Things Would Be a Lot Different if I Ran B&N’s Nook Department

Nook Shop

I’ll admit I’m the last guy who should be calling the shots for any big corporate entity given my recalcitrant nature, but I can’t help but think how different things would be for Barnes and Noble if someone like me was in charge of the Nook brand.

Barnes and Noble could make a lot more money and gain a lot more return customers if they just did these three things, especially the first one.

1. Drop B&N’s ePub DRM in favor of regular Adobe DRM. No one is going to argue that DRM isn’t a pain in the arse, but B&N goes and makes matters even worse by insisting on using their own exclusive DRM. This makes it so Nook ebooks will only work on a Nook device or with B&N’s Nook software, thus closing off the entire market for all non-Nook devices, with a few exceptions.

There are tens of thousands of people out there with Sony Readers, Kobo Readers, Pocketbook ereaders, and all other non-Kindle ebook readers that support regular Adobe DRM. Not to mention all the people who like reading on their tablets with the Aldiko app or some other reading app that supports Adobe DRM.

None of these people can buy ebooks from Barnes and Noble simply because B&N chose to use their own proprietary DRM instead of the much more commonly supported Adobe DRM. Update: It turns out Aldiko does support B&N’s DRM; you’d think they would mention that fact somewhere.

Barnes and Noble’s ebookstore is very large and the prices are generally comparable with Amazon’s. Unlike Amazon, B&N has a huge advantage by the fact their ebooks are in ePub format, which is supported by virtually all ereaders. Yet they aren’t taking advantage of this at all and probably never will.

Limiting your market is never a good way to succeed. Worse, B&N is doing it in more ways than one…

2. Launch the Nook brand internationally. Right now Nook devices and Nook ebooks can only be purchased in the United States. There have been whispers on the wind of B&N expanding the Nook brand internationally, but that has yet to happen.

It’s concerning that B&N continues to remain rooted in the US while other markets are being dominated by their competitors. Amazon’s reach for the Kindle store extends to nearly 200 countries. Kobo has been vigorously expanding internationally too. Even Sony and Google who only seem to be half-interested in the ebook market have expanded outside the US. In fact B&N is the only ebook company I can think of that limits their market solely to the Unites States.

3. Tear the doors off the Nook’s gated community. If B&N wants to remain in the conversation for Android tablets, they are going to have to start doing things differently. They can’t continue to lock customers into the Nook Appstore only. Let people sideload apps from other sources to make them happy.

The Nook appstore is never going to be able to compete with other appstores out there. Right now B&N’s Nook appstore has about 5500 apps. By contrast, Amazon’s appstore has over 47,000 and Google’s appstore has something like 600,000.

Also, if B&N wants an Android appstore they should go all out and do it right instead of just making it a walled garden for Nook owners. Put out a Nook appstore app and let other devices have access to the store too.

All of these changes are things Barnes and Noble’s competitors have managed to accomplish so it’s not like we are talking about insurmountable achievements here. Everyone else in the ebook and ereader field is moving forward while Barnes and Noble is standing still.

26 Responses to “Things Would Be a Lot Different if I Ran B&N’s Nook Department”

  1. Spot on Nathan. Insightful post. They really need to lose the walled-in environment. I think the message is clear: unlike Amazon, no one wants to be exclusively trapped the B&N garden.

  2. BlueFire reader on the iPad is one ereader app that accepts B&N DRM. B&N mislabels some YA books (4-5 grade), that will not download into Nook Kids. Solved the problem by installing BlueFire on the child’s iPad.
    I agree with you on all points. B&N limits itself too much.

  3. Comixology on the Nook would be a big step toward keeping me a Nook user. Great article!

  4. Normally I reject “here’s what [big company X] should do” articles as they tend to be shoddy, but I think you’re absolutely right on every point. I’d also say that they should be encouraging and capitalizing on the talented Nook hacker community, as their work has led a lot of people like me to choose a Nook device.

