Nook lives!

August 21, 2013
 

nook-hd-plus

Just over 2 months ago, Barnes & Noble had shouted from the rooftops that it was getting rid of its Nook hardware business and concentrating just on content. Well, they’ve changed their minds! They are staying in the hardware business and will be launching new hardware in time for Christmas.

I’ve been hearing a lot of “can’t believe they are staying in” and “they are losers and should stay out of the tablet and digital media business.” and I’m wondering, what business are they talking about? Surely they are not talking about B&N? Look, I think B&N is hurting, but I think it still has a heart beat and they should keep fighting.

Don’t get me wrong, I think Amazon’s Kindle is doing much better business here and they are up for some stiff competition in the tablet business. They have also abandon doing a lot of their own deals. But let’s also look at what B&N has going for it that will help it sell its products:

1. The Stores: You want to touch and try these things out in a setting where you are mellow, inclined to purchase gift items already. That’s the B&N store. That does not describe the Verizon store or AT&T store or even Best Buy. Certainly, it’s close to an Apple Store like experience. (I’m not saying it’s as nice as an Apple store! Don’t send me hate mail!) But the Apple store can be a bit intimidating to some people and no one finds B&N stores to be intimidating.

2. Customers: B&N has millions of customers. I believe over 6 million. They have a base of customers to work with. Perhaps it’s stiff competition with Amazon, but all is not lost.

3. Build out eco-system: Look, they had an eco-system built up already with apps and books. They can do more and frankly should hire folks who can do a better job with it. They have adapted to the GooglePlay store. B&N sells a ton of books and they, like Amazon can negotiate some good digital pricing along with the sale of physical products. Perhaps some clever things can be done for eBooks for the Nook. They need to figure this out. Amazon was late to the digital store game compared to Apple too, so it’s not a losing proposition for B&N yet.

4. Education business: B&N is the store that runs a strong chain of education bookstore around the country. They *get* the education business. And if you don’t believe that education is going digital and that likely, most students will just be using tablets with books loaded on instead of actual physical books, then I’ve got a bridge to sell ya. Already, there is a trend towards this and B&N is in a good position to potentially capture this business because they have relationships and access to the schools and the students. There needs to be a focus on selling them both the Nook and the digital content there.

It’s not going to be easy and they will still lose some money here. The risk is to stay analog and with a physical store only. Now they need to go and hire a CEO that gets the digital media business pronto.

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