Nook , Nook, Please Let Me In

We have already asked the question about Barnes and Noble’s international grand venture and whether it will even hit the consciousness of the UK consumer, let alone pass the ‘so what’ test?

As Frankfurt and the Christmas season nears we seen some more of their approach top the UK which is as far as we know still the limit of their ‘international’ programme today. They have announced two further stores Dixons, which is the High Street little brother of yes, PC World, which is out of town shed outlet of the same group Dixons Retail. So some would suggest they have not two but one additional retailer. The deal will not be exclusive so as with their other deals they will find themselves in a beauty contest with all the other wannabees but today with as much consumer awareness of their brand as the best Korean model.

Barnes and Noble have also announced their video offer of blockbuster movies, classic films and original TV shows from major studios including HBO, Sony Pictures Home Entertainment, STARZ, Viacom and Warner Bros. Entertainment, plus favourite movies from The Walt Disney Studios.  They also will integrate a customers physical DVD and Blu-ray Disc content and digital video collection through UltraViolet™. This will enable customers to link their UltraViolet accounts to the NOOK Cloud allowing them to view their content  across NOOK devices and platform. This again in true Barnes and Noble fashion is behind their competitors integration and although competes well with the likes of Kobo does little against Amazon. Would you put your video library in the hands of someone who is not really in that business, is not the market driver or leader in any digital media sector? This may carry more clout if they were still going to launch NEWCO with Microsoft, but this appears to be very quiet today and it is somewhat illogical to launch Barnes and Noble Nook ventures without a big partner at your side.

On a positive note Barnes and Noble did name Patrick Rouvillois vice president and managing director of its international business. Rouvillois was previously chief marketing officer and head of e-commerce for Carrefour , the No. 2 global retailer with 15,000 stores in 30 countries. Prior to that , he was Executive Vice President of Consumer Marketing for Orange Group, one of the world’s leading telecommunications operators, responsible for consumer propositions, product marketing, pricing and commercial investment optimization. Before joining Orange, Mr. Rouvillois has held positions at Vivendi Universal Net, where he managed a content aggregation portal for Vodafone and SFR and also spent six years at The Boston Consulting Group in Europe and Oceania. He will report to Jamie Iannone, President of Barnes and Noble digital products.

Rouvillois certainly has the background to make a difference but some would suggest on paper he may be a bigger hitter than the person he reports to and if Barnes and Noble are serious about international he should be standing in his own right.

The big question today is, how Barnes and Noble will define international success and the timelines they have identified to achieve this? It is often easy to get others to carry your devices, even relatively easy to sell them at a low price point, but it is far more difficult to break into an established market where you offer nothing different other than US reputation as number two.

Related articles:

Aug 12: Nook Nook Who's There?

Aug 12: Barnes and Noble, Nook and NEWCO Come to UK

July 12: Living In A US Centric World?

April 12: Microsoft return to eBooks via Nook

Jan 12: Do Barnes and Noble Have a Digital Strategy?

Apr 11: Nook Stops Short

Barnes and Noble, Nook and NEWCO Come to UK

How many consumers know of Barnes and Noble in the UK? True those who have been to the US may be familiar with the stores, but in the main the ‘world’s largest bookstore’ has until now operated within the US and is relatively unknown in Europe. Neither is the Nook any better known outside of the US.

So it was interesting to read that they are finally venturing outside of the US and launching their digital Nook platform and devices in the UK next month.

Then we have that very interesting developing partnership with Microsoft and the new venture currently under the wraps of the name NEWCO. This venture should take over the NOOK and campus store business from Barnes and Noble and enable that other perennial latecomer, Microsoft, to get into the ebook business – again.

The challenge is not finding UK retail partners, and money can always be spent to promote the launch but who is the consumer dealing with? Barnes and Noble, Nook or NEWCO and will they have to rebrand if NEWCO happens?

