Barnes & Noble revenue falls sharply...

[PatNY]

Originally Posted by murraypaul

They probably make little or no money on the actual hardware sale.
They are hoping that the hardware sale drives content sales.
If they sold an open device, and people just downloaded the Kindle app and bought books from Amazon instead, that doesn't help them.
Basically they are squeezed between a better ecosystem device in the Fire and a better open device in the Nexus 7. That doesn't leave them much chance.

Yeah, I know that the revenue on hardware would be minimal and that the Nook would serve to mainly drive ebook sales. But what's worse? Selling more Nook tablets and having some not drive ebook sales? Or selling way fewer Nook tablets and not driving ebook sales at all?

The Arc will be an interesting product to watch. They are totally open to android without any hacking. So one can just DL the Kindle app and buy from Amazon as well. But I bet they are figuring that's a small tradeoff to pay for more robust tablet sales and, consequently, Kobo ebook sales.

--Pat

[fjtorres]

I would disagree with the headline.
A more honest headline would be "Overeach is gutting B&N".
Amazon's prices are *higher* than B&N so you can hardly blame *them* for B&N's problems. Going back to the four-hour price war, B&N has been the one pushing the low-price hardware; Amazon merely matches, or more recently, keeps the price in sight.
How often to do you see Amazon trash-talking B&N? Taking pot-shots at Nook? Complaining about Nook exclusives or B&N's pbook subsidiary?
Amazon has mostly ignored B&N and given them all the rope they needed to hang themselves.

B&N is simply overestimating the appeal of its hardware, its ebookstore, it's brand loyalty. Two years now, they have undersold their expectations so it is more likely that the problem is their expectations rather than an overly aggressive competitor.
They simply don't understand the game they're playing.

One thing sticking with me is B&N's statement that sales disappointed after Black Friday.
Well, yes; they had fantastic Black Friday prices. And the Staples sale was sorely tempting. But after prices went back to normal? The tablets were cheaper but locked down and less useful, the eink readers older tech.

From where I'm sitting, it looks like their Black Friday deals cannibalized their december sales: most people who were looking to get a Nook got them on BF (or through the Staples sale). That mostly left the people who *weren't* going to get a Nook at that time, if ever.

Sometimes big sales promote the brand/product to people who wouldn't otherwise buy--sometimes they simply sell it to people who were already set to buy. And if you don't understand your business well enough to know the likelihood of the two, maybe you shouldn't be in that business.

[SeaKing]

Originally Posted by AnemicOak

B&N is basically it (some areas have Books A Million I guess), but B&N seems to be less and less a book store every time I go in (which isn't often).

I have a BAM (Books A Million) about 15 miles away, and a B&N about 50 miles away. You have to go through large town traffic to get to BAM and medium city traffic to get to B&N.

I have a Walmart, CVS, Walgreen's, Rite Aide, Ingles, Bilo and soon a Publix all with small book and magazine sections within 3 miles max, and hardly any traffic. Two traffic lights for the furthest.

Amazon just a few clicks away.

No question what is going to happen.

[AnemicOak]

Originally Posted by SeaKing

Amazon just a few clicks away.

No question what is going to happen.

I hear you. I used to shop B&N (and Borders) all the time, but got tired of hearing they weren't stocking this or that new release, but they could "order it for me". Well I figured I could order it myself and save money to boot. B&N actually drove me into making my first Amazon purchases way back when and that's all she wrote.

[SteveEisenberg]

Originally Posted by fjtorres

Sometimes big sales promote the brand/product to people who wouldn't otherwise buy--sometimes they simply sell it to people who were already set to buy.

First I decide what electronics to buy. Then I wait until the next time Thanksgiving week comes around

I think the fundamental problem is that, apart from luxury goods, stuff you try on, and perishables, it will be increasingly hard for bricks and mortar to compete with on-line. Not just because more people are comfortable on-line, but also because there's more possibility of automating and robotizing order fulfillment warehouses than stores. Competing on price and selection, B&N loses out to Amazon, and competing for the less price sensitive customers, they'll lose out to the stronger and more charming of the independent stores. I suppose it is possible to slowly shrink while remaining profitable. Maybe that is their best case scenario, except that I don't know if it's possible.

[Barbara1955]

Poor Customer Service doent help them Keep customers either!

[GadgetMan]

Originally Posted by slex

BN don't sell e-books worldiwide, whereas Amazon, and even smaller players such as Kobo and BooksOnBoard do. This automatically makes BN's market smaller and I have no idea why they don't sort out this issue (if it's possible for others, it should be possible for them, too).

I agree.. especially since MicroSoft is a part of them.. go figure.. some big wheels are getting paid big money at MicroSoft and are asleep.. WOW.. they need to WAKE UP..
DG

[charmian]

Well, if nothing else, I suppose we can look forward to sales on the hardware.

Makes me wonder though, what is B&N going to do next year with the e-ink readers? Will they refresh the line or just keep the old one?

[fjtorres]

Originally Posted by charmian

Makes me wonder though, what is B&N going to do next year with the e-ink readers? Will they refresh the line or just keep the old one?

