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Barnes & Noble: The Conspiracy Theories Mount

Posted By Joanna Cabot On January 9, 2013 @ 12:44 pm In Barnes & Noble,ebook | 12 Comments

[1]My recent exploration of the failing of Barnes & Noble [2] attracted many comments, some of which surprised me. To me, it was a simple issue of, ‘If you won’t sell to people, how can they buy?’ But I had some food for thought from some of our readers, and I think the problem merits some further exploration. Here are my top off-the-beaten-track Barnes & Noble Failure Conspiracy Theories.

Do some (or all) of them account for Barnes & Noble’s dismal sales?

1. Barnes & Noble is targeting takeover partners, not customers.

This one came to me via my Beloved, who reads … but makes his comments orally. His theory is this: In America, the dominant players are Amazon and Barnes & Noble, with a few in-roads by Kobo, Sony, etc., but nothing significant. What if Barnes & Noble was hoping to change that? What if they’ve decided to focus on their bricks-and-mortar stores? After all, while books may be a shrinking market, toys and educational products are not, and B&N (like Indigo here in Canada) are devoting increasing shelf space to it. Maybe they actually want to dump the online stuff, so they’ve decided not to sink any more money into it. They’re still selling, and perhaps making moderate gains in the UK.

In other words, their goal is not to dominate per se, but rather to keep it just attractive enough to be a desirable entity for takeover. They’re using EPUB already. Kobo could buy them out and instantly move to number two in the U.S. Or Sony, whose hardware dominance has slipped ever since the Kindle launched, could easily merge its own EPUB store with B&N, and have a new hardware line (with an exclusivity contract to Barnes & Noble to sell it), and suddenly be back in the game.

It’s a bit outside the box, this theory, but I kind of like it.

2. It’s the fault of territorial restrictions/government interference/DRM.

I agree with this, to an extent. These issues can be problematic for any vendor. But the thing is, others have worked around them. If Kobo can come from nowhere and establish a market share, and if Amazon can be third to the game and still be one of the top two players in Canada, why can’t Barnes & Noble? What are these other companies doing that B&N is not?

I do think the, ‘It’s somebody else’s fault’ argument does have some weight, but not all the weight. That is, there is something to it … but not everything.

As reader and commenter Felix Torres so eloquently pointed out: “Going international would bring in money that might make up for the losses at home but until they do something about the reason for those losses, they will continue to have the same problems.”

3. Barnes & Noble lacks an affiliate program on par with Amazon.

Reader and commenter Bryan Paul Sullo makes the point that in the numerous blogs that review books, the ‘buy now’ link always leads back to Amazon, because they have an excellent affiliate program where bloggers can earn money for referring people to the Kindle store. That’s an excellent point, and one I hadn’t thought of. How many bloggers do you know who have ‘buy now’ links to other stores?

Kobo is doing just fine without an affiliate program because in most countries they service, they are just about the only game in town. America-centric Barnes & Noble, however, isn’t so lucky. They have the behemoth to contend with. I couldn’t say how many sales Amazon is sucking away from its competitors via affiliate links, but it’s definitely an interesting stat to ponder.

4. B&N [3] isn’t offering a unique enough catalog.

This was an interesting one to me. Several commenters pointed out that the vast majority of purchased books are bestsellers, and you can get those everywhere. People may lament the closure of a bricks and mortar B&N store, but you can get Fifty Shades of Grey with your groceries, and that will be enough for many customers.

So, the value of a big store like B&N is what they can offer those who don’t want the best-sellers, and with the floor space their stores are offering these days to non-book merchandise, that value is shrinking.

Now, it could be that the online offerings are more robust. But that is the peril of linking yourself so strongly with a retail chain–if you’ve already lost relevance in the eyes of your potential customer because they come into your store and see a desert wasteland, how likely are they to go and look for you online? Instead, they just type the book into Google Search and get directed straight to a blog with an Amazon affiliate link…

* * *

So, the plot thickens. There’s a lot to think about here. What seems obvious to me is that some of B&N’s problems may not be fixable. But others may be. If they can focus on those, and maybe gain back some market share, there is hope for them yet … if they want there to be!


12 Comments (Open | Close)

12 Comments To "Barnes & Noble: The Conspiracy Theories Mount"

#1 Comment By Barry On January 9, 2013 @ 2:21 pm

B&N is just not visionary enough. They had a headstart over Amazon in offering library content, but never built on it. They briefly overtook Amazon with better e-readers and tablets, but have let that lapse. They have a network of stores (and therefore a distribution system) that Amazon lacks, but have treated it like a toy store (more games and kits–which can be bought online) instead of a community bookstore (more readings, author visits, expanded cafe–which can’t be bought online).

