Tag Archives: barnes & noble

Why Barnes & Noble’s Nook Failed

Books, Business, Technology, , , , , , , ,
"I read all of Duane Gundrum's books because he's so dreamy...."
“I read all of Duane Gundrum’s books because he’s so dreamy….”

Unfortunately, it’s been predicted for some time that Barnes & Noble was going to distance itself from the Nook, and thus, the e-book market. So, it seems that moment is coming to pass. Speculators assume that Barnes & Noble will attempt to continue on as a brick and mortar (physical presence only) store and sell off all of its e-book stuff. Well, in case it’s not readily apparent, the problem with that is that without an actual device to continue to hype the market of products, the Nook is going to die out as people are going to see the Kindle as a continuing vehicle and the Nook as dead in the water. Sure, they can survive on apps for awhile, but eventually people are going to see the writing on the wall and choose to go with a platform that looks like it is going to survive the next wave of changes.

But the point of this post isn’t to talk about the future of Barnes & Noble, because to be honest, I have no idea what is going to happen to that company. However, what I can do is talk about what happened to the company, specifically as to why the Nook didn’t become the all-winning vehicle they were hoping it would be. To understand this, we have to use our little go back in time feature and see what was happening when the Nook launched with all intentions of challenging the new kid on the block, the Kindle.

Back then, Barnes & Noble was the big kid on the block. He’d already beat up every brick and mortar store that existed before him, and he was rearing to go after the next challenge. Only, the next challenge wasn’t another physical store, but an online one that promised to lower prices and produce a better shopping experience. Now, I wish to harp on the latter of those intentions because Barnes & Noble stupidly focused only on the first: Lower prices. And unfortunately, Barnes & Noble didn’t handle that one well either.

The Kindle offered books at lower prices than you could buy them at retail stores. This was huge. When the Nook launched, it attempted to “discount” prices as well, but if you held up both side by side (and I used to do this a lot), what you discovered was that most of the time the Kindle price was exactly the same as, or cheaper, than the Nook price for a book. And then you started to see more and more choices being offered on the Kindle, which made having a Nook kind of a stupid purchase because if you couldn’t find everything, and couldn’t find it cheaper, you bought a pretty stupid device.

But the second point is the one I want to talk about the most because that’s where I truly feel that Barnes & Noble failed with its Nook. What Amazon offered with its Kindle was not only lower prices, but it offered a better customer experience, meaning that if you were looking for something, the Kindle actually cared about helping you find it. This meant that as you bought more books, the algorithms that worked within Amazon served to make recommendations to help you find things that you might want in the future. The more you bought and searched, the more likely the device was going to serve to help you find exactly what you might want, even if you didn’t realize you wanted it.

The Nook, on the other hand, basically offered you whatever the publishers were selling, and it put its placement completely determined by the legacy model of the highest bidder (or largest publisher with more prestige). After a few purchases on a Nook, if you were looking for a new book, every new search was like starting out from the very beginning again. In other words, you were screwed. If you didn’t want only the most popular book out there, you had to figure out what you wanted on your own.

The problem B&N made was that it assumed that cheaper prices (less than you’d pay for the hard copy of the book) was more than enough to produce decent profit. But they didn’t take into account that they had to be cheaper than the competition, not just cheaper than their own posted price for the retail version of the hard copy. And then they made the customer experience as bad as an Internet search could be back before Google was invented. You basically had to do a search with the intention of hoping to get lucky in order to find the thing you were looking for. This was great if you were looking for a copy of 50 Shades of Gray, but it wasn’t so great if you were looking for new, independent writers who might be making a splash in an obscure genre, but a genre of which you often spent a lot of money. The Kindle, however, did this extraordinarily well.

So, it shouldn’t come as any surprise which device, and which company, won the battle. The war isn’t over, but quite a few of the initial battles were quite decisive, so the outcome seems somewhat conclusive.

Battling Through the Trenches of Publisher’s Row

Books, Business, Economics, Music, Social Networking, Writing, , , , , , , , , , , , , , , , , , ,
"I read all of Duane Gundrum's books because he's so dreamy...."

In case you aren’t aware of it, there is a war taking place. I’m not talking about Libya, Afghanistan or Iraq. I’m talking about the war that is currently waging over the publication of books. What war? You say. Well, let me explain.

