Each year, the 24/7 Wall Street web site publishes a list of the ten brands most likely to disappear within the following 18 months. This year, Nook and two national print magazines show up; Nook at number two on the list.
http://247wallst.com/2013/05/23/ten-...ppear-in-2014/
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This year’s list reflects the brutally competitive nature of certain industries and the importance of not falling behind in efficiency, innovation or financing.
The list also reflects how industry trends can accelerate the demise of certain brands.
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The rules of the game are straightforward:
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We continue to use the same methodology in deciding which brands will disappear. The major criteria include:
1.Declining sales and losses;
2.Disclosures by the parent of the brand that it might go out of business;
3.Rising costs that are unlikely to be recouped through higher prices;
4.Companies that are sold;
5.Companies that go into bankruptcy;
6.Companies that have lost the great majority of their customers; and
7.Operations with withering market share.
Each brand on the list suffers from one or more of these problems. Each of the 10 will be gone, based on our definitions, within 18 months.
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Their track record over the years is a steady 70% accuracy so they're not infallible. But just showing up on the list is bad news unto itself.
Of Nook, they say:
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Barnes & Noble Inc.’s (NYSE: BKS) e-reader was destined to struggle from the start. It was launched in October 2009, roughly two years after Amazon.com’s Kindle, which was, and has remained, the market leader. Both products were hit by competition from Apple’s iPad before the e-reader business even hit its stride. Adoption of tablets is forecast to grow 69.8% in 2013, while e-readers are expected to drop 27%.
The Nook was thrown a lifeline a year ago, when Microsoft invested $300 million in Barnes & Noble’s digital business, but to no avail. It has been downhill since. Sales at the company’s Nook segment, which includes both the e-reader and online books, declined by 26% between the third quarter of 2012 and the third quarter of 2013. The Nook’s disadvantage may have little to do with its hardware or software and more to do with size of its online audience. It competes against much larger e-commerce sites that have access to hundreds of millions of new readers. While Amazon has more than 130 million visitors a month according to Quantcast, Barnes & Noble has just over 6 million visitors
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The stories for ROAD & TRACK and MARTHA STEWART LIVING are the usual for the print magazine business; declining ads.
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With print advertising in a multiyear decline, some magazines have weathered the decline better than others. These two, however, have suffered sharp drops in advertising revenue over the past five years. Magazines also carry the heavy legacy costs of printing, paper and distribution — a problem not shared by online-only competition.
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The clock is ticking...