Ordinarily when your largest competitor goes out of business, it's a great opportunity. But Barnes and Noble is struggling to find its way, even though they bought rights to the customer list of Borders. In recent news, Barnes and Noble has announced weak earnings and is comtemplating selling off one of it's crown jewels, the Nook e-reader. From a business standpoint, B & N is caught in a classic dilemma. They've got a well known brand, but their mainline business -- bricks and mortar book and music superstores -- is experiencing revenue declines. On the other hand, they've got a growing online presence with barnesandnoble.com, they've had a modicum of success with the Nook e-reader and their erstwhile major competitor is gone.
So, what does B & N need to do now? It's re-invention time, baby, and the company needs to act while it still can to leverage it's brand and figure out a new business model that will make sense as the content markets continue their acceleration toward digital media. Their mainline business can still be an asset, but they really need to look at all of their resources and try to establish business plans that get them a bigger stake in the digital economy, while retaining their ability to distribute books and other content directly to customers. They've just signed a deal to distribute content from the New York Times onto a subsidized version of the Nook, so they may have a few tricks left in their toolkit.
I work for a company that develops hardware and it is a very different business than publishing. I think Barnes and Noble would likely be better off spinning the Nook business off to people that really know the hardware business and can define a more pro-active market strategy. However, Barnes and Noble should still license the Nook for their own use, so that they still have a stake in it's success. Nobody else has duplicated Apple's recipe for success in well-designed premium media products, but I would expect there's still room for products that have decent margins and aren't just being used as a way to drive content sales. It's a changing world out there. Barnes and Noble need to take a fresh look at the businesses they are in and decide what business models make sense over the next several years. The past is gone and they need to be looking forward.
As a reader, I'd like Barnes and Noble to stay in business, because I've enjoyed shopping at their stores and where I live, there aren't many independent bookstores. As a writer, I'd like to have readers be able to continue to see real books on bookshelves. However, the Print on Demand business model probably makes a lot more sense than the current system of shipping books and then throwing most of them away when they get remaindered. What do you think? Will Barnes and Noble survive? Do you want them to?