Lots of things could explain their lack of vision, but I expect it’s just B&N has a corporate history and culture that’s not suited to fast-changing, technologically demanding markets. They’ve reacted too slowly, been too focused on maintaining their publisher relationships, and have tried to negatively prevent customers from going elsewhere instead of given them positive reasons for staying with B&N.

#2 Comment By Felix Torres On January 9, 2013 @ 4:45 pm

On the conspiracy theory front, how about a variation?
B&N is too beholden to the Big Publishers. As a product of publisher volume discounts the top level managers spend too much time on upstream publisher relations (and, ahem, worrying about/bad-mouthing Amazon) and not enough time minding the store and spending time on customer relations.

Instead of looking for a magic bullet to slay Amazon, B&N should simply get back to basics and try to give consumers as many different reasons as possible to shop with them.

#3 Comment By Rob Preece On January 9, 2013 @ 9:03 pm

Agree with Felix that B&N’s major problem is figuring out a way to make money running their retail operations. It seems to me that they’ve come out with good hardware, they actually spent some money advertising during the Christmas season, their eBook selection may not be quite as wide as Amazon’s but it’s close, they offer an affiliate program similar to Amazon’s… I’ve seen them get a lot more active in their outreach to Nook users by e-mail over the past couple of months. But there should be more synergy between their brick and mortar business and their eBook business. Could publishers include a code with paper books allowing a free B&N download of the book being bought? Would B&N and publishers do that deal? (I would if B&N would shelf my paper books). If, as Felix says, B&N is spending too much time with the publishers complaining about Amazon, it sure seems like they should be able to come up with something together.

#4 Comment By Richard Adin On January 10, 2013 @ 6:45 am

The biggest obstacvle B&N has to success is customer service. It just plain stinks. As many of you know, I make it a point to buy from B&N and to avoid Amazon because I do not want to live in an Amazon-only ebook world. But B&N does what it can to make me constantly think about giving up my “crusade” and joining the Amazon tide.

A good example of the problem has been my Nook subscription to the New York Times.

B&N just can’t get its act together. Recently, I didn’t receive my Times until more than 16 hours late and one issue I didn’t receive at all. So I called customer service and asked for a refund on the missed issue. We are talking a refund of 99 cents, not hundreds of dollars. The first call to customer service ended very badly. They refused to consider refunding 99 cents unless I first agreed to a factory reset of my device. I asked what that would accomplish since I had just bought an ebook from B&N and downloaded it to my device while talking to customer service, so clearly my device was working. They not only refused to give me the refund, but the supervisor refused to talk to me unless I agreed to a factory reset. They also refused to check on whether there was a delivery problem at their end.

So I called again the next day. I started going through the same rigamarole, but this time I got a supervisor and demanded the refund. She reluctantly gave it to me, conceding that giving me a hard time over 99 cents was not smart.

But this is the nightmare that B&N customer service points people through. It acts as a turnoff to customers who no longer recommend B&N for ebooks. BTW, the in-store customer service for print books is significantly different; the problem lies in their ebook customer service.

B&N is dying because B&N can’t move from being executive-centric to customer-centric.

#5 Comment By gous On January 10, 2013 @ 8:29 am

The alternative viewpoint is that a successful transition was always a long shot. After all how many in the horse and buggy business became successful in the industry created by the internal combustion engine? Cannot think of any myself, especially dominant ones in the previous business.

Corporations are also like people in some respects. Anybody can see, and give advice to, Alf on how to get rid of that flab, but applying it is another thing. B&N has run an online business for many years and have never managed to be anything put a shadow of Amazon. That suggests very strongly that they will never be very good at it. Getting into the hardware business, especially tablets, is also looking like a very bad error on their part, a huge drain on their resources, time, and such talent as they still possess.

There is really no plausible universe in which B&N challenges Amazon, Apple, Google… the disparity is just too great. So conspiracy theory number one is probably correct, selling the Nook part of the business is their lifeline.

#6 Comment By Mark On January 10, 2013 @ 10:52 am

I bought a NOOK for two reasons: 1) It gets great reviews from techies, some of whom give it the edge over comparable Kindles; 2) I want Amazon to have serious competition, and it seems to me that B&N (in the US) is the only current candidate for the job. Their many stores across the country give them a feature that needs to be better parlayed into consumer/reader benefit that is itself monetized.

