March 27, 2013

Scrying the future in the screen of a free Nook


Sure, blame EVERYTHING on the volcano.

Barnes & Noble announced Friday that it would be giving away Nook e-readers beginning on Sunday and lasting until the end of March. They’re offering a free Nook Simple e-ink reader, worth $79, for every purchase of the upmarket ($269) Nook HD+ tablet. Naturally book business commenters—many of whom have been following our lead in mourning the impending demise of the last remaining monster of brick and mortar book sales—had more than a little anxiety to spare about the move.

Jeremy Greenfield for Forbes:

This is a very bad sign for the continued viability of the device business struggling bookseller. One digital media observer noted in a recent blog post that he saw a similar pattern of discounting and giveaways right before HP killed off its tablet business.

Adi Robertson at The Verge is more even-handed:

Barnes & Noble has touted the value of bundling E Ink and LCD products before, but this fire-sale pricing could also be part of its recently announced plan to reevaluate tablet and e-reader strategies. While the company has refuted rumors that it’s losing interest in hardware production, it has suggested that people are more interested in tablets like the Nook HD+ than in single-use devices.

The Reuters write-up by Phil Wahba on the Huffington Post was titled simply “Barnes & Noble Give Away Simple Touch E-Readers Amidst Terrible Sales.”

Even the company’s own press release could be seen as having a panicked amount of Extraneously Capitalized Brand Names Throughout.

The difficulty with all of this hue and cry is that it is both right and wrong. B&N may well be on the way out, but this deal is not necessarily symptomatic of that. That fate is scrawled on the wall, and yes, it is written in surplus e-ink. But if, as Greenfield has it, free ereaders have become inevitable in this marketplace, catering to that necessity is at the very least a sign that B&N is about on par with everyone else when they offer them now.

That is to say, they are on par with their competitors in pricing mutually profitless devices, and falling behind in the goal of the devices—to grab a share of an increasingly balkanized e-book reader market.

The cheap device bundling isn’t really shocking to any of these commenters. Think of a technology as cheap and ubiquitous as CDs, which for a time still had enough prestige and low enough cost to be worth shrink-wrapping to every box of Count Chococoma Cereal. Yes, B&N has a surplus of these older model Nooks. They’re gambling that it won’t spoil the prestige of the entire brand to offer them up for free.

They’re also, of course, gambling on the inevitable new-customer book dump, when new owners of e-readers fill them up for the initial time. With later generation tablets that have a variety of uses, that effect has been dampened. We’re also reaching a point where devices are being bought as replacements, meaning that readers will already have their libraries and won’t be inclined to fill up the things in one go.

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.

Yes, B&N is in trouble. Signs of that are easy enough to spot without crying wolf at every sale they offer. The wolves are coming. We all know it. Better to stop with the warning and start with the looking for tooth-proof trousers.


Dustin Kurtz is former marketing manager of Melville House.