Feature Article

August 19, 2013

Barnes & Noble Drops e-Reader Price, Releases Video App Ahead of Quarterly Earnings Report

On August 20, beleaguered bookseller Barnes & Noble will release its quarterly earnings report. Bloomberg analysts predict revenue of $1.3 billion and a loss of 86 cents in earnings per share. After a disastrous Q4 2013 report, T3 Trading Group said that "the stock looks like it could have a one-way ticket to the single digits."

Today, Barnes & Noble announced that it has dropped the price of its Nook Simple Touch with Glowlight e-ink reader to $99 from $119. The company had already dropped the price from its original $139.

Also today, Barnes & Noble announced that it was releasing its Nook Video app for iOS, Android and Roku. The bookselling giant is also releasing native Nook Video apps for the Nook Color and the Nook Tablet, although the company is only committed to selling those devices through the 2013 holiday season.

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Lance Ulanoff, editor-in-chief of Mashable.com, released an op-ed today stating that even though Barnes & Noble had made high-quality tablets, they were never truly competitive with the iPad or the Kindle. He also cited the absence of cameras as one of the weaknesses of the Nook family of tablets.

"Here’s the painful truth," wrote Ulanoff, "Barnes & Noble built some of the best, smartest and most affordable tablets on the market and no one bought them. Clearly the name did little to help drive interest and sales."

Barnes & Noble has expressed interest in continuing to produce Nook tablets with a manufacturing partner. It has changed its focus back to e-Readers, which may not be the best strategy.

Ricardo Bilton of Venturebeat noted that E-Ink Holdings, the company that makes e-ink screens for both Nook Simple Touch and Kindle, recently reported an annual loss of 46 percent. As full-featured tablets drop closer and closer to the price points of e-Readers, e-Readers could easily drop out of the market.

Whatever tomorrow's report holds for Barnes & Noble, its ventures into digital devices haven't provided the company with staying power. Mike Shatzkin, an organizer of the annual Digital Book World conference, predicts that Barnes & Noble will survive in the short-term but that its long-term prospects are comparable to those of its former rival, Borders.

"The market changes hit them both," Shatzkin told USA Today. "But when the flu hits town, the old and sick die first. Borders was mismanaged as a retailer, B&N was not."

Edited by Alisen Downey

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