In Monday’s New York Times, Leslie Kaufman reports on the outlook for Barnes & Noble’s Nook Media division, which includes sales of e-books and devices.
Earlier this month, Barnes & Noble, the nation’s largest book chain, warned that when it reports fiscal 2013 third-quarter results on Thursday, losses in the Nook division would be greater than the year before and that the unit’s revenue for all of fiscal 2013 would be far below projections it gave of $3 billion.
The problem was not so much the extent of the losses, but what the losses might signal: that the digital approach that Barnes & Noble has been heavily investing in as its future for the last several years has essentially run its course.
A person familiar with Barnes & Nobles’s strategy acknowledged that this quarter, which includes holiday sales, has caused executives to realize the company must move awa from its program to engineer and build its own devices and focus more on licensing its content to other device makers.
“They are not completely getting out of the hardware business, but they are going to lean a lot more on the comprehensive digital catalog of content,†said this person, who asked not to be identified discussing corporate strategy.
On Thursday, the person said, the company will emphasize its commitment to intensify partnerships with other tablet producers like Microsoft and Samsung to make deals for content that it controls.
If Barnes & Noble does indeed pull back from building tablets, it would be a 180-degree shift for a company that as late as last year was promoting the Nook as its future.