For years, in order to get published, you sent out your work to a publisher (or an agent in hopes of getting a publisher), and if you were very lucky, you might get a bit of an advance. Sometimes, those advances were for decent money. Around the 1970s and on, they started getting really small. Kind of dismal, actually. Unless you were already a famous author, like Stephen King. So, you would get about $5,000-$10,000, and then the publisher would take 18 months or so to create your book. Then it would get released. If it started to sell, great. You would receive about $1.67 for a $20 book for each sale, the publisher keeping pretty much everything else. After all, they were the publisher. That $1.67 would continue to knock down the amount of the advance you received until you actually started to make what are called royalties, which would be additional money the book made after you paid off the advance. Most books tended to not even make back the advance, so you were generally lucky enough if you made somewhat of a decent advance.

Well, recently, the publishing industry has kind of been turned on its side. E-books are becoming the new “in” thing, and strangely enough, publishers are still maintaining their dominance in the industry, because they are still the power brokers they used to be. In other words, in order to gain any attention whatsoever, you really needed the publisher to get the attention out that you had published a book. So, not surprisingly, publishers have been publishing e-books, too, and still taking that outrageous amount off the top, leaving writers with very little profit, even though the costs for publishers have diminished to almost nothing.

Something new has started to happen, which is turning the whole industry on its side now. Writers are going directly to the readers and selling their books without the publishers. And needless to say, this is causing a bit of a stir in the whole industry. Publishers need the writers to survive, and so they are doing everything possible to diminish the positive experience for writers, so that publishers still remain the power brokers that they have always been. Unfortunately for them, that model isn’t going to last that much longer.

The publishing industry is a lot like the music industry, and its current dynamic is going through a revolution much like the music industry has recently gone through as well. While there are still seriously powerful music leaders in the industry still calling shots, a lot of artists have gone directly to the Internet with their work, and are bypassing the profit model previously established by the RIAA and other such top-down industry leaders. This has caused all sorts of problems for the industry, but it has done wonders to present new opportunities for artists who may never have received an ounce of attention before.

Move this into the publishing world, and you see the same sort of thing happening there. The publishing industry is still in control right now, mainly because the model hasn’t completely developed yet. Online booksellers, like Amazon, Apple, and somewhat Barnes & Noble, are producing their own e-readers that allow writers to push their content to eager subscribers. However, the battle currently waging is who is going to control the process flow from this point forward.

The publishing industry is counting on its enormous clout to push their agenda forward. They have already pushed back against Amazon (which has forced the others to comply) where they forced the increase in the cost of books being sold on the Kindle. You used to be able to get brand new books for $9.99, but now you’re lucky if you can get one for $12.99. The game changer in the first battle was Ken Follett’s new book Fall of Giants, which publishers forced Amazon to sell at $19.99. The backlash against the book has been interesting as Kindle users included all sorts of bad reviews for the book based on the price alone, taking what would have probably been a five or four star reviewed book down to an average of about 3 stars. What’s interesting is that his reviews on this book tend to resemble an upside down bell curve, with 301 5-stars and 327 1-star reviews, with a tiny amount filling in for 2, 3, and 4-star reviews. In other words, the critics either really liked it or really hated it, and there’s no doubt that the really hated reviews come specifically from people who are pissed off at the price.

If this was the end of the fight, you’d think that the publishers pretty much won, but like most great stories, a new sliver has been added to the mix, with writers being that added variable. Writers, realizing that they need to somehow be able to take advantage of this new technology, have started to show up sans publishers (being their own publishers), and they’re starting to include their own novels at much lower cost than the publishers are forcing down the e-market’s throat. Rather than stick it out at $9.99 (or push it up to the publisher’s price of $12.99), writers are now starting to introduce their books at the $2.99-$4.99 range, providing a more comfortable area for readers to purchase on impulse alone. Some of the more prominent writers, instead of using their fame to push for $12.99, like the gas station economic model the publishers are following (one raises the price, the rest follow), are listing their books at $0.99. According to some of the better known writers doing this, they’ve pointed out that because of the amount of people willing to buy a book at that low price, their profit has actually been better than if they tried to sell their books at higher prices. The economic implications are staggering, the more you think about it.