BUT I’m not ‘all in’ with B&N because I keep finding their eBook prices for the books I want (primarily non-fiction humanities) consistently $1 or more higher per title than the same at Amazon. And since I can read Kindle titles on my PC, iMac, iPad–everywhere except on my NOOK–my B&N bond is weaker than I’d like it to be.

I appreciate what several B&N store staffers tell me: Amazon sells Kindles at a loss; we don’t. If that were true (Is it?), I remain unwilling to keep buying content for my NOOK at my loss, despite liking my device very much.

Anyone at B&N listening?

#7 Comment By Damir Fonovich On January 10, 2013 @ 11:25 am

Richard Adin made this comment above…
“B&N is dying because B&N can’t move from being executive-centric to customer-centric.”

This is exactly the point. Apple, Amazon, Google…they got to where they are by focusing on making their systems user-friendly and simple to navigate. Internal systems need to all be focused on the end-result instead of arguing within the minutiae. B&N stores seem to operate quite well from within, however the stores are given no voice when pitted against the vision that the executive team has laid out. Efficiencies are missed, clout in the industry is ignored…B&N has many competitive advantages right now, but is missing the boat because the executive team has an agenda unknown to the rest of the organization.

The only scenario that makes sense is No.1…Nook Media needs to be sold to someone who can effectively use that brand. The frustrating thing for a B&N fan like myself is to see people claim that the eBookstore on B&N is limited compared to Amazon. It is not limited, it has almost three times the books available! Also, Kobo and Sony have already been relegated to the dustbin, they cannot even win marketshare in their home market of Japan, even with a year head start on Amazon.

#8 Comment By Ruth DJ On January 10, 2013 @ 12:56 pm

Actually B&N does have an affiliate program, but it’s through a third party and pretty awkward to use. So you have to go to this other website, then click on B&N, then you can search for the book’s link, etc, etc.

Amazon is definitely easier to use.

#9 Comment By David Wogahn On January 10, 2013 @ 3:24 pm

B&H has essentially one business, retailing. Unless they make money there they can’t fund R&D and/or discount products. In the meantime Amazon, Apple and Google have more than one revenue stream or in Google’s case, dominate advertising. It’s an eco-system world and they’ll have to “partner” with Microsoft or get out of hardware (as suggested above).

The other interesting thing I noticed over the holidays is that their devices were rarely part of the mainstream media conversation. I don’t think the media, or consumers for that matter, can keep all these devices options straight. It’s much simpler to review 3 products side by side. iPad Mini vs Fire vs Nexus. Certainly the parent companies are more widely followed….at least outside publishing.

#10 Comment By pdarnold On January 10, 2013 @ 9:09 pm

I agree with Richard Adin, and add, B&N website is fine for searching for books to purchase, but that is the only thing it has going for it. “My Nook Library” is a abysmal mess. It is searchable only by recent, author or title. There is no search engine such as Amazon or others have. You must follow through page after page after page should the book or author be near the middle of the alphabet. Also, if your wondering if you had purchased a certain eBook before, instead of providing some inkling of a past purchase you must go through the beginning process of a purchase before you’re advised “you already own this title”. Next is the wish list, which functions are next to useless. And finally, whenever B&N mastermind (I say that sarcastically) web designers/engineers make any changes to the web site there are ALWAYS major function problems for weeks, sometimes for several months. They have taken over Fictionwise, B&N should take advantage of the web designers from Fictionwise.

#11 Comment By Phyllis On January 11, 2013 @ 12:00 am

Let’s see, Barnes and Noble offers 1 free book on Friday, and if it happens to be a genre you don’t like, then tough. Kindle offers thousands of free books every day, and in every genre imaginable. Ok, so do I wan’t a NOOK for a Kindle. Hmmmmmmmmm. oh I know, a Kindle. Duh! Barnes and Noble needs to get with the program. I’m sure there are a lot of Kindle sales generated by the free books, especially if it is one of a series that is offered for free.

#12 Comment By Crissy On January 15, 2013 @ 12:47 pm

Another point…. indie authors.

Many indie authors are part of a growing community, and we want to support our fellow authors. B&N has been a bit hostile toward indie authors when it comes to physical books.

I agree that it is in their best interest to diversify what they sell in their brick and mortor stores. Half of what I buy there isn’t books anymore, and i’m not the only one. But I’d like to see more brick and mortor stores start selling indie titles as well.


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