Barnes & Noble is being left “out in the cold,” writes publishing consultant (and Digital Book World partner) Mike Shatzkin.
Unlike its competitors in the ebook business (Amazon, Apple, Google and Kobo), Barnes & Noble only sells books — for the most part — in the U.S. and needs to make a profit off them. According to Shatzkin, books are an auxiliary business for Amazon, et al, one which can be run with little or no profit; for the nation’s largest bricks-and-mortar bookseller, this isn’t the case.
This is a paradigm that leaves Barnes & Noble out in the cold. Their business, on which they must make money, is selling books. They are trying to diversify their merchandise selection a bit in their stores, but that’s a strategy that is both difficult to execute and has nowhere near the upside that Amazon, Google, and Apple have with their other businesses. This is an unfair fight where B&N is dependent on margins from their ebook (and book) sales while their competitors, if perhaps not totally content to break even on that business, aren’t materially affected if they do, or even if they lose a bit of money on that aspect of their business.
So, what is Barnes & Noble to do? Shatzkin doesn’t offer a remedy. Other publishing observers have suggested it close or sell Nook and take its positive cash-flow (but slow-to-no-growth) physical bookstore business private. One other suggested that Wal-Mart may buy Barnes & Noble in the hopes of opening up a new front in its war against Amazon. New Barnes & Noble CEO Michael Huseby may have been brought in to broker such deals.
Read more of Shatzkin’s post here.