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Wednesday, June 18, 2014

Do Consumers Care About Amazon's Tactics?

Recent news coverage seems to portray Amazon as a bully for trying to keep readers from J.K. Rowling’s latest novel and The Lego Movie as it negotiates better deals with its publishing and movie distribution partners.

The question is, do consumers really care?

“People selling things seem more aware of Amazon’s action that those buying things,” Joshua Brustein wrote in Bloomberg Business. “Anyone who has shopped online is familiar with inconsistent availability of items at any given time. Even if someone ends up leaving Amazon to buy a book or a movie from a rival website, it won’t necessarily generate hostility toward Amazon.”

Prominent authors have been complaining, but there hasn’t been much of a public outcry. In fact, a survey from YouGov showed there’s been virtually no change in the public perception of Amazon, which remains No. 1 in the American Customers Satisfaction Index.

“Some think that the way for publishers to change this is to beat Amazon at its own game, pulling all their titles and making it clear why they’re doing it,” Brustein wrote. “That would be very likely to grab attention. The outcome of the ensuing standoff would probably come down to which side needs the other more. That seems a risky bet for the publishing industry.”

At the same time, the price of Amazon stock is climbing.

“While it’s hard sometimes to say why Wall Street behaves the way it does, it could be that investors see Amazon’s struggle in terms of its effort to increase its raze-thin profit margin, or similarly, as was posited by David Streitfeld of The New York Times, who initially broke the Amazon-Hachette story, to help finance its many investments in its future business,” wrote Jeremy Greenfield in Forbes. “Or, perhaps investors are ignoring Amazon’s moves in book publishing and focusing on its other businesses.”

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