A “person familiar with the matter” told the New York Times that the last quarter for Nook — a disaster where the company’s sales of the devices actually shrunk versus the previous year even amid a boom in tablet adoption — had caused senior executives to rethink the company’s digital strategy.
Translation: The company could stop producing devices and concentrate instead on selling content on other form factors.
When asked for comment by Digital Book World, a Barnes & Noble spokesperson said, “We have no plans to discontinue our award-winning line of NOOK products.”
From the New York Times:
A person familiar with Barnes & Nobles’s strategy acknowledged that this quarter, which includes holiday sales, has caused executives to realize the company must move away from its program to engineer and build its own devices and focus more on licensing its content to other device makers.
“They are not completely getting out of the hardware business, but they are going to lean a lot more on the comprehensive digital catalog of content,” said this person, who asked not to be identified discussing corporate strategy.
On Thursday, the person said, the company will emphasize its commitment to intensify partnerships with other tablet producers like Microsoft and Samsung to make deals for content that it controls.
As the Times article points out, this new strategy would be a complete reversal for the multi-billion dollar bricks-and-mortar bookseller. In Nov. of last year in a call with investors and press, Barnes & Noble CEO William Lynch said that Nook was the future of the company and that it would begin scaling in 2013.
Outside of a Microsoft-Nook tablet experiment (which has been expected since Microsoft made a $600 million investment in Nook last Spring), one wonders how Barnes & Noble plans to continue growing its ebook operation in the absence of dedicated devices. Perhaps the company will do what no other major ebook seller aside from Apple has done: sell ebooks directly to consumers on the iPad.
The reason ebook retailers haven’t made this move — one that seems logical because of the increasing popularity of tablets and the dominance of the iPad — is that Apple would likely take a 30% cut of anything sold through one of its apps.
Barnes & Noble has not yet returned request for comment.
Read more at the New York Times.
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