They have two problems there: they *need* to get a high res eink panel into a Nook as soon as possible but they *also* need to move their eink introductions to a fall cycle like everybody else in the business. One reason their eink Nooks have underperformed for two years in the holiday season is that they were already "old" and competing with recently released competitors. So if they refresh in the spring to play catchup, they'll again be at a disadvantage in the fall. Yet if they wait till the fall, they'll be giving the competition 6 more months of advantage.
Ideally, they need to do *two* upgrades; one now to catch up with Kobo and Kindle, and one in the fall to match whatever *they* introduce for next xmas. But I doubt Nook Media has the money to do that.

[jocampo]

I actually like Nook Tablet UI (recent one) better than Kindle Fire. But the issue is, their market app is non existent.

Now, I disagree when people say they need to make the tablet more open. B&N makes money selling ebooks. Doing that won't help at all.

What they need is a locked out device but with a strong online store and content.

[HYPE]

As much as I like ebooks, I'm always a little sad when I hear that bookstores and doing worse and worse. A world without paper books... That would be odd. As for B&N itself, though, I don't care. I've never been a fan of them. I liked the Nook ST a lot, but I always hated on the company works.

[dkperez]

I bought a Nook Color. I liked it. Then I started getting daily mails from Amazon for ebooks. And found some for $.99 or $1.99 or maybe $2.99. So, I'd jump to B&N 'cause they'll SURELY be matching the Amazon price...

$8.69 or $5.79 or maybe the book doesn't exist at ALL at B&N...

So, I rooted the NC. It was PAINFUL and took a ridiculous amount of time to ferret out the right stuff, find all the nooks and crannies to get the pieces, and wade through the arcane terminology to get the stuff installed and figure out how it worked... And yeah, I KNOW all the folks at the dev forum are really great people and it's SUPPOSED to be difficult.

This time, I bought a Nexus. I liked the Nook, I liked the Nexus. I just didn't want to have to root another Nook device to have easy access to all the readers and other apps I wanted.

Bottom line for me is if there's an e-book I want, and B&N is less or the same as Amazon, and the price is reasonable (meets the arbitrary $3.99 MAX I set for impulse buys), I get it there. If not, I don't. If the e-book is cheaper at Amazon I get it there and read it on the Nexus with the Kindle reader... Makes no difference to me.

[HarryT]

Originally Posted by dkperez

Bottom line for me is if there's an e-book I want, and B&N is less or the same as Amazon, and the price is reasonable (meets the arbitrary $3.99 MAX I set for impulse buys), I get it there. If not, I don't. If the e-book is cheaper at Amazon I get it there and read it on the Nexus with the Kindle reader... Makes no difference to me.

You could simply convert the Kindle book to ePub format to read on your Nook. Very easy to do.

[fjtorres]

Originally Posted by jocampo

Now, I disagree when people say they need to make the tablet more open. B&N makes money selling ebooks. Doing that won't help at all.

What they need is a locked out device but with a strong online store and content.

They do need to open up.

They are in a seasonal business and they just lost the holiday season big time. They are now going to spend the rest of the year digging out of the hole they made for themselves and try to minimize the losses by getting rid of the unsold hardware. They can try giving them away (like last year) or by selling at a loss. Or, they can open them up and let consumers get full value out of the hardware and make a dent in the inventory.

B&N is simply too obsessed with lock-in for its own good.
Having a cheaper tablet is good. Giving the tablet an sd card slot is very good. Keeping the user from using the tablet for all it can do? One giant "aw-crap" that wipes out the added value of the price and the card slot. Lock-down works for single function devices but for multifunction devices you either meet all customer needs yourself or you get out of the way and let them find the apps themselves.

What they need is a device that meets customer needs at least as well as B&N's needs. Their problem is overreach; the locked the android tablets looking to make money off the apps but they don't have enough apps to justify the lockout.

They are on third *third* generation of android tablets.
First, they pretended the Nook Coor wasn't a tablet, just a color reader.
Then, they called it a tablet and gave it a placeholder app store. After two years there are still tumbleweeds in the aisles of their "store".
The new tablets? Those come with a cumbersome and obscure backdoor to install arbitrary apps "for testing" so their staff clearly knows it is an issue and just as clearly are handcuffed by corporate policy.

So B&N, after two-plus years, is still unable or unwilling to give consumers a robust and useful appstore and are still trying to lock them in to an empty store; they don't make money off the lockdown but they do detract from the devices' value. Nobody wins. (Except maybe Google and Amazon.)

What B&N doesn't seem to grasp is that each product needs to stand on its own and deliver value on its own merits. That satisfying the customer has to come before their own strategic needs. To make money by locking-in customers into the Nook content ecosystem, first they have to sell them the device that locks them in. And if the device doesn't meet customer needs they won't buy into the device or the ecosystem.

We're past the point where Nook gets a free pass as a startup; they've been doing reading devices for four-plus years, android tablets for two-plus years. If they haven't gotten it right yet, when are they?

At this point it is clear they are not going to deliver a competitive app store any time soon. All they can do is open the thing up and let the customers fend for themselves. Or, they can just get out of the tablet business.

Better yet, sell off Nook Media to somebody who won't cripple it and run it into the ground with short-sighted policies.

[jersysman]

I think some of the best advice given on this thread is to have BN move it's release schedule into the fall with everyone else instead of early summer. Even though they kick a tick up in sales when they release their new product, most new ereader sales occur during the holiday buying season. They need to join in on that and trust/hope their product will compete well with the others.