    • That is an excellent point Xyzzy. B&N has to know that more people buy their devices because of their root potential. As Nathan has said before, the Nook Touch is really an outdated eReader when it comes to software, but when it is rooted it becomes a totally different device. It seems that the way they are going now, they will only continue to make their devices harder to hack and completely ignore this potential.

  5. Nathan, I agree with you.

    I think B&N also have a great opportunity within the education market, which will soon explode. B&N would have to design a customized tablet, though.

    Also, as far as an international expansion goes, I have no doubt that B&N could concour Europe with the Nook Glowlight. I know most people in Europe read on Ipads, because there is no reasonable priced e-ink reader available, except the Kindle…which does not support library books in Europe – the Nook does!

    Lastly, Your article is from a bigger stratetic point of view. I am wondering what you think about B&N’s performance when it comes to Nook display in store and how the Nook Lead promote their readers?

    • Honestly I hardly ever visit B&N stores so can’t really comment on the Nook displays. The last time I went was like a year ago and the setup was directly in front of the door as you walk in. B&N seems to do a good job promoting the Nook brand, and they are always running some kind of promotion. Plus the are pretty good at innovating new products with the Nook Glow and they were the first to do an ereader tablet well with the Nook Color. They just need to think bigger.

  6. At least one of Pandigital’s readers could also read B&N DRM. As far as I know, B&N’s DRM is supported by Adobe, but Kobo and Sony have chosen not to include it in their devices (probably because people might be more likely to then buy B&N books for their Sony or Kobo readers).

    And actually, I specifically buy from B&N because I like their DRM the best. Since it is device independent, if B&N does go out of the ebook business, there will still be a way for me to access my books. The same may not be true if Adobe decides to get out of the business.

  7. The biggest argument against B&N DRM is that it requires readers to have a credit card. That is discriminatory and keeps eBooks out of the hands of many. You can’t even use a B&N Gift Card to buy books unless you have a valid CC number to enter first. I have suspicions that B&N’s eInk sales have collapsed. They have the best eInk device out there — rooting it can make it a Kindle too and run other Android apps. If they’d drop their damn mutant DRM, I think sales would soar — and so would their eBook sales to owners of other eInk devices that use “standard” Adobe DRM.

  8. Speaking as a NOOK user of over two years…

    While valid suggestions, these are addressing symptoms rather than the underlying problems. The underlying problems include (at least):

    1) The NOOK division is losing massive amounts of money for B&N, even with Agency Model in place. It will probably become a *disastrous* money drain if B&N needs to compete against Amazon’s below-cost e-book pricing practices. And if B&N doesn’t match the below-cost pricing, they’re going to have a difficult time staying relevant in the e-book world.

    2) BN.com’s tech staff is so incompetent that it’d make an hilarious sitcom. They’re totally incapable of making the bn.com web site function properly, and content themselves with making it function wrong *differently* every few months.

    3) B&N is a “bricks-and-mortar” bookseller, and as such is subject to laws that Amazon, Apple, Kobo, and Sony aren’t. Countries like Canada have passed laws forbidding outside booksellers including B&N from operating in their country.

    At this point, the NOOK division is probably terminal. B&N is shopping it around, but hasn’t found anyone interested in buying an operation that’s losing a quarter billion dollars a year on a gross margin of $68 million per year (fiscal 2012 figures). If the judge approves the proposed settlements in DoJ vs. Apple et al, B&N’s smart move is to shut the NOOK business down as quickly as possible.

    It’ll be a serious loss, but it looks to be inevitable.

    • To address the original points in view of the above…

      Adobe DRM: this doesn’t need to be an “either/or”. B&N could sell e-books in a choice of Adobe or B&N DRM. Number me among the multitude who think that B&N’s DRM is far less intrusive than Adobe’s, and I’d hate to see it go away. Especially when there’s no need. (Just as there’s no need to *not* sell with Adobe DRM.)

