If you’re reading this opinion piece, you’re likely on a computer of some kind (yes, a smartphone is a computer) with internet access. Since you are, and if you have the time, please go to Amazon.com and place “DVDs” in the search bar. It’s apparent that FTC Chairman Lina Khan hasn’t.
Were she to, the search results would perhaps be illuminating. As readers know, in the early days of Amazon it was a locale for online book buyers. Then in 1998, Amazon added CDs and DVDs. This was a big deal at the time for Amazon users. One guesses that since online shopping was still relatively novel, Amazon likely enjoyed market share for online sales of CDs and DVDs that well exceeded 50%. And what a market it was!
As Melina Delkic recently reported in the New York Times, as recently as 2009 88 percent of American households owned a DVD player. Delkic notes that as of 2021, that number had fallen to 56 percent. And it’s evident that within that 56 percent, the vast majority of DVD-player owners no longer use a once-revered technology that Sony, Samsung et al formerly sold tens of millions of per year.
How do we know that the 56 percent household penetration obscures a dead market? It can be found in the fact that Best Buy will be discontinuing DVD and Blue Ray sales after the holiday season, that Netflix ended DVD delivery in September, and most of all it can be found on Amazon. To visit the “Everything Store” is to see very little in the way of DVDs or DVD players on sale.
This all rates prominent mention as a reminder that what we call a “market” is by its very name an incredibly fluid concept. FTC Chair Khan is attacking Amazon for its 38 percent share of the online sales market, but which market? What Amazon is selling and how it’s selling it is ever changing. CDs and DVDs were plainly once a big source of Amazon sales, but now they’re not. Amazon’s market share in the CD/DVD space is, if it still exists, a percentage of next to nothing. Shouldn’t Khan go after the business that took some massive market share not just from Amazon, but also Best Buy, Netflix, Sony, Samsung, and others formerly prominent? It sounds like a good case for the FTC and Khan, but it would amount to the agency and its head taking progress to court. Amazon’s evolution shows why.
According to a recent report in the Wall Street Journal, Amazon has begun delivering prescription drugs by drone in College Station, TX. Other than delivery by drone in remote parts of Africa desperate for medicine, this form of delivery is for now – yes – somewhat novel. UPS aims to be a player in it, so do Zipline and Wing, but the market for this kind of delivery brings new meaning to youthful. Will it work? One can hope. Quick access to medical supplies is a big deal. The main thing is that neither Amazon, nor UPS, nor Wing and Zipline know for certain if delivery-by-drone is a market. Most speculations reveal themselves as the proverbial expensive, and rather dry hole.
Of course, assuming Amazon et al turn out to be on to something with delivery-by-drone, rest assured that they’ll soon enough have lots of company in the way that Amazon once had lots of company in the CD and DVD-delivery space. Which is the point. Markets as we know them are yet again a fluid notion. Where there was once gold in DVDs, there isn’t now.
What will be profitable in the future? Amazon and others are spending lots of money to find out. They are because the makeup of today’s online-sales market that has the FTC fearful is not representative of what will be. A visit to Amazon.com would reveal this truth to Khan. Amazon doesn't take markets, rather it creates them. Khan is taking the past to court.