazon has won this battle, and now its customers will have to hope that it doesn’t end up winning the war, lest they be forced into service before finally abandoning the company.