      Still… the number of additional e-book sales is going to be relatively small. B&N claims to have about 3/4 of the non-Kindle market already, so the most they might see is maybe a 50% increase in sales, with numbers of less than 15% being my guess. It’s not like there are millions of Kobo and Sony users out there who’re just itching to buy e-books from B&N.

      International sales: yes indeed, there’s an expanding market that could be exploited. And B&N’s trying to get there, but between their screwed-up tech staff and the international legal restrictions, they’re blocked at almost every turn. If they can sell off the NOOK division to a company that doesn’t have physical stores that sell physical cultural artifacts (books, DVDs, etc.), the first hurdle shouldn’t be such a problem. Even better if the buyer has tech people who know something about how computers and the Web work.

      As for the hardware, B&N should abandon that business as fast as they can. Despite the guaranteed 30% gross margin on Agency e-books, the gross margin for the whole NOOK division in 4Q2012 was 1.0%! It’s a pretty safe guess that means B&N was selling the devices at a huge loss. And now they’re discounting the gizmos even *more* heavily. I can’t imagine that having branded devices is somehow strategic to the business.

  9. All this reality is like a bucket of cold water in the face too early in the morning!

    I agree with all the comments above. I have a Nook Tablet 16 GB (rooted) and a Nook Simple Touch (also rooted) on which I read Nook, Kindle, Google books. Both of these tablets have much to recommend them, particularly against their Kindle hardware counterparts.

    Then along comes the Nexus 7 (and more 7″ Android tablets), and that is a hard tablet for the Nook Tablet & Color to compete against. Hailed as the Kindle Fire killer, I saw no (or hardly any?) mention of the Nook Tablet in the reviews and commentary about the Nexus 7. The Nook Tablet has dropped off the mass media radar.

    I live in Berkeley, California, historically a very bookstore-friendly university town. B&N had a large and excellent store in town…but they closed it several years ago. The nearest B&N stores are far enough away that I never bother to go there. So, at least for me, the B&N stores add minimal value to the Nook experience.

  10. Nathan, I agree with your first recommendation about dropping the B&N proprietary DRM. This is proven out by Kobo.com. They use standard Adobe DRM and I buy many ebooks from them to read on my Sony and Onyx Boox e-readers.

    I think it would be great to see Nathan run B&N’s Nook Department. Then we could have fun writing critiques of his performance :-).

    • Perhaps we can start a write-in campaign? But then, how would he have time to write posts for the-ebook-reader.com? :(

  11. @Doug speaking of bn.com’s technical issues, I found a page of links to 20 free B&N Classics whose listing pages probably should have expired last year. All of these titles are listed for $3.99 if you search for them under Nook Books on their website, but these pages still offer them for free. I just downloaded them all, so all the links work. The B&N Classics Series are easily the best versions of public domain titles out there. They include interesting prefaces written by modern scholars and lots of supplementary material.

    Enjoy some free B&N Classics gang: http://tweezlereads.blogspot.com/2011/08/20-free-barnes-noble-classics.html

  12. Excellent points and people have been saying similar things for years. What B&N really needs is visionary leadership, somebody who will shake it up and move it forward. And they need to get organized with a plan of action. Sometimes it seems they don’t have a plan. I think when they first did their modified type of DRM in 2009 it was not well thought out and they cut themselves off from market growth. I own a 1st ed. Nook but never buy B&N Nook brand books. I buy ePUBs elsewhere, i.e. Google Books etc. I want to be able to use my EPUBS wherever I want.

  13. Does anyone but me care that the Nook (I’ve had 4) STILL doesn’t allow direct library books downloads? Library books have to be sideloaded onto the Nook. I for one seldom boot up my old creaky laptop. I can either borrow directly to a kindle or kindle app, or i can use Overdrive Media Console on a tablet. I’ve asked for years now about the library book issue at BN, and employees are equally frustrated..

