Barnes & Noble Weighs Its E-Reader Investment

Could this be the end of the Nook? Via the New York Times:

Even for a company with a lot of bad news lately, the bulletin from Barnes & Noble this month had an ominous feel.

Barnes & Noble, the nation’s largest book chain, warned that when it reports fiscal 2013 third-quarter results on Thursday, losses in its Nook Media division — which includes sales of e-books and devices — will 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 away 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.

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  • Catherine, I’m wondering: Could this have any impact on DRM? Being able to switch content over different platforms seems even more urgent when manufacturers start discontinuing devices. Or am I missing something here?

  • Catherine Tosko

    Yeah, dunno actually – I suppose it could. I don’t bother with Nook myself – do you? Found it too much effort.