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The latest news on Audiobooks, eBooks and eReaders

Barnes and Noble is No Longer in the Tech Business

September 22, 2017 By Michael Kozlowski 13 Comments

Barnes and Noble has proclaimed that they are no longer in the tech business and they don’t have the culture or financing to compete with the likes of Amazon and Google. The bookseller will only focus on the growth of their retail stores going forward and are not going to innovate with the Nook.

Barnes and Noble conducted their annual shareholders meeting today and chairman Len Riggio had dire news for a Nook turnaround. Riggio explained that when e-book sales began exploding several years ago, B&N felt it had no choice but to enter the digital market. Instead, according to Riggio, B&N will focus on its physical stores and will partner with technology companies to keep a presence in the digital space. “There is no business model in technology” for B&N, Riggio acknowledged.

The first indicator that Barnes and Noble was abandoning the Nook was when they cancelled their agreement with Microsoft to sell e-books on the Windows platform to customers in Europe. Next, they closed their digital bookstore in the United Kingdom and stopped selling Nook e-readers through their retail partners. The bookseller than closed their Nook App Store and Nook Video platform in the United States and then outsourced all firmware development for Nook e-readers and the Nook app to a company called Bahwan CyberTek. In 2017 Barnes and Noble moved the Nook section from the front of the store to the back, where the customer service section is.

According to the report by Len Riggio it now looks like Barnes and Noble will not internally design new e-readers and tablets going forward, instead they will outsource it. Barnes and Noble has always had their e-readers manufactured by Netronix and over the past four years their tablets were sold in partnership with Samsung. The B&N The Nook Tablet 7 was issued earlier this year and it was the first Nook branded tablet in a very long time. It was designed and manufactured by Chinese manufacturer Shenzhen Jingwah Information Technology Co.

The big question is who has the capability to design and manufacture Nook branded hardware in the future? Bahwan CyberTek does not have enough experience designing hardware, they are primarily a software and SAAS driven company and Shenzhen Jingwah Information Technology Co only makes tablets. This means either Barnes and Noble would have Netronix design something in-house or partner with Boyue or Kobo.

Kobo makes the most sense because they have no presence in the United States. CEO Michael Tamblyn has stated on many occasions that the US market is saturated and Amazon dominates it so completely that Kobo can only be viable if they focus on international markets. While this might be true, there is another story that does not get much press. Kobo had an exclusive agreement to sell e-readers and e-books at Borders. When the bookseller went bankrupt in 2011 this exclusivity agreement was lost in various court battles over Borders assets. This is why Kobo was unable to partner with other stores, like Booksamillion. The only thing Kobo was able to do in the US was partner with the American Booksellers Association to have indie bookstores carry Kobo branded e-readers and earn an affiliate fee when their local customers purchased e-books. Sadly, many bookstores did not want to carry e-readers and Kobo has zero visibility in the states.

Kobo has a ton of experience taking over ailing digital bookstore businesses and turned it into a highly successful revenue model. The Sony Reader Store, Blinkbox Books, Flipkart, Sainsbury’s, Waterstone’s all stopped selling e-books and all of their customers were transferred over to Kobo. In 2017 Kobo purchased the Tolino brand from Deutsche Telekom and is now responsible for hardware/software design for all future Tolino branded e-readers.

In an exclusive interview with Good e-Reader, Kobo Rakuten CEO Michael Tamblyn explained the process “Often, there isn’t a purchase involved at all. In many cases, we are helping them out as they reach the end of their runway. Most companies that started out between 2009-2014 have run into one of a number of walls related to scaling – they couldn’t capture enough share to make publishers interested, couldn’t get big enough to keep investors interested, tried out a business model that didn’t work, couldn’t raise cash after VCs moved on from ebooks to the next shiny thing, or their parent company didn’t see a path to profitability and decided to wind down. Whatever the reason, Kobo’s focus is making sure that people who bought ebooks can keep their libraries intact and continue on with us as happy customers. It’s so gratifying to get messages from these newly-migrated customers who are so relieved that their books aren’t going away, who get to upgrade to newer, better ereaders, who were stuck on apps that hadn’t been updated in years and now get to see how mobile reading has jumped forward. And the companies who are working with us are happy too. Instead of angry customers wondering where their books went, readers and their libraries are taken care of. It isn’t always easy, but we do our very best to make it a soft landing for everyone.

