Originally Posted by stonetools
BN has to jump through a number of hoops to get back to profitability, but it can be done.
Now its clear that contrary to popular relief, that it wasn't the legacy B&M stores dragging down NOOK, but NOOK was in itself a loss center.
Whats thecase is that some aspects of its B&M operations lost money as well as made moneyand that some aspects of the NOOK business lost money and made money too.
On BN's to-do list:
1. Gradually close its unprofitable B&M stores.
2. Leverage its advantage with college stores.
3.Outsource hardware development to Microsoft.
4. Grow and diversify NOOK digital sales. Use the NOOK brand to move out from ebooks into other digital media- games, movies, etc.
5. Limit as best as possible losses in the coming price war with Amazon.
6. Develop its partnership with Microsoft ( who want to get into B&M stores and hardware sales). Have mini Microsoft Stores in BN stores, have a BN branded Microsoft tablet, etc.
None of this will be easy or some of it won't work, but BN can make it. All they need is a big chunk of luck and a big pair of balls
1. In the analyst call, B&N committed to closing 10 more retail stores (net).
2. It is leveraging the college division (which, unlike the retail stores, did not manke any money but, unlike the Nook division, at least did lose truckloads) ... by rolling the college division into NewCo, the 82-18 B&N/MS company.
3. B&N has made no announcements about future hardware; the Windows 8 deal is strictly a deal to put a Nook app on Windows 8 devices and for NewCo to run the backend store. Interestingly, while the Nook Glow was mentioned on the call, the Nook Tablet was not. So much for that being a hit and internally admired.
4. You could grow the Nook platform beyond ebooks but it would help to operate on devices beyond the Nook Tablet. As an app, Overdrive for libraries is able to managed ebooks and media ....
5. I don't think the losses vs. Amazon are about content. On the analyst call, they praised the agency model which was generating "average" 30% of content sales as "profit" (aka commission). The losses have to do with selling hardware at a serious loss in places like Best Buy and Target (B&N keeps much less after BB gets its cut).
6. A spokesperson with Microsoft, when the deal was announced a few weeks ago, was asked this question on Bloomberg and MS stated it had no particular interest in putting its products in B&N stores.