Too Little, Too Late for Barnes & Noble in the UK?

Expert publishing blog opinions are solely those of the blogger and not necessarily endorsed by DBW.

In an attempt to expand its business into the fast-maturing international e-book market, Barnes & Noble announced today that it was finally launching in the UK this Fall. Analysts and observers think it might be too little too late.

The announcement by Barnes & Noble had been widely anticipated, as the company had been making rumbles in the UK. In March, the bookseller hosted a developer event in London and gave some insight into its plans for a UK launch.

Between then and now, Kobo formed a partnership to sell its devices in UK bookseller WHSmith (April) and Amazon cut a deal with UK bookseller Waterstones to sell its devices (May), leaving Barnes & Noble late to the dance and without a partner.

While Barnes & Noble will be selling Nooks in the UK, the question is where?

“It’s a little like musical chairs,” said Eoin Purcell, editor of Irish Publishing news and an expert on the UK e-book market. “The music has stopped and their rivals are sitting on the Waterstones and WHSmith chairs and they are still looking for somewhere to sit.”

Barnes & Noble could, of course, sell its books online using the power of its brand and some of the money promised for international expansion of the Nook business when B&N formed its partnership with Microsoft in April. In its agreement with the bookseller, Microsoft pledged $25 million a year for five years to aid the company in its international expansion efforts, part of a $605 million investment package.

The investment community, which will get to weigh in again tomorrow when Barnes & Noble announces its first-quarter earnings, doesn’t seem to buy the Nook plan. Since surging in the Spring after the Microsoft deal was announced, B&N shares have fallen back to pre-deal levels. And a Morningstar analyst told Bloomberg today that B&N still has yet to prove its business model and that more money from Microsoft won’t fix the company’s problems.

With a UK e-book market that’s already saturated by Amazon, Kobo, Sony, Apple and Google, moving in with no retail partner may not be the solution Wall Street is looking for.

“They’re arriving very, very late to the party and the only thing they bring to the party is a brand,” said Thad McIlroy, a publishing industry consultant who has followed Barnes & Noble closely and has written a recent book on the company. “They don’t need the Nook over there and they don’t need the books.”

Barnes & Noble could conceivably partner with other retailers outside of bookstores. Purcell speculates that B&N could partner with a supermarket chain or a big-box retailer, but that strategy doesn’t come without its pitfall: There’s already someone else there.

“I’d see a supermarket partnership as something that could pay off, though having said that Tesco has already been selling the Kindle,” he said. “In terms of big box retailers, I’d wager the like of PC World will take them, but that won’t be exclusive; the Kindle has been for sale there for some time.”


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