Fly, Little Nook! Fly!

by wjw on June 27, 2014

Barnes & Noble has decided to split off its Nook division, which includes its profitable B&N College bookstores in universities around the country.

Apparently the Nook is losing market share to Kindle and iPad.  (My own ebook sales through the Nook store are roughly 10% of my total, FWIW.)  The division is also losing money, though I can’t imagine why.  It’s not as if they’re renting a lot of retail space or anything.

B&N’s brick-and-mortar stores are somewhat more profitable than they have been, apparently because they’ve surrendered a lot of floor space to toys and whatever.  Toys have a bigger profit margin.

Forgive me here, but it seems to me that the whole announcement is just a gimmick to boost B&N stock.  The brick-and-mortar stores and the Nook aren’t any more or less valuable than they were yesterday, it’s just that the stock has gone up (a mere five percent or so).

What this tells me is that B&N is looking for someone to either buy the Nook division or the retail stores, or both, and figures the sale would be more likely if the two divisions were split.  (An attempt to get Microsoft to buy the Nook failed a couple years ago.)

And what this tells me is that B&N’s board is more concerned with stock gimmicks than developing an actual vision for the company.  They’re flailing around selling toys and boosting their stock price in hopes of seeming more attractive to someone who will rescue them from themselves, and that’s because they have no clue and are desperate for rescue.

So okay, it’s another victory for Amazon.  (“You will be assimilated!”)  They’ve got their biggest domestic rival staggering around the ring, out on their feet, and without an idea in their head.

Though on the slightly brighter side, B&N is reporting that they’re selling a bunch of Hachette books.  Since Amazon continues to punch themselves in the face in their quarrel with Hachette, people who want to read books by JK Rowling or James Patterson or James S.A. Corey or Walter Jon Williams are going to have to buy them somewhere else, and apparently Barnes & Noble is only too happy to oblige.

So go make Barnes & Noble happy!  Buy something from them already!

{ 7 comments… read them below or add one }

TRX June 27, 2014 at 11:36 am

B&N’s problem is mostly that they don’t carry the kind of books people want to read. At least, nothing *I* want to read, and judging from their perennial financial woes, I’m not alone.

The one I went to a few times had lots of cookbooks, travel books, NYT best-sellers, and bargain bins. The genre shelves were maybe 80% romance, 10% horror, 5% mystery, 1% SF, and 4% everything else. A single lonely rack of stale computer books. Videos. Games. And a lot of tchochkis and a coffee shop. Other than the stale computer books and remainder bin, nothing was more than a few months old.

Sorry, that’s the same election EVERY OTHER STORE has, from Hastings to Wal-Mart to independent bookstores. They can’t compete on price, they’re not even bothering to compete on selection, and they don’t offer any reason to deal with stumping through their mega-store when I can get the same schlock almost anywhere else.

Any particular copy of a title is fungible; a copy of “Knight Moves” is the same wherever I buy it. But the titles themselves are not fungible; if I’m looking for “Walter Jon Williams,” “Danielle Steele” is not equivalent.

Brian Renninger June 27, 2014 at 1:38 pm

Yes, what used to be attractive about the mega-stores was increased selection. And, the selection just isn’t there.

I just bought VotW, Wolf Time, and Video on my Kindle because: 1) it was easier than trying to get the books from storage with my soon-to-be ex-wife; and 2) I know neither B&N nor the local used book store carries much WJW. Even newer WJW books are pretty hit and miss at the stores I have easy access to. Sooo, while I wish it were different and WJW books were widespread everywhere, Amazon e-book is the way to go. It doesn’t hurt too, that I have the impression that the authors get a bigger cut on the e-book. Instant access to and a feeling of greater support to the author I like is a hard combo to beat.

Amazon is hurting themselves in that current tactics are hurting the impression that Amazon supports authors. If that instant access becomes questionable, then one of Amazon’s main strength starts to teeter.

So,

mearsk June 27, 2014 at 2:35 pm

I, for one, did buy Cibola Burn through the B&N online bookstore because of the whole Amazon vs Hachette battle.

TRX June 30, 2014 at 10:31 am

Wait. I thought ebooks were kicking paper butt, and B&N’s storefronts weren’t doing to well anyway?

The Nook is a whole ecosystem, just like the Kindle and i-thing, and it’s an established brand. Spinning the Nook off as a separate corporate entity doesn’t make sense… unless this is going to be one of those setups where the same execs are on both boards, and they’re asset-stripping B&N before riding off on the Nook horse.

John Appel June 30, 2014 at 11:49 pm

I don’t believe e-books are actually kicking paper’s butt, though they are doing very well. It is, however, true that the B&N brick & mortar stores are on shaky ground. And the Nook hardware platform itself is not, to my knowledge, profitable.

Brian Renninger July 1, 2014 at 2:21 am

Thing is, it is also not clear if Amazon (or more specifically Kindle) is profitable either.

wjw July 1, 2014 at 4:12 am

B&N had its assets stripped a while back. Hundreds of millions of dollars ended up in the pockets of . . . well, they can afford a libel suit and I can’t, right?

Yes, Kindles are sold below cost, with Amazon making it up in ebook sales. I imagine the Nook is sold the same way. Apple can’t afford to sell iPads below cost, so you pay for for those (or for the mystique of the Apple brand, which is not inconsiderable).

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