Barnes & Noble revenue falls sharply...

[PatNY]

Originally Posted by fjtorres

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.

Or at least fire the product manager and get new people in to run that division. Something is wrong when Microsoft owns a part of you, yet you don't even offer one of its biggest mobile apps, OneNote, in your store. The OneNote app is in Google Play. It's in the Apple store. So there is no good reason I can think of why it isn't in the B&N store -- except for ineptitude and ignorance. There are gazillions of dedicated OneNote users out there. I am one of them, and will not buy any device that I can't easily have that app on.

It's sad. As a consumer I love the B&N retail stores. Always have. But they may go the way of the dinosaur pretty soon. And shooting themselves in the foot with their locked down Nook tablets which otherwise have wonderful hardware didn't help.

--Pat

[usuallee]

Originally Posted by HarryT

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

Yep, and also, if B&N keeps going down the tubes like this, those who have invested in Nook books may want to familiarize themselves with the apprentice's "tools" ...

[WillysJeepMan]

Originally Posted by fjtorres

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.

I agree with your assessment.

I'd add that B&N also failed to properly leverage their B&M stores. They started out well, offering eCoupons to nook owners and free ereading on site. But they could've done so much more to offer value to consumers who purchased nook devices.

B&N earned (well deserved IMO) kudos from the techies when the nook color was released for the inclusion of a microSD card slot, and their light touch on locking the NC down. They received plenty of good will and sales of the nook color (pre-kindle fire) were impressive for a "dedicated" device. In hindsight I wonder whether it (light lockdown) was more of technical incompetence rather than a deliberate technical design decision.

I was hoping that they would've released a generation of nook color that offered a B&N UI color ereader mode by default but had the option for selecting "advanced mode" that would enable a standard Android UI. They've gone in the opposite direction.

I don't think that it is too late for them. Amazon had doubled-down on the lockdown of the Kindle Fire line, and it is the right decision for them at this time, but B&N could take a contrarian approach to differentiate itself.

Although B&N never had the best prices on anything they sold, I always found visiting the store to be a pleasant experience. I would buy from them rather than from somewhere else online to support a local business and for the instant gratification of walking in, finding a gem of an esoteric foreign film on DVD, and returning home to watch it. Unfortunately, there weren't enough who agreed with me and the local B&N closed nearly 2 years ago.

[fjtorres]

Originally Posted by 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.

Apple did just that, even though it annoyed the heck out of iPad3 buyers.

[fjtorres]

Originally Posted by WillysJeepMan

Amazon had doubled-down on the lockdown of the Kindle Fire line, and it is the right decision for them at this time, but B&N could take a contrarian approach to differentiate itself.
(

Amazon's lock-down isn't much of a lockdown, you know; the setting to enable sideloading of apps is readily available in the settings. They simply ship the Fire with the setting at "no", the same way as most phones.

Think of it as a "social" lockdown; they don't promote the feature but it is there for anybody who wants it. All you have to do is scan the settings page.

As for the contrarian approach, well Kobo is doing that with the Arc.

Note that it was only after Amazon launched its appstore and captured a significant share of Android app revenue (their store is open to all comers, phone and tablet) that Google revamped and started actively licensing its store. Amazon's store went from nothing to a threat to Google in mere months, even before the Fire launched.

The big difference between the Amazon appstore and the B&N store is the B&N store only serves B&N hardware whereas Amazon's store serves anybody and everybody willing to give them money. That right there puts them way ahead in software developers priorities.

As I said above: each product needs justify itself separately rather than relying on other parts of the business, which is how Amazon, Apple, and even Google do. B&N relies too much on the stores to move Nook and on the hardware lockdown too much to move the content.

If the content is good enough, it'll move without lockdown, on other people's hardware as well as yours.

[cassidym]

Similar article about B&N and the Nook in today's NY Times http://mediadecoder.blogs.nytimes.co...ef=todayspaper

[fjtorres]

Originally Posted by cassidym

Similar article about B&N and the Nook in today's NY Times http://mediadecoder.blogs.nytimes.co...ef=todayspaper

Ouch!

In a note to clients, S&P Capital IQ said, “We think this portends greater market share losses for the Nook over the medium term” and downgraded its recommendation on Barnes & Noble stock from hold to sell. Barclays said in a note that the Nook’s precipitous decline was “quite concerning” and “below even our modest expectations.”

Even cheerleader Shatzkin sees big trouble:

“They are not selling the devices, they are not selling books and traffic is down,” said Mike Shatzkin, the founder and chief executive of Idea Logical, a consultant to publishers. “I’m looking for an optimistic sign and not seeing one. It is concerning.”

One bit of interesting news in there:

The declining retail numbers were also troubling when viewed in the context of a rise in sales among independent booksellers. The American Booksellers Association, which has not yet released official holiday sales, estimated Thursday that its members’ sales would be up about 8 percent over last year.

It seems that, for a change, Indies are eating B&N's lunch.
That suggests yet another problem for B&N: that the format changes and Nook emphasis in the bookstores might be driving B&M pbook buyers elsewhere.

