The book business launched Amazon to success, and now it’s hurting the online retailer’s growth.
Amazon announced its worst quarterly loss in 14 years Thursday, losing $437 million in three months. One of its worst-performing segments? Amazon’s old core business: North American book, movie and music sales. The segment’s sales increased a mere 4.8% from 2013, the slowest growth for the category in more than five years. That compares with a 17.8% growth in that segment a year ago.
Amazon chalked up the slow media segment growth to fewer students buying textbooks, but that doesn’t seem to be the whole story. In fact, the company’s woes may in part be related to its damaging publicity spat with the publisher Hachette.
Here’s a quick recap of what happened: earlier this year, Amazon demanded Hachette give up a larger cut of its book sales; Hachette demurred. Amazon then increased shipping times on…
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