During Thursday’s earnings call, one B&N executive said that this was mischaracterized. Another report has Len Riggio interested in purchasing back the retail side of B&N which is akin to stealing the diamond and leaving the setting. Nook Media, LLC, which Pearson paid close to $90 million for a 5% interest, is now the biggest lower for B&N.
The Nook Media side showed a decline of 26% over last years’ comps with EBITDA losses doubling from $83 million a year ago to $190 million in this year’s third quarter. It is the Nook devices that are causing the big losses. A lot of money has been funneled into the development of devices but there is nothing to show for it. While digital content increased 6.8%, the Nook segment declines indicate that despite all the showroom space devoted to the devices, few people are buying them. If you can’t sell devices over the holiday period, your device are dead.
There are a host of problems associated with B&N’s Nook devices but the biggest one, in my opinion, was B&N’s failure to secure multimedia content such as music and movies. What is the point of a multi function device if there is a limited app store, outdated operating system and no actual multimedia for purchase?
The retail side showed only a slight decline of only 2.1%. In attempting to buy back the only profitable portion of B&N now, Riggio is banking on ebook adoption leveling out at 30% with the remaining readers devoted to print and in store purchasing. Business Wire
If you recall, readers reported problems finding Samhain titles at Books on Board and Samhain responded that 18 months ago it stopped doing direct business with BoB and would only allow BoB access to their titles through a third party distributor. Lyrical Press