[fjtorres]

Hmm, Shatzkin thinks B&N might have converted too many B&M customers to digital and pushed others away...
http://www.idealog.com/blog/bn-resul...-of-the-blame/

Since the results were announced this morning, I had a conversation with a journalist who pointed out that the indies (anecdotally) seem to be reporting a very good Christmas. Why would the indies be up and B&N be down, this person wondered?

Thinking about that yields one piece of anecdata, one bit of conjecture (offered in yesterday’s forecast post), and one newly recalled (and somewhat frightening) insight.

The anecdata is that a Big Six CEO told me a couple of months ago that a very major book being published by that house (certainly one of the ten most anticipated releases of 2012) was not primarily promoted at B&N because they couldn’t get the bandwidth and cooperation on the B&N side to put something together. So the book was instead primarily launched through Walmart.

The conjecture in the last post was that the independents were more focused on selling printed books than B&N was. Indies are selling Kobo readers, but I’ll bet not one of them is devoting the prime sales space and portion of the paid staff to them that B&N does to the NOOKs. They’re focused on selling books, not devices, so they’re merchandising them better.

And the insight is that B&N has converted much of its store traffic to an online customer base because of their success at selling NOOKs. Those people may not be coming back, except virtually. These results may be the evidence of that.

It's an idea, I suppose.
Not sure about it, myself, though.

[robertc88]

Originally Posted by 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.

The latter has not happened, therefore the need to unlock device to outside apps.
I would buy the nook hd if that was available.

[SteveEisenberg]

Originally Posted by PatNY

Or at least fire the product manager and get new people in to run that division.

So not only you are going to fire this product manager, but also a bunch of people under him or her? And that's the least of what you are going to do? What's the most? Fire the people under them?

Being involved in what were likely group decisions that didn't go well should not be a firing offense. Besides the questionable morality, no one with a choice will want to work there.

Armchair quarterbacking is fine, but I draw the line at proposals to fire the coach, much less his assistants.

P.S. I know that B&N management has already fired a lot of blameless people by closing stores. Let's just not egg them on.

[jocampo]

Originally Posted by fjtorres

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.

Disagree.

Lock model has worked for other companies.

They sell books, no hardware.

Their problem is bad service, haven't expand ebook business international, prices not competitive.

Open the UI won't make them sell more ebooks if their titles are more expensive then Amazon.

But I do agree when you say that they their ecosystem is poor. And after several years, no signs of important improvement has been made. If you're locked into one, at least give a strong one to your customer.

[PatNY]

Originally Posted by SteveEisenberg

So not only you are going to fire this product manager, but also a bunch of people under him or her? And that's the least of what you are going to do? What's the most? Fire the people under them?

Being involved in what were likely group decisions that didn't go well should not be a firing offense. Besides the questionable morality, no one with a choice will want to work there.

Armchair quarterbacking is fine, but I draw the line at proposals to fire the coach, much less his assistants.

P.S. I know that B&N management has already fired a lot of blameless people by closing stores. Let's just not egg them on.

Yes -- Anyone responsible for making primary decisions regarding their app store, the tablet design (external) as well as the closed nature of the OS should be let go or, perhaps, reassigned. The most? I think fjtorres mentioned a few options, but one of them was simply ending their tablet operations, in which case a whole lot more people would be out of work than those primarily responsible for the product.

I'm not sure why anyone would want to keep people on who are directly responsible for a product which failed.

And your sports analogy is puzzling too. In baseball, for example, it is common to fire some combination of the GM, manager, and coaches when a team constantly loses. And that's the right move. Not doing so after enough losing only perpetuates the failures.

--Pat

[AnemicOak]

Originally Posted by jocampo

Disagree.

Lock model has worked for other companies.

They sell books, no hardware.

Their problem is bad service, haven't expand ebook business international, prices not competitive.

Open the UI won't make them sell more ebooks if their titles are more expensive then Amazon.

I agree with what you say their main problems are.

But at the same time they don't even have the potential to sell those higher priced ebooks if people aren't buying their hardware because every one elses hardware is more open.

[SteveEisenberg]

Originally Posted by PatNY

In baseball, for example, it is common to fire some combination of the GM, manager, and coaches when a team constantly loses.

Yep. Even if the payroll is below-average. Or even when they consistently win half the games.

Did I say I'm not a sports fan?

[PatNY]

Originally Posted by SteveEisenberg

Yep. Even if the payroll is below-average. Or even when they consistently win half the games.

It depends. Each situation is different. Even if a payroll is below average, a certain degree of on-field success can be expected, depending upon other factors such as the competitiveness of the other teams in the division. And if a team consistently wins only about half its games, yet consistently has one of the higher payrolls, then I think it's time for heads to roll.

Did I say I'm not a sports fan?

I didn't say you did. But you certainly didn't sound like one. I live in NY. You should hear all the calls on sports talk radio for heads to roll when our local teams don't win!

--Pat