The press release was brief gave nothing but we can’t help quoting from it on the statements on the NEWCO situation and what must be the longest sentence ever written,

Such statements reflect the current views of Barnes & Noble with respect to future events, the outcome of which is subject to certain risks, including, among others, the general economic environment and consumer spending patterns, decreased consumer demand for Barnes & Noble's products, low growth or declining sales and net income due to various factors, risk that international expansion will not be successfully achieved or may be achieved later than expected, possible disruptions in Barnes & Noble's computer systems, telephone systems or supply chain, possible risks associated with data privacy, information security and intellectual property, possible work stoppages or increases in labor costs, possible increases in shipping rates or interruptions in shipping service, effects of competition, possible risks that inventory in channels of distribution may be larger than able to be sold, possible risk that returns from consumers or channels of distribution may be greater than estimated, the risk that the expected sales lift from Borders’ store closures is not achieved in whole or part, the risk that digital sales growth is less than expectations and the risk that it does not exceed the rate of investment spend, higher-than-anticipated store closing or relocation costs, higher interest rates, the performance of Barnes & Noble's online, digital and other initiatives, the performance and successful integration of acquired businesses, the success of Barnes & Noble's strategic investments, unanticipated increases in merchandise, component or occupancy costs, unanticipated adverse litigation results or effects, product and component shortages, the potential adverse impact on the business resulting from the review of a potential separation of the NOOK digital business, the risk that the transactions contemplated by the partnership with Microsoft to form Newco, including with respect to any spin-off, split-off or other disposition by Barnes & Noble of its interest in Newco, are not able to be implemented on the terms contemplated or at all, the risk that the transactions do not achieve the expected benefits for the parties. 


An interesting piece in bloomberg on the relationship and Barnes and Noble -  Barnes & Noble Investor Elation With Microsoft Deal Fades

Living In A US Centric Digital World?

Some would suggest that Barnes and Noble were never awake to the fact that the world didn’t stop at the Eastern seaboard of the US. Maybe they could have forged an alliance with the likes of Waterstones, Folyes or a European retailer and shared their international platform. If they had maybe they would have made a bigger digital penetration with their US centric Nook and they may have even had developed some real consumer awareness outside the US .  Instead they choose to stand firmly on US soil, as if they had returned to the Dark Ages and to had declare the world was flat and not round. The mistake has been sufficient to loose them a significant battle in their war against all their other competitors and forced them into a ‘catch up’ position.

This week the Newco, or whatever the baby that is conceived from the Microsoft and Nook liaison is to be called, announced a global programme. The Bookseller reported that the Newco now plans to launch digital bookstores in 10 countries within the next 12months and already has distribution agreements in place to facilitate Nook sales this year.

A week earlier, its Newco partner Microsoft, announced its tablet which is aimed to compete head to head with Apple’s iPad. However, Microsoft didn’t offer Newco and Nook the platform and like their treatment of Nokia on Windows 8. Some would suggest that this clearly shows that Microsoft will steer their own path, with or without their partners interests always being considered. Marriages of convenience sometimes turn out to be just that and not sustainable over time.

Meanwhile now that we have some 9 titles live on Kindle’s KDP platform we thought it was time we put our new digital publications on other platforms. Well Kobo in their own Canadian way appear to say a lot, but don’t make it easy. It is as if every applicant has to be personally vetted and the Canadian process is never quick unless you happen to be Canadian. Barnes and Noble’s ‘Pub It’ was more like a how ‘not to Pub It’. It works great in the US but like Barnes and Noble fails miserably when it comes to travelling over water. To demand US bank accounts, US addresses and pay overseas accounts by US Cheques is either just plain stupid or arrogant in the global economy. We hear that we are not alone with UK developers also questioning the US centric stance at a recent UK Nook developer conference.

Again Barnes and Noble or Newco are not alone and Kobo also have a somewhat weird affiliate strategy which is biased towards effectively handing over the affiliates customers back to themselves if they don’t maintain their sales. It’s as if the WHS deal was done with little thought on how to accommodate others at a later stage.

It is also frustrating in commenting on this unequal world when we are often bombarded with advice and insights from the industry which only apply to the US experience.

People complain that Amazon has too great a stake in the digital market but it hardly surprising given the ineptitude of the competitors to understand and accommodate those who merely wish to self publish as a small publisher or author, or act as an affiliate or developer and happen to be outside of North America.

We would love them to say we are wrong and would happily retract our claims and use their services…