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Barnes & Noble announced Tuesday that it would stop manufacturing the Nook, its Android-based tablet product, as a part of its fourth-quarter earnings report.
Amazon's Kindle was a hit, and despite more capabilities and an aggressive pricepoint, the Nook was an also-ran. The Nook division took in $768 million in revenue in the past year, a decrease of 36 percent over the year before, and not enough to turn a profit.
The company lost $475 million in the last year on the division. Ouch!
Barnes & Noble Inc. had been pouring money into developing its Nook devices to keep up with changing reading habits and beat back competition from retailers such as Amazon, which makes the popular Kindle readers.
It hasn't worked. According to research firm IDC, Barnes & Noble's tablet shipments fell to 1 million in the fourth quarter, down from 1.4 million a year earlier. At the same time, sales of Kindle e-readers have kept growing.
Many point to the earnings call on Barnes & Noble College.
It's the bright spot in the Barnes & Noble family. Unfortunately, you can't count on that segment to flourish, and I will explain why.
How long do you think it will take before the majority of schools are using tablets instead of books?
The transformation is already beginning.
There should be no question in your mind that digital books cost less. No shipping, distribution, printing, or binding is required, and Barnes & Noble is part of distribution.
The way content is delivered is changing, and the half-life of physical paper books is probably not much more than five years.
Why buy a physical copy of a college book for $125 when you can buy the same text in digital form for $70? I'm sure some will prefer the paper version regardless of cost, but isn't a model you want to invest in.
Do you believe Barnes & Noble is a lost cause?
Do you enjoy going into one and just browsing?
Did you buy a Nook?
If so, what do you think of B & N's latest actions?
Brick and motar stores spur digital purchases by customers spotting books on the shelves they would have never thought of buying before seeing it with their own eyes.
Now will the demise of physical bookstores slow the digital book sales?
What do you think?
I read about the demise of the NOOK earlier this week. I believe part of the problem is a-Amazon offers many more selections at b-better prices. They're better than iTunes. I buy all my music from Amazon.
ReplyDeleteI sincerely hope B&N doesn't close. I love going into their stores and browsing and yes, I do buy books.
Disturbing news....
Words Crafter:
ReplyDeleteYes, it is disturbing news. When in Baton Rouge, I used to love to amble both floors of the B&N and browse.
It is hard for Booksamillion and B&N to survive in an Amazon world.
But Amazon's prices will only stay low as long as there is competition. Once they destroy their competition, the prices will spike. Sigh.
I'd heard the Nook wasn't selling as well anymore. Hopefully the company doesn't go under, as my parents have Nooks and will be very disappointed.
ReplyDeleteIt probably doesn't help that tablets that aren't eReader-designated have risen in sales. And those are the devices schools are purchasing for their students.
I own a Nook. I love my Nook. I didn't want all the bells and whistles. I'd rather not go Kindle, honestly.
ReplyDeleteI don't think B&N is a lost cause. I think they'll manage onward. I hope so. My crit group meets at one.
As a former department manager of B&N, I can say that the Nook was/is not the cause of the company's demise. If anything, Barnes and Noble should have gotten in the e-reader game a LOT earlier. They should have listened to employees, like me, who tried to suggest that B&N launch their own digital music/book downloads, and integrate lower-cost and used merchandise into the physical stores.
ReplyDeleteI had to hear, on a DAILY, if not HOURLY basis, customers complain about our prices. 19.99 for a new CD? 29.99/39.99/49.99/69.99 for a new movie or series?
Membership card sales and Nooks were shoved down employees' throats, to the detriment of customer interaction. The sales focus, instead of customer focus made employees and customers both miserable.
We didn't have a proper music department procedural manual, so I wrote one. I used it to train the managers of other stores.
We were able to email the CEO, but, as I now see, they didn't take our advice :)