  14. I’ve been using the N2A card since last September in my Nook Color…most of these issues are resolved. It is nice to have access to the Amazon app store, Google Market, as well as many others. I have about 600 Kindle Books, 100 Google Play books, 100 apps from Google Play and Amazon, in addidion to about 1300 Nook books…all on my 16 gig N2A card! I’m very happy with my “poor man’s iPad.”

  15. I have used the Nook in the past and had purchased a number of books to be read on the device;however,I now use the Kindle Firewire. With the halp of a program, I am now able to read all of my Nook books on my Firewire. There is on my Kindle a seperate program for Nook which reads all of my nook programs.
    Talk about covenicne, I now have both devices on the Kindle Firewire. As stated, there is now a seperate program on the Firewire that is devoted exclusively to the Nook and it works great. Just like reading it on a Nook.

    Gordon Sutton

  16. I am a Nook owner and a happy one as well.

    However, it seems strange to me that companies like B&N & Kobo try to compete with Amazon by imitating the least desirable of Amazons practices – in house formats, closed garden devices etc.

  17. B&N should drop the price of ebooks OR at least give the 10% discount using their reader club card. I didn’t renew my card after realizing it didn’t give me discount on ebook purchases. If paper books are so expensive due to printing, ink, distribution etc etc then ebooks should be less expensive than paper books, not more.

  18. Some things B&N is getting right:

    1. Their bricks-and-mortar stores are really promoting the Nook line. Nook displays are right inside the front door of every location, manned by knowledgeable Nook customer service representatives. These displays are attractive and fun to visit. They run a variety of different promotions throughout the year, including: a discount if you claim you are not going to use your Kindle anymore (I’m not sure how they track this but I got that discount on my original Nook 1); discounted bundle packages with reading light, charger, and case; and lots of free stuff, like free gift cards and free B&N Classics. They also hold Nook Night tutorial events that show you how to use and get the most out of your device. Despite the apparent desperation of their refurb sales, at least they are moving some units.

    2. The Nook Touch is one of the best designed eReaders on the market. It is a physically appealing device that is comfortable to hold. Their font rendering “Best Text” technology makes for excellent screen resolution, maybe the best I have seen. The NT software is easy to use.

    3. All of their devices have MicroSD slots (and can be easily rooted).

    4. B&N teamed up with Microsoft on April 30, 2012. In this deal, B&N gets a $300 million investment to rejuvenate their tech, ebook, and Nook departments. Microsoft will be promoting the Nook app with a tie in to Windows 8. There is also talk of B&N spinning off the Nook business, so I’m not sure if this would positively or negatively affect the brand or B&N as a company, but improvements from a more independent business could be expected. In the short term, this investment should give B&N a much-needed shot in the arm. Analysts estimate that eBook sales will average $10 billion a year from now until 2016. B&N needs to step up their game, and start biting off big chunks of this market.

  19. I agree with your ideas. B&N not being technology company seems to miss some of these as ideas but your last two points are problems. Also I will point out I work the nook desk so I have another view of things.

    B&N is a US only company so it makes sense to limit themselves to the US market as they do not have a presence outside of the United States. But to capture that they should license the devices and tech to others outside so B&N can make money not limited to the US while not needing to create support staff outside the US.

    The third part I agree with as a user. I am a tech person so I really agree a lot with it. Most people who buy a nook are people who are not technology inclined so it would not benefit them. Also while it is nice to hack how does it help B&N if they do not make money from the store. Letting people hack the device does not let them make money at all. People install kindle or other apps, things that will not help them make money to make up for the loss on the device.

    Supporting people who try to do just basic things is tough enough. I am not sure that B&N is ready to support a mad amount of users. It needs to up its tech game to do things.

    One thing I would want changed is timely updates to the devices. There should be a time table on when to expect updates and there should be a real effort to make it happen in a regular manner.