June 20, 2013
Barnes & Noble denies that it’s phasing out the Nook, but its pricing says otherwise
by Alex Shephard
Earlier this month, embattled big box bookstore/public restroom Barnes & Noble announced that it was cutting the price of its Nook HD tablets by $70-$120 for one week in honor of Father’s Day. In what the company imaginatively called the “best prices ever Father’s Day promotion,” the Nook HD tablet, which had been going for $199, was marked down to $129, while the Nook HD+, which was previously sold for $269, was available for $149. The move wasn’t terribly surprising, as Barnes & Noble had offered a similar promotion for Mother’s Day.
On Monday, however, B&N announced that they would be extending the promotion indefinitely, though it’s still billed as a “limited-time” offer:
“With the fantastic success of our Father’s Day promotion, we decided to extend the great prices on NOOK HD and NOOK HD+ to help our customers gear up for a great summer reading season,” said Jamie Iannone, President of NOOK Media. “In our stores and online, customers have embraced these beautifully designed, lightweight devices with stunning displays that offer great reading and entertainment content. We’re thrilled to keep in place our best prices ever and deliver great value to make reading more affordable.”
The Father’s Day promotion very well may have been a “fantastic success.” And I’m sure that Barnes & Noble, which is, at least for the time being, in the business of selling books, wants to pull customers in for the summer reading season. But it is highly unlikely that these were the deciding factors in Barnes & Noble’s decision to lock-in rockbottom prices for its ereader.
If Nooks really were flying off the shelves, Barnes & Noble wouldn’t have to slash prices. As PaidContent’s Laura Hazard Owen points out in her piece about the price drop, “If customers were snapping up these tablets, B&N wouldn’t have to slash their prices.”
But customers haven’t been snapping up the tablets. Despite a series of price cuts and promotions throughout the year, the Nook has yet to establish itself as a true competitor to the Kindle or the iPad in the increasingly balkanized ebook market. Last month, 24/7 Wall St. had this to say about the Nook’s failure to acquire an audience when it included it on a list of “ten brands that will disappear by 2014”:
“The Nook’s disadvantage may have little do with its hardware or software and more to do with [the] size of its online audience. It competes against much larger e-commerce sites that have access to hundreds of millions of new readers. While Amazon has more than 130 million visitors a month according to Quantcast, Barnes & Noble has just over 6 million visitors)”
In the past, we’ve speculated that Barnes & Noble’s decision to discount (or give away) Nooks was a calculated risk—you lose money on the device itself, in the hope of increasing your customer base. For instance, when Barnes & Noble announced that it would be giving away Nook Simple devices, my colleague Dustin Kurtz wrote:
B&N may be banking on the Nook Simple being given as gifts to people who don’t otherwise own an e-reader, those who have been less apt to buy one for themselves. Those are the real targets of the offer, an untapped market.
It’s certainly possible that the decision to cut the prices for the Nook HD tablet is yet another last ditch attempt for Barnes & Noble to tap into a market that just doesn’t seem that into it. And yet, as Hazard Owen points out in her piece, when you “combine the price cuts with the multiple rumors that Barnes & Noble plans to phase out the Nook tablet line by the end of the fiscal year 2014… it starts to look as if B&N is trying to clear out stock.”
Barnes & Noble has, of course, denied these rumors but they could explain—should they be true—both Barnes & Noble’s decision to shoot itself in the foot by including Google Play in the Nook HD and its succession of increasingly desperate price cuts. With 2014 less than six months away, it’s starting to look more and more likely that Barnes & Noble will limp out of the hardware business with its tail between its legs.
Alex Shephard is the director of digital media for Melville House, and a former bookseller.