Amazon's business model in a nutshell Bezos has always wanted to profit by being the only thing between you and the manufacturer. By being that one thing, he gets to beat the shit out of the manufacturer. If there's competition he leverages his market position to destroy the competitor. Me and insomniasexx have had some great discussions about Amazon but I'm not finding them right now.
Thank you for the articles. Follow-up question on this piece in particular. Is this legal? It almost seems like extortion. "Pay our price or we'll disrupt your livelihood."Amazon had been demanding a larger cut of the price of Hachette books it sells; when Hachette balked, Amazon began disrupting the publisher’s sales. Hachette books weren’t banned outright from Amazon’s site, but Amazon began delaying their delivery, raising their prices, and/or steering customers to other publishers.
Sure does, doesn't it? Here's a nasty fact about capitalism: above a certain market cap you get to keep rolling along until things are decided one way or another. Classic example is Aereo. Idea was, you put a whole bunch of antennas up all over NYC. You grab that OTA (free) content and you stream it over the internet. Then you charge people to get at your streams. In other words, you charge people for something you got for free and violate a whole bunch of content distribution deals, sandboxing, etc. Illegal? Mos def. Like, really really illegal? Well, nobody died. Eventually going to get shut down? Oh, for sure. But in the meantime, VCs piled into Aereo 'cuz there was always a chance the Supreme Court wouldn't strike them down (a slim chance, but a chance). So Aereo flaunted the law until they got a cease and desist from the Supreme Court, everyone counted their money and walked away. This is why "gouging" is usually a separate crime: in the amount of time it takes to investigate, indict and prosecute someone for taking advantage of surge demand, the gouger has made his money and stopped. But if you don't have statutes against gouging, you get to gouge until they tell you to stop. So yeah- Amazon was totally extorting Hachette. They were literally making an example of them for the rest of the publishing industry. But nobody was going to do anything in the amount of time it took Amazon to send a message. And they do this. Like all the time.