Wrap Up

I think Barnes and Noble is going to sell the Nook brand to Kobo. Kobo will then take the millions of Nook customers and transfer them into their own ecosystem. Kobo will then sell their own e-readers in over 600 B&N bookstores in the United States.  Barnes and Noble could finally wash their hands of technology and still make money through the sales of hardware. Customers in the states could buy a Kobo from the BN.COM website or play around with one in a store, before they make a buying decision.

For years B&N investors have been begging the company to get rid of the Nook, which is a literal black hole of revenue. Nook has lost over $1.6 billion dollars in revenue since 2009 and every quarter they continue to experience losses.  There is no silver lining to the Nook, no CEO is going to save it and bring it back to its former glory. Barnes and Noble does not have the company culture to focus on digital, they are a traditional bookseller. The final nail in the coffin is the founder of the company saying they are basically abandoning ebooks and e-readers and tablets.

Michael Kozlowski

Michael Kozlowski is the Editor in Chief of Good e-Reader. He has been writing about audiobooks and e-readers for the past ten years. His articles have been picked up by major and local news sources and websites such as the CNET, Engadget, Huffington Post and Verge.

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Filed Under: Barnes and Noble Nook, Business News, e-Reader News, Kindle News



  • X Ray

    With Chapters Indigo evidently poised to enter the US market in 2018, I’m not convinced that Kobo wants another Borders on its hands with B&N.

    B&N is obviously struggling and this latest move is an admission of such. Focusing on their retail business which, apparently, now includes restaurants? Yes, what could go wrong with that because NO restaurant ever goes out of business (and, yep, that’s sarcasm).

    Me? I’d wait for 2018 and Indigo rather than hitching my wagon to THOSE idiots.

  • Heidi Steindel

    I am sad. I was really hoping to upgrade my nook ereader. i think they signed their death sentence here. ebooks and digital media is the present and the future. I would love to be able to buy a kobo locally though. i would think it would make morse sence to move it all to Amazon over kobo and sell amazon devices in store .

  • Jen

    I hope they’re still going to produce books in Nook format because I’m not keen to start my library over again with a Kindle. By the way, I love my Samsung Galaxy Nook.

  • Heidi Steindel

    I think hes saying your nook library will transfer over to kobo or whomever picks it up so you will not lose your books

  • Lori Lum

    While I’d like to have my nook library transferred over to whoever takes it over (Kobo most probably, given their history), I can see your point about Kobo not wanting another Borders situation.

  • Good E-Reader

    From what I understand is that you account would be switched from Barnes and Noble over to Kobo. Normally all eligible titles would be allowed to switch over, this would include MOST e-books, but would likely not include magazines and college newspapers.

  • kbrigan

    Serious Question! Is anybody offering any kind of rebate on old Nooks? I have a Simple Touch that I loved when it was alive, but now the software’s so old it can’t communicate with anyone. (This is the main reason I got out of the ebook habit.)

  • Heidi Steindel

    If you have a Kindle Fire Tablet and allow for third party downloads under settings you can go to getjar dot com and download the NOOK app from there. I did this and now read both Nook and Kindle books on my Kindle fire. I hope I am allowed to post this. Its another solution to move your nook books over to an amazon device. Does not work for the ereaders tho.

  • Jen

    Well, that’s good news. Thanks.

  • kbrigan

    That would make them subject to the Amazon boycott. Having to avoid both Amazon and B&N because of their politics would be quite the hardship. [Of course, maybe it’s time for some card-carrying Conservatives — or at least people who know enough to leave their politics at home — to get (back) into the book business.]

  • Steven Zacharius

    The Kobo Aura One is the best e-reader on the market. I like having a full page of text with the title of the book in the running head.

  • Heidi Steindel

    I really want one. I hate that no one sells in the USA.

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