Do Barnes and Noble Have A Digital Strategy?

Last year the US market lost Borders and book chains globally started to look increasingly as vulnerable. Today’s news on the deliberations, speculation and announcements at Barnes and Noble are the latest shockwaves to reverberate across the publishing world. Whatever they do, or don’t do, it is apparent that everything is up for grabs, with reports of the sale of Sterling Publishing and the splitting of the Nook ebusiness from the bricks and mortar business. As its shares tumbled on the news to what looks, from the outside to be a PR and communications ‘challenge ‘ it leaves many asking just what the strategy and the desired outcome is.

Barnes and Noble have stated that the two sides to their retail business have very different levels of maturity and investment. What is alarming is that they make the public announcements and then say that there is no certainty that the review will result in a separation but that they do not rule out a potential sale of the ereader business. The obvious lack of strategy will not assure investors and without the Nook ebusiness what is left? The bricks and motor business is solid, but with no US chain competition, B&N would appear to be not taking up the slack Borders left behind.

The Nook sale could generate substantial cash for shareholders but does it include BarnesandNoble.com or is it just the ebook business? Barnes and Noble’s ebook business is where it is today on its brand. We think its time that Barnes and Noble realise that the brand is Barnes and Noble not the Nook. Without that affiliation would consumers still buy Nook? Would it have sold even a fraction of its sales without the Barnes and Noble brand? It is different to Kobo and Indigo, where KOBO’s brand was built separately from the start and also internationally many consumers have not even heard of Indigo. Is Nook actually strong enoughto survive alone and even if Waterstones were to adopt it would it be just another case of dejavu?

Even more surprising is the news that Barnes and Noble intent to get out of publishing and sell off Sterling Publishing. The shareholders may be rubbing their hands at the thought of cash but is Sterling in fact the digital family silver? In a world where content is the key, why sell off a viable content business that feeds the digital engine. Barnes and Noble have long bought into print runs, had their own imprints and Sterling’s wide range of content is perfect for digital exploitation. At a time when digital content is about to explode and Amazon is increasing its publishing activities, it wise to dispose of this asset for a few pieces of silver? There is also the question of whether the potential sale of Nook and Sterling will include Pubit , or exclude the self publishing ebook imprint?

We can see that B&N is not going to win the battle against Amazon’s Kindle platform. Their pockets are not deep enough, neither are the strategically positioned even within the US, let alone outside it, to do so. Can they be happy being the number two in the US or even lower and nowhere outside the US? Will Apple or Google inflict more damage to their market share? As Apple prepares to launch its own self publishing offer and go textebook and Google prepares a tablet, where would Nook stand? Like Amazon, B&N understand publishing and bookselling, but unlike Amazon they are carrying too much baggage, have less understanding shareholders and have greater financial exposure.