I think reports of B&N's response are greatly exaggerated, just yet.
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In the most recent quarter, the sales in the digital division were swamped by expenses in the digital division by a margin of 2 to 1 (if memory serves).
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Sure... because B&N had to build its digital business up from zero a few years ago. The upfront investments in R&D will be paid off over time.
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That's all well and good: but B&N management has revealed to plans or strategy to gradually unwind the retail storefronts which they have proven are unprofitable. And if the 1300+ stores (consumer and college) aren't profitable now, when paper-based book sales are declining, hands up anyone who thinks they will be strongly profitable three years from now?
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Is there such a plan? OF COOOOOOOOOUURSE.
Is now a horrible time to announce it ? Double OF COOOOOOOOOUURSE.
Right now, B&N's best course is to project confidence ( " We can take Amazon's punch. And we've got an October surprise of our own"). They'll roll out the NC2 ( " better than the KF.... which copied the NC1") and hang on. They can hope that the digital division gets profitable and pulls them out of the ditch, while they stealthily implement their plan to close down the unprofitable stores. Will this work? Maybe not... but it's the only shot they got.
While there are reasons to be cheerful, I'm realistic. There are MORE reasons to be pessimistic. I think in five years there may be just three ebook stores-Amazon, Apple and Google. The shrunken pbook trade will be divided up among independents.