While we remain committed to providing a great digital reading experience to our customers, we are exploring all opportunities to reduce costs.
That’s the sound of Barnes and Noble CEO Ron Boire sounding the retreat from the firm’s ill-advised venture into competing with Amazon’s Kindle with its own NOOK e-reader.
While his comments are simply reflective of an ongoing shift away by the firm from its digital disappointment, what is interesting is how many actions are now being taken to achieve this. Boire states bluntly:
Our first priority is to significantly improve NOOK performance. During the third quarter, we reduced NOOK expenses by $25 million and recently took additional action to exit NOOK’s app and video businesses that will result in additional cost savings…we are actively engaged in exploring a number of alternatives to materially reduce NOOK’s expense structure.
It’s easy to see why this is the case. While the third quarter saw B&N turn in increased profits of $80.3 million, up from $72.2 million year-on-year, total sales fell 1.8% to $1.41 billion, attributable in large part to poor online sales offsetting decent offline activity in-store.
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So action is required – and it’s starting to kick in soon. B&N customers need to get used to some big changes coming up next week – 15 March to be precise. That’s when the firm will no longer offer third party applications from the Nook Store. That’s a decision fuelled by the success of Google’s Play Store which runs on B&N devices and has been inevitably far more successful.
This decision impacts every tablet B&N has ever made, but the company insists that all existing Apps previously downloaded from the NOOK Store will remain in customers Nook Library and will continue to be accessible on compatible Nook devices.
From 15 March, customers will also not be able to rent or purchase video content from the NOOK video store, which will be closed down completely on 30 April. If customers want to keep the content they’ve already purchased, the need to transfer content to other providers.
If you’ve bought Disney, Pixar, Marvel or Star Wars content, you need to open an account with Disney Movies Anywhere, while all other content will now require the opening of a CinemaNow account. If you haven’t done so by 30 April, you lose the content you’ve purchased.
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For all this, Boire insists that online remains a core part of the company’s ongoing strategy:
BN.com,represents a big opportunity for us and is a very important component of our omni-channel offering. While we are encouraged the site’s improved performance during the third quarter, we still have work to do to improve sales.
We have undertaken major projects to improve the user experience, including a re-design of the front-end, improving SEO by re-engineering certain elements of the site, and improving BN.com’s search tool so that it’s more relevant and intuitive to the customer’s query.
Link to the rest at diginomica and thanks to Barb for the tip.