Jun 26 2013
At the earnings call today, B&N admitted that it was discontinuing the production of Nook Tablets. It would continue to sell the Nook Simple Touch (a device that has had disappointing sales) and its biggest seller, the Nook Glo. Nook lost a lot of money. Revenue was down 34% compared to last year, not only from lowered hardware sales but also from content sales.
“Digital content sales increased 16.2 percent for the full year, however, they decreased 8.9 percent for the fourth quarter due in part to the device sales shortfall as well as the comparison to the The Hunger Games and Fifty Shades of Grey trilogies a year ago.”
Honestly, I would not expect to see any innovations from B&N on the eink side. It will likely continue to sell basic eink devices until such time as Nook Media can be offloaded. B&N will continue to sell the Nook Tablet through the holiday season (but why would you want a device that they aren’t going to continue to support and upgrade?)
Retail revenues were down 10 percent, some due to lower Nook unit sales. Ugh all around. One thing is for sure, Simon & Schuster isn’t going to see any uptick in books stocked unless it starts to pony up some coop money. B&N desperately needs major publisher support. paidContent
This article, however, suggests that a 50-50 split in e-book royalty must be the future for publisher and author contracts. Currently it is 25% off the net and actual royalty dollars can increase or decrease based upon the net received by publishers. I’ve often thought the “net” is the worst term in the royalty contract but no one seems to be too concerned about that, focusing primarily on the percentage figure.
Under agency pricing, 25% off the net generally was about 17% off the cover price.