The End of the Nook?

Barnes & Noble (BN) and Microsoft (MS) have announced that BN is buy MS’ share of Nook Media LLC for approximately $125 million.  Although MS is loosing about $175 million on this 2-year investment, it will no longer have to pump $7 million per month into Nook to keep it going.

Obviously the eReader and the related digital media content are not money makers for BN.

Once MS is out of the picture BN will be able to spin-off this losing segment into a separate business. If this spin-off follows typical spin-offs, this new business will be saddled with so much debt that its long-term prospects for survival are dismal to say the least.

This news raises a number of questions that only time can answer.

Will anyone buy a Nook during this holiday shopping season? Would you if you thought the company was going out of business?

Likewise, will anyone buy eBooks as gifts?

Will anyone continue to purchase eBooks from BN, or will the exodus begin, especially since Amazon currently has some good deals on certain Kindle models?

What will happen to eBooks that have already been purchased by current Nook owners? Will they still be available on BN’s website? Can they be moved to a new eReader such as Amazon’s or Kobo’s?

Along with Sony’s earlier decision to leave the North American eReader market, it looks like Amazon has finally won the eReader wars.

 

B&N Unveils New Nook

Barnes and Noble has unveiled a new Nook tablet – the Samsung Galaxy Tab 4. This is the first Nook not produced by Barnes and Noble.

This new Nook tablet contains a 7 inch display as the prior versions.

What sets it apart from the prior Nook tablets is the features that it includes, although other tablets and smart phones have had these features for years.

  • Front and Rear cameras
  • Multi-window mode to use two apps at once.
  • GPS
  • Dual speakers

It comes with 8 GB of internal memory that may be extended by adding up to a 32 GB micro-SD card.

B&N is charging $179 for the device. Shipping is free.

As an incentive to purchase the Galaxy Tab 4, Barnes &  Noble will give you over $200 of bestselling books, magazines, and TV shows absolutely FREE.

Barnes & Noble: What Now?

Liberty Media owned 17 percent of Barnes & Noble (B&N). It recently sold 90 percent of its holdings, representing 15 percent of the outstanding B&N stock. This sale caused B&N’s stock value to decline 13 percent.

Will Liberty’s action free B&N for more opportunities or is it the death knell for B&N?

Read this CNBC blog post by John Jannarone for more information.

Are small eBook sellers fighting a losing battle?

Jeremy Greenfield at Digital Book World has analyzed the data from a November survey and states that 86% of eBook buyers “buy ebooks from only one retailer, most likely Kindle, iBooks and Nook…”. Not surprisingly, owners of Kindles tend to buy eBooks from Amazon while Nook owners tend to buy from Barnes & Noble.

What does this mean for the small and/or independent sellers?

As Mr. Greenfield stated “The smaller ebook retailers have an uphill battle to fight when it comes to not only attracting new readers but keeping old ones.”

Part of the problem is that Amazon and Barnes & Noble make it extremely easy to purchase eBooks and have them delivered to the reader. Purchasing an eBook from a different retailer requires the purchaser to take an extra few steps to move the book to the device. While not difficult, it is still less convenient.

Perhaps the small and/or independent sellers should concentrate on the mobile app marketplace and skip eReaders altogether?

Will the Nook Survive? Will Barnes & Noble Survive?

This article by Thad McIlroy presents the argument that making a financial guy without retail experience the CEO of Barnes and Noble is tantamount to placing a For Sale sign on all or part of the the company!

Another article, this one by Peter Smith at ITWorld, gives the grim facts that sales of Nook devices and Nook accessories is down drastically from the prior year. B&N blames the downturn on the fact that there were no new Nook devices for the holiday buying season; ignoring the fact that B&N decided not to release any devices. Mr. Smith wonders how long the Nook can survive.

Taken together these articles suggest that current Nook owners should be adding Kindle devices to their wish list for Christmas 2014.