The biggest problems facing the writers right now is how to actually get anyone to pay attention to them in the first place. The one thing publishers have going for them was that their clout actually got books into bookstores, and without that clout, an unknown writer is essentially that, an unknown writer. If no one knows you exist, the chances of selling a book are dismal, at best. So, right now, the battle has halted, as both publishers and writers realize they’re at an interesting crossroad where both can benefit, but neither seems willing to budge. Publishers aren’t interested in giving up their high percentages they receive for “publishing” books while writers are no longer interested in giving up the entire store just to get their work out there. Which means that once writers figure out how to jumpstart the system in their favor, the whole publishing industry is going to go the way of the recording industry.

But what can a writer do to become marketable without already being a famous writer who was selling books already? That’s an important question and one that I’m spending a lot of time studying.

I’ll let you know once I figure it out.

Stop me before I buy more books! And other complaints when it comes to running a blog.

Social Networking, Writing, , , , , , , , , ,

For some reason, I’m a glutton for books. I buy them even when I don’t need them. Case in point: Today. I was at Barnes & Noble just wandering around, minding my own business, when out of the blue BAM! Another book came at me from behind and forced me to buy it. I didn’t even get to the cash register before another book, hiding behind the greeting cards and magazines jumped out WHOOSH! and there I was at the counter with two books I didn’t need. But no matter how hard I tried to get them out of my hands, they wouldn’t leave, and I ended up having to shell out another forty some bucks to the evil cash register lady for the purchase of said books.

I had actually gone into B&N looking for a specific book on Twitter information. I recently realized I had this Twitter account that I never really did anything with, so I decided I would see about optimizing Twitter to see if it might actually benefit my blog. My blog has been one of those underperforming vehicles that has been driving me nuts for some time. I write posts constantly, and I seem to have a massive amount of phantom traffic, but I’ve never really been able to do anything with my blog to make it worthwhile to me. I’m not talking about making money, like others try to do with their blogs. I’m more interested in just getting people to read my stuff, and I’m constantly struggling to do so.

Some months back, I joined Open Salon and started blogging there, and what I discovered was that if I didn’t spam the crap out of people, I really didn’t get any real traffic to my blog. And that bothered me. I decided to stop emailing people every time I wrote a post because I started to feel that it was bothering people rather than letting them know that I had more posts for them to read. I know that I have started to get annoyed at the amount of emails I get from people who post every day (and then email me every day), so I decided I didn’t want to be one of those kinds of bloggers. Unfortunately, the alternative is even worse. My blog is practically invisible as a result.

It’s partly frustrating because it kind of falls into the same paradigm problem I have with my writing career. I know I’m good at writing, but I can’t get a career jumpstarted no matter what I do. So I end up writing for myself or for the wind (or whatever other dorky metaphor fits the situation). My main blog site has been active for years, and it’s almost like I started it yesterday, judging from the amount of communication that comes across it. It’s a lot like my life these days. I get the idea no one even knows I’m alive, even though I’m still kicking and screaming. Just screaming in silence with the volume turned way down so as not to wake up the neighbors.

The Epic Battle for Your Money

Economics, Politics, , , , , , , , , , , ,

There’s an epic battle being fought these days in which the goal is nothing less than your hard earned money. Sadly enough, the only ones not benefiting from the struggle are us, the actual consumers. We’re mainly the victims, the targets and the ones who manage to keep making it so that we keep getting screwed over, cheated and abused. If it wasn’t so tragic, it would be funny.

I’m not exactly sure when it happened, but at one point we went from being consumers who were part of the system to consumers of content who are outside of the system. In the old days, maybe as recent as the 1970s, we were seen as consumers in a big triangular product cycle that started with us working for companies that produced content that was sold by businesses back to the people who were responsible for making the products. It was a closed system where people in other businesses provided products while we sold the products from our revenue stream back to them. Everyone came out ahead because we all made enough to survive, and we all got the products that everyone was making for everyone else.

But something happened that caused a real problem to the system. You see, at one point, those companies that make the products realized they could make these products without the actual consumer production staff being a part of the manufacturing cycle. In other words, they could automate the production without having to pay a production staff and still manage to create enough products to sell to those other cells of the manufacturing cycle. Except, those other cells were also figuring out how to cut out the production people so that they could automate their production and maximize their profits. After a certain amount of time, we cut out one prong of the triangle, leaving basically the profitable company management and the salespeople. However, we’ve kind of cut out the people who used to be the producers of content, figuring we can do it without them.

