As I Said First: Color Nooks Are Dead

I told all of you back on March 29: All Nook Tablets Are Now Orphan Devices

And now here we are:

Barnes & Noble Reports Fiscal 2013 Year-End Financial Results

Bloodbath.

And the color Nooks are dead:

The company plans to significantly reduce losses in the NOOK segment by limiting risks associated with manufacturing. Going forward, the company intends to continue to design eReading devices and reading platforms, while creating a partnership model for manufacturing in the competitive color tablet market. Thus, the widely popular lines of Simple Touch and Glowlight products will continue to be developed in house, and the company’s tablet line will be co-branded with yet to be announced third party manufacturers of consumer electronics products. At the same time, the company intends to continue to build its digital catalog, adding thousands of eBooks every week, and launching new NOOK Apps.

Boldfaced emphasis added by me.

So where does that leave them?

It leaves them with contracts for magazines, music, and video that they are counting on people to purchase via tablet apps.

Are they out of their minds?

Why should anyone get a magazine, a song, or any video from Nook Media when there are companies that are specialists in each of those areas?

Nook Media is going to compete with Netflix, Amazon Prime video? With iTunes, Google Music and, again, Amazon?

The deadly bit is this:

the company’s tablet line will be co-branded with yet to be announced third party manufacturers of consumer electronics products

Did you notice the plural? Manufacturers.

Does that mean Microsoft has passed on acquiring Nook Media?

Well, Microsoft still has this week to say for itself.

But none of this is good for Nook Media as a going concern.

Losing close to half a billion dollars in one year …

NOOK EBITDA losses were $475 million for the full year, primarily driven by cumulative NOOK inventory related charges of $222 million.

… tells me that management just doesn’t have any feel for the market it’s competing in.

Even when you subtract the inventory charges — which aren’t going away until the Barnes & Noble site revives the BLINK tag to bray “Sold Out!” on the color Nooks — that’s still a quarter of a billion dollars lost in one year.

And they expect to inspire confidence as a media company using this lame excuse:

Digital content sales increased 16.2% for the full year, however, they decreased 8.9% for the fourth quarter due in part to the device sales shortfall as well as the comparison to the The Hunger Games and Fifty Shades of Grey trilogies a year ago.

Boldfaced emphasis added by me.

So they’re hit-dependent now? They can’t market any other books to try to pick up that slack? How lame is that?

And there’s this bit too:

due in part to the device sales shortfall

Their next excuse will be they partnered with crap consumer electronics manufacturers (such as eFun — wow, they just love walking into trap doors!) — and then that too few people are downloading their “Nook Play” app.

Look, there’s just no other way to parse this. Management has lost its way. This is not a company with any future. If Microsoft doesn’t acquire them (can they cancel that eFun contract?), it’s all over.

Now we wait for the eInk Nook Death Sale. Because if you think Nook Media has a future with eInk, why is Kobo dumping their Kobo Mini reader for just US$39?

Because there’s no future there.

And another thing: Why buy an eInk Nook when there’s that cheap Kobo Mini? People just want to read. If they haven’t yet invested in Nookbooks, why buy an eInk Nook?

Pop Quiz:

What is Barnes & Noble without Nook Media (read: eBooks)?

What is Nook Media without a Microsoft acquisition?

What is Windows RT without a Nook Media acquisition?

There’s one answer to all: Toast.

It’s toast all the way down.

Next domino to fall: Self-publishers complaining about late Nookbook payments.

The death spiral continues.

Previously here:

The Color Nook Death Sale Continues
Is Anyone In Charge At Nook Media?
The Color Nook Death Sale Has Begun
Barnes & Noble’s Strange Moves
Just Buy Nook Media Right Now, Microsoft
Barnes & Noble’s Magical Nuclear Tour
How The Windows RT Nook Will Happen And Its Price
Nook Touch Jumps In Deadpool With $20 Fire Sale
And So The Next Nook Will Be Windows RT
Barnes & Noble’s Shocking Nook Tablet Sale
Barnes & Noble Takes First Step To Phasing Out Nook Tablets
The Nook HD+ Is A Financial Sinkhole
All Nook Tablets Are Now Orphan Devices

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1 Comment

Filed under Barnes & Noble Nook

One response to “As I Said First: Color Nooks Are Dead

  1. They were dead in my opinion when they first hit the shelves. I used to sell them at a B&N store and the managers had such unrealistic expectations fo r the device. I worked for Borders as well and was here when they tanked. This company is headed in the same direction.

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