The Fallacy Of The B&N Fallacy

The B&N fallacy

The short version:

  • Create a first rate storefront+reader on Android and the web.
  • Shift more resources into the iOS app and make it better than anybody else’s.
  • Perform a series of commerce-oriented experiments, e.g. subscriptions, bundling, in-book payments, etc.

This ignores quite a bit of history. And that history matters.

1) We had storefront-only booksellers before. Fictionwise and eReader. They did not expand eBooks much. They created the market but where are they today? Gone.

2) Sony needed its Reader to create an eBook market as an eBook market.

3) Bezos could have easily gone with ePub and sold to Sony Reader owners, but did not. He knew a device was required.

4) Barnes & Noble’s hardware actually expanded the eBook market. Many of those print customers who frequented their stores were won over. They never bought Kindles.

5) Barnes & Noble retreating totally from hardware is a formula for utter failure. There is just no reason to buy from a Barnes & Noble eBook store, period.

6) Like it or not, Barnes & Noble is in the hardware business. Opening their hardware to full Android would improve sales. Their hardware is not bad, the way they lock them down is the problem.

7) Given a level playing field where all eBook vendors are just an app, Amazon still wins. The “universality” of ePub becomes a moot point because Kindle books can be read via an app, via a desktop program, and via the web. People don’t care about file formats. They just want to read.

8) Barnes & Noble has already burned too many people with their crappy customer service. Dumping their hardware would be the last straw for whatever customers they still have.

9) The main problem for everybody remains higher up in the food chain: Book publishers. Until eBook vendors are free to sell as they wish, price as they wish, bundle as they wish, nothing progressive is possible. Everyone is hamstrung by the publishers. It’s the “Let’s you and him fight” trick.

I’m even leaving out how Barnes & Noble sold eBook hardware in-store years before Amazon even thought of eBooks. But it’s fruitless to ask to turn back the clock and have a Do Over where Barnes & Noble (read: eBook-hater Len Riggio) wakes up to eBooks earlier than Bezos did and commits itself to the future.

For now, I maintain the best thing for Barnes & Noble to do is open all its hardware to Android. They must stem their hardware investment losses first and that would be a huge help. The Nook HD+ is very good hardware but its window of opportunity is going to be slammed shut within the next two months. Aside from Archos, there’s the rumored Nexus 7.7 coming up. Barnes & Noble needs a bold move just to stand their ground until they can figure out their next best step in hardware. And they can still offer what no one else can: An open Android eInk tablet.

Previously here:

Barnes & Noble Nook Bloodbath
Countdown To The Death Of The Nook Begins
Barnes & Noble Needs To Go Nuclear

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13 Comments

Filed under Barnes & Noble Nook

13 responses to “The Fallacy Of The B&N Fallacy

  1. Baldur Bjarnason (@fakebaldur)

    The popularity of big-display high-dpi mobile phones, iPads, iPads mini, and other tablets is a market that Fictionwise and eReader never had. It completely changes the dynamic.

    A device used to be required. Now you don’t because people already have their own devices. 4″+ Android phones and tablets (iPads or otherwise) are always going to outnumber book retailer subsidised tablets by a large margin. It’s a much bigger, much more lucrative, much less costly market to target.

    Somebody who has a big high res phone is very unlikely to buy a retailer-subsidised tablet, even if it is cheap.

    Of course, there remain platform risks (Apple’s and Google’s whim as platform owners) but those aren’t as big, financially, as a subsidised hardware gambit.

    Because somebody who doesn’t make money from hardware isn’t in the hardware business. It’s overhead for their sales infrastructure coupled with service and support costs, much like Google’s server investments. Except it has more risk because all of your business benefit from a device can disappear depending on the device buyer’s whim.

    And the only way they can make money from hardware directly would be to increase their prices which makes them less competitive.

    So if you’re right that people aren’t going to forgive them for their crap customer service (and if they can’t improve it) and that there would be a backlash for cancelling the device products, then B&N is quite simply screwed. They have a choice between bleeding to death through hardware costs and subsidies and being torn apart in a customer revolt. Scylla and Charybdis.

    • mikecane

      They are basically screwed. But I’m trying to get them out of hardware without totally killing themselves. If they liberate their hardware, that’s good will towards their customers and the possibility of further expanding their sales too and stopping the bleeding. Staying in hardware beyond eInk is just suicidal now. But they can’t just surrender. They need a graceful retreat.

    • arparp

      4″+phones and tablets are ubiquitous among New York City commuters, but Kindles and dead tree books are far more visibly prevalent as reading devices on the subway. Reading novels on a phone is awful, and the problem isn’t resolution. It sucks visually, it drains power, it’s more expensive if dropped/lost or stolen. Older people know it, hip kids know it. Something will have to change drastically for the usage to truly converge.

  2. theJimmy

    +1 on the crappy B&N customer service. They have a long, long way to go.

  3. Aren’t eReaders (Nook, Kindle, etc.) getting irrelevant in a tablet and big screen moble world. Ain’t it about the APPs, reader, eCommerce UX?

  4. John

    “the way they lock them down is the problem.” IT people have blinders on. 90% of their market doesn’t care so much that it is locked down. Look at the #1 selling tablet right now. Locked down much more than Android. All unlocking their devices will do is increase their technical support costs way more than the slightly (if any) increased sales.

    • mikecane

      I mean “locked down” in the sense that people must buy apps through B&N only. That’s an idiotic investment by B&N and dissuades many devs who need to modify their apps to sell through B&N. Their greed in this respect is costing them hardware sales and is a wasteful investment. They aren’t Apple or Amazon or Google and shouldn’t try to be.

  5. Andy Foster

    Well said. But how can this kind of thinking reach the mind of the CEO, William Lynch or whomever that can make that kind of decision.

    Just amazing how they can be so oblivious to the writing on the ebook, pun intended.

  6. Pingback: The Fallacy Of The B&N Fallacy | My Daily Feeds

  7. jmurphy

    Where is Fictionwise today?!?!?! B&N bought them and shuttered them, to eliminate competition, remember?

    • mikecane

      Yes, I do remember. It makes my point. They got out of it their mutant DRM. And Amazon’s Kindle format is based on their acquisition of MobiPocket.

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