Unfortunately, those people were also the main consumers of the content. Without them, we end up producing a lot of product for people who can no longer afford to purchase it. This was fine as long as we were only cutting out a certain segment of the production audience, but now that everyone has figured this is the way to profitability, well, we’ve made it so that there may be too few consumers to actually participate in the broken triangle.

This was a problem that has been seen for quite some time, but big companies refused to pay attention because they were making money without very much effort, and they saw no end to it. Let’s examine that for a moment. And we’ll do it by examining the old model and then see where the new model sort of makes everything no longer make sense.

The old model of capitalism was that as long as we continued to produce products, we could always sell them for a profit. This always existed with the necessity that the consumer market was always going to be able to actual purchase the items needed. Well, what has happened is that a lot of the money that is to be made in this area has now been transferred to huge corporations that reward very few people for their efforts. Outsourcing and downsizing was inevitable as companies started to exist for the sole purpose of providing better results on stock market exchanges rather than to a people-driven profit margin. But eventually, outsourcing was going to hit a point where the native population of people within these companies was going to start suffering, with more and more jobs being lost, even though prices for products would continue to go down as the labor became cheaper through the outsourcing process.

What this meant was that one of two things would happen, and the result was really based on what ideology you believed. If capitalism was truly the victor, then the outsourcing would eventually hit a point where there is no more possible outsourcing location, so that eventually the corporations would have to start feeding back on themselves, and that would lead to consolidation to the point of where expansion would have to stop and the products being produced would fall back to a Maslowian base level of survival products rather than those that feed self-actualization. There would be no profit in leisure products, like iPads, because no one would be able to buy them any more. Instead, the main production would fall back to basic necessities as the people who still had jobs would be focusing on survival rather than leisure-like activities. The numbers of elites benefiting from the system would have shrunk so small that the luxury good market would dry up overnight. Where it would go from here is unknown as we’ve never reached this expansion end point before, so anyone can guess as to what would happen next.

The other choice is the old one of eventual communism, which is almost a direct insult to anyone who believes in corporatism and capitalism. Communism needs capitalism, however. Because once we’ve reached what’s called a saturation point (where companies have pretty much grown as big as they can become and profit is no longer profitable), then the system turns inwards, and the mass population that has been forced into corporate slavery then turns on the economic system and takes over its cogs and wheels. Their success would be in direct violation of the system, so this would probably bring on an economic revolution where the state would eventually turn into a police state where the military and police would act in the interests of business, turning on individual workers. The workers would probably suffer a number of defeats, with many deaths and even worse working conditions, until eventually they succeeded and overthrew the corporate entities that maintain control over the dynamic.

That’s if you believe either one of these theories of economics. However, what should be pointed out is that we have hit a point where people with economic clout are trying harder than ever to sell us crap we don’t need, and the crap that we do need is being put into flux, so that we are actually having to fight for these things. An example of the former is the various industries of utilities and intellectual property. Heat and electricity is pretty low on the Maslowian scale, meaning that we generally need electricity and heat. Often, the industries that hold power in these areas see themselves as a necessity and do everything possible to act like they are working in our best interest. Gas companies make really cute commercials about how the cars are all fuzzy and happy, and that they’re our friends. Meanwhile, the executives of these companies make insane profits and even when they destroy our natural resources with bad decisions on their part (like BP and Exxon), they do as little as possible to maintain their hegemonies and then try to make the problems go away by paying off only as many people as they need to do. The clean-ups in Alaska and on the East Coast have been afterthoughts, and already there have been attempts to do the least possible, while lawyering up rather than be the conscientious industries we’d like them to be. In the end, they’ll still manage to pull off outrageous profits, and the ones who were hurt the most will always be hurt the most.

