Barnes & Noble May Jettison the Nook
Struggling chain says Nook is successful but costly
01/05/2012 | By James R. Hood
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ConsumerAffairs.com
| Computers
It looks like the Nook may be the next casualty of the raging ebook battle, which is increasingly being fought between the Kindle, the Kindle Touch, the Kindle DX, the Kindle Fire, the iPad and a few smaller players.
Barnes & Noble said today it is looking at spinning off the Nook which, though successful, is a drain on earnings.
"We see substantial value in what we've built with our Nook business in only two years, and we believe it's the right time to investigate our options to unlock that value," Chief Executive William Lynch said.
Seeking to put a happy face on the situation, B&N reported "record holiday sales" for Nook devices and digital content. During the nine-week holiday period ending December 31, 2011, Nook unit sales increased 70% over the same period last year.
The company said that while sales of the Nook Tablet exceeded expectations sales of the Nook Simple Touch "lagged expectations, indicating a stronger customer preference for color devices."
Tough times
The well-polished statements leave little doubt that Barnes & Noble -- the sole surviving nationwide bookstore chain -- is having a hard time competing with Amazon and Apple, which dominate the e-reader and e-book markets.
In a prepared statement, Lynch said that in order to capitalize on the rapid growth of the Nook digital business and B&N's position in the expanding market for digital content, the company is looking at separate the Nook business from its bookstore empire.
Doing so would remove the drag on earnings the Nook represents and allow the digital business to raise capital independently of the book business.
"In Nook, we’ve established one of the world’s best retail platforms for the sale of digital copyright content," Lynch said. "Between continued projected growth in the U.S., and the opportunity for NOOK internationally in the next 12 months, we expect the business to continue to scale rapidly for the foreseeable future.”
B&N became the last of the giant bookstore chains last year when Borders declared bankruptcy and closed all of its stores.
Paulette Delor Green (Fri, 06 Jan 2012 01:04:42 +0000): whew.....glad I got the Kindle Fire.
Kathleen Schogoleff Kinman (Fri, 06 Jan 2012 15:26:01 +0000): All of these readers seem overpriced when the cost of downloading ebooks is factored in. The technology is now firmly in place, and widely available enough, for prices to start coming down if they expect to increase sales. There isn't going to be enough sustained demand for the new versions, beyond the market of people who just MUST have the latest, to justify the huge price differentials.
Amy Bailey Bower (Sun, 08 Jan 2012 12:21:17 +0000): Not really , ebooks are a fraction of the cost of a paperback. I have the Kindle Fire however and do not know what Nook charges for books. I am also able to access my library on my phone and computer as well as the Kindle so I can pick up where I left off anywhere. There are 50K free books to download as well. If you dont like Ereaders check out www.paperbackswap.com that is where I am getting rid of my books I have accumulated. Its pretty cool.
Kim Parsons (Fri, 06 Jan 2012 17:08:45 +0000): Of course they are going to do this since the Nook is what I have. Shaking my head here.
Eric Schneck (Sun, 08 Jan 2012 22:18:10 +0000): I'm sure as soon as B&N lets go of the reigns, you'll see an increase in popularity of the Nook. With a new operating system, it has great potential! Mine has been running as a tablet (with a B&N reader if I want to still read books) for months now and it's been awesome. :)
Candace Gray (Mon, 09 Jan 2012 03:33:03 +0000): This actually may be good news.
http://the-cheap.net/2012/01/06/as-the-nook-spins-away-from-bn-the-shift-and-the-future-for-nook-owners/
Edwin Walker (Mon, 09 Jan 2012 03:35:19 +0000): ebooks are badly overpriced. Most of the costs associated with a paper book are the paper, the printing, the shipping, and the markup at the retail outlet. The cost to produce a digital version is almost nothing by comparison, but the prices of $10 and more are crazy. Its pure greed and unsustainable. cut the price on ebooks so that the same profit percentage is realized, and sales will be even more astounding. In the meantime, I can get used paperbacks for 25 cents at gatage sales and 50 cents to a dollar at thrift stores.
Bayla Washburne (Fri, 13 Jan 2012 19:47:45 +0000): Those of us that just want to read books, and save the :apps, data, internet, etc, for our other devises are very unhappy with this news, We love our Nook Simple Touch (and we also have a Kindle too). What cam we do to help B&N? Buy more e-books? Get lots of folks to buy books? Would that even make a difference?
Gordon Goede (Fri, 13 Jan 2012 19:51:56 +0000): I'm book-poor now, Bayla! I do love to have the feel of a book.