Barnes and Noble has just released their latest financial results and the news is dire. The bookseller has reported that Nook e-reader, tablet and e-book sales have fallen 31.9% from the same period last year. What is most disturbing is that in the past they reported hardware and digital sales separately, but are now combining the figures.
The entire Nook division managed to generate $43.5 million dollars and this was primarily due to less people buying e-books. NOOK EBITDA losses of $21.3 million declined $15.1 million versus the prior year as the company continues to reduce expenses.
One of the reasons why Nook e-book sales are down is because the only new hardware that the company has consistently released are tablets. These new Android devices are only marketed to the US and UK, two markets that have reached a breaking point in saturation.
The Samsung line of Nook tablets have the Google Play App store as the primary avenue to download and install apps. There is a strong indication that the average customer is downloading alternative e-book reading apps, such as Kindle, Kobo or an e-book subscription service like Scribd, instead of using the Barnes and Noble digital bookstore.
The second big reason why Nook e-book sales have fallen off a cliff is attributed to the broken website they launched this past summer. The online Nook e-reading software continues to be broken, which prevents people from reading their e-book collection in their internet browser. Barnes and Noble continues to bury their heads in the sand about this very pressing issue, and refuses to fix it.
To be honest, I am sick and tired of reporting on declining Nook hardware and e-book sales. Every three months I generate another headline about how the bookseller continues to suffer double digit loses. As it stands, Kindle Unlimited, the Amazon subscription e-book program is making more money than Barnes and Noble entire digital division.
The big problem with Barnes and Noble is that they have no direction with e-books and hardware. Everything is outsourced to Samsung and Netronix, and they have zero say in anything to do with the design. This results in uninspiring devices that look like every other tablet on the market.
I feel the biggest issue is that the bookseller limits themselves to the US and UK. They have no ambition to expand their brand into Asia, Australia, Europe, South America and New Zeland. Getting the necessary e-book licensing agreements and generating localized versions of their bookstore is not at all challenging. Nor is it difficult to hire former publishers and executives to open a satellite office and get the ball rolling with generating revenue.
I have heard that the new Barnes and Noble CEO wants to kill the Nook division in a concentrated effort to consolidate their business into physical bookstores and allocate all available resources to ensure their continued success. From their prospective, it is far easier to just kill something than to work hard and make it profitable.