The latter of those two choices (utilities and intellectual property) is even more fascinating in that the consumer isn’t even being considered a part of the discussion, even though the consumer is the one who funds pretty much everything. Organizations like the Recording Industry Assocation of America (RIAA) have been so outdated for so long now, holding onto old technology like record companies, that rather than modernize themselves as they should have done so long ago, they sue anyone they can think of, realizing that if they cast their net wide enough, they’ll manage to bring in enough profit to keep themselves going in perpetuity. The fact that they haven’t been relevant in years is rarely discussed by them; they’re more interested in maintaining a status quo that has been gone for many years now. Let’s face it. People are now getting a lot of their intellectual content (music, movies, TV, and games) for free because the Internet has made that possible. A lot of the potential customers they have lost are young people who have grown up getting this stuff for free for most of their lives. The RIAA and other such organizations should have been catering to these kids a long time ago, not slapping them with lawsuits the second they realized there was a problem already out of control. And even worse, the customer base they already had (older people like me), they abandoned by focusing on that young crowd, trying to sell the ideological equivalent of freezers to Eskimos. Had they continued to support the older class of customers, who were used to buying content from stores, they might have maintained years of profitability while slowly switching over to a model that could have catered to this younger crowd. Instead, whenever I walked into a record store, or an establishment that sold CDs, I see tons of titles that are geared towards young kids who aren’t going to buy any of the stuff because they can get it for free. There’s none of it that caters to me, and I’m sorry, but an occasional compilation CD of music I already own is NOT what anyone my age considers “catering” to me. It’s not even trying.

So, this brings me to what’s going on today. There are all sorts of people who see the rest of us as nothing but blind consumers they can take advantage of because they don’t care anything about us because they either outsourced us, or they see us only as mindless automatons who are only around to buy their junk. Google announced today that they are now going to be giving us the ability to buy books online. Basically, even though Amazon and Barnes & Noble have already done, Google indicates that it’s going to allow people to buy books in e-reader format, but then turns around and pretty much tells publishers that they’re only offering 52 percent of the profit of the books sold. Amazon and B&N have been offering closer to 70 percent profit. Apparently, Google seems to think that it deserves more of the money for a product that they did not create and basically only offer as a reading service. It’s like a tape recorder company demanding half of the profit of all music produced because it provided the tape recorder used to make the music. The only reason Google can offer this is because Google has power right now, and it will be interesting to see how the publishers respond to this insult of an offer, especially when they already have two viable processes for releasing e-reader content. Google is proving itself to be a great successor to Microsoft in all ways Dr. Evil-like.

Another story that has been making a play is also very important to this issue, and it involves reality TV stars the Kardashians, who are basically a trio of tarts who have no actual talent other than being famous for being famous. When their launch onto the public scene was through a sex tape that was sold by one of them, we really shouldn’t be expecting a whole lot more. Yet, they decided to play the profit game by tapping into their fan base and offering a misleading credit card that essentially cheats the living crap out of anyone stupid to ever use one. They’ve suddenly decided to distance themselves from the card AFTER a public outcry came out following the revelation that the card was generally little more than a massive scam, in that it does so many things that a paid for credit card should never do. In reality, the Kardashians backed away from their card because they were found out and it was going to become a headache to have to explain how they were profiting by cheating the crap out of people who were stupid enough to believe in them.

But their case is an example of what is going on today. Companies, celebrities and even governmental officials have no problem cheating the crap out of potential consumers mainly because they don’t see these consumers as a part of the original triangle I was talking about. So many people have been taken out of the equation that we’re no longer considered associates, friends or partners, but potential victims to take advantage of.

So what can we do about it? Stop buying the crap that people are selling you whenever you discover they’re part of this bad group of profiteers. Right now, we have a little bit of say in the future of where this goes, but as long as we continue to act like sheep and get taken advantage of, things will only continue to get worse, and eventually we’ll have little to no say in the matter.

My Comparison of Barnes & Noble’s Nook Color vs. the Amazon Kindle 3G

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"I love this book by Duane. I wonder if he's single."

I’ve owned a 3G Kindle for a few months now, and I’ve been pretty happy with it. However, being the tech junkie that I am, when I heard that Barnes & Noble was coming out with a color e-reader, the Nook, I took a quick look at it and then decided it was something I was willing to try out.

I blogged about my problems with buying it in the first place, specifically the dork who worked at Barnes & Noble who told me it could hook up to my computer and transfer my books that way (because I don’t have a wifi connection at home). Turns out he was full of crap, so I have to actually go to a place with wifi in order to download any of the purchases I make. Not a big deal, but a bit annoying when you were planning otherwise.

Right off the start, I have to say that the Nook looks really nice, especially in color. That, however, does bring a couple of deficiencies as well, specifically a very long download time, whereas the Kindle downloads almost instantaneously. Not a huge deal, but somewhat inconvenient. I’m sure if the Kindle had a color version, I’d be going through the same problems, although I have yet to try with a grayscale book on the Nook to see if that’s much faster.

The Nook is a lot heavier than the Kindle. Kind of inconvenient if you’re holding it up for a long time. Never really thought about that until I actually had to do it.

The biggest difference is in choice of content, and I’m really hoping that changes soon. The Kindle has so many choices of things to buy and download. When I bought the Nook, I was looking forward to all sorts of color books and magazines, but their selection is sparse, if almost devoid of content. There are so few magazines who have signed up with the Nook that I find myself really stretching myself to find something I actually want to download. But I wanted to at least see one, so I went with Consumer Reports, which costs $2.40 a month. It’s not bad, but to be honest, I’d never have bought it if it wasn’t the only choice of some content that I wanted to look at. That’s not a good sign when it comes to buying magazines.

My hope is that because the Nook Color is so new that more magazines are right around the corner thinking about signing up. But so far, on the “Coming Soon” list with Barnes & Noble’s Nook content, I don’t see any magazines planning a future launch. If that doesn’t change, the Nook is a doomed product.

So far, there are a few children’s titles that are in color, so if you have kids, it might be a decent purchase, if not a bit expensive. But there just aren’t enough. My hope, again, is that because it is so new that so few publishers have been pushing content to it, but are planning to do so in the future. If not, again, the Nook is doomed.

Price: The price of the Nook Color was $249. With a cover and tax, it cost me about $300. That’s a bit on the high side for me, even though I was willing to pay it just for the convenience of trying it out. Yeah, I’m kind of stupid that way. But if there is not more content released, I just bought a $300 paper weight, and that will piss me off.

The Kindle 3G is $189, and while there is a wifi version for $139, I had to buy the more expensive one because I don’t have wifi at home. For the extra $50, it was worth it. And the amount of content is wonderful. I subscribe to the Washington Post for $14.99 a month (think that’s the price), and it’s definitely worth it to receive the newspaper each and every morning. I had trouble finding this newspaper on the Nook, but others, like the New York Times are on it. Again, the selection was abysmal at best.

Break down:

Barnes & Noble Nook Color (positives)

It’s in color.

There is some unique content (through Barnes & Noble’s PubIt! program, which is a lot like Amazon’s self-publishing for the Kindle).

That’s about it.

This one goes to 11

Nook (negatives)

Heavy

Expensive ($249)

Not a lot of content available for it.

Battery life is pretty low in comparsion to the Kindle (massively low). A charge seems to last about 8-10 hours, according to their documentation. The Kindle lasts all week long and that’s with a lot of use. Again, that might have something to do with the color.

Downloads take a long time.

Kindle (positives)

Fast downloads.

Lots of content. LOTS of content.

Price is $139 (for wifi version) and $189 for (3G/Wifi version)

Lighter than the Nook.

Battery lasts a long time.

"It was the best of times...it was the worst of times...(line?)"

Kindle (negatives)

Not in color. That’s really about it.

******************************************

A final note is that even though I’ve said mostly bad things about the Nook, if they can get past the problem of lack of content, it can become a powerhouse in e-readers. Customers at Barnes & Noble appeared really interested in the product, and a friend of mine keeps talking great about it. But without increased content, especially content that uses color, it will fail horribly.

One area where it could shine, and is almost untouched, is graphic novels. If comic book companies would realize that they now have a way to present their work on an e-reader, and embrace the Nook, both could do a wonderful job in selling this to the most desirable market out there, the teenager/young adult market. But I’m fearing that Barnes & Noble has handled the e-reader in almost the same way Blockbuster handled online movie distribution against Netflix. It is doing too little too late. As long as Barnes & Noble continues to appear to always be one step behind Amazon, they’re going to fail horribly as a book company, which is a whole other issue itself. But it’s in online content and e-readers where the final battle for dominance is going to take place. If someone could go back and tell Blockbuster to embrace the mail market when it didn’t, it could have changed things so much against Netflix. That’s where we are with the e-reader market. Barnes & Noble has a chance to push ahead and dominate. But history tells me that the results will be so much different.

If we choose the wrong e-reader, North Korea wins!