Book news: Is Liberty's B&N bid the beginning of the end?

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201105250921 Book news: Is Liberty's B&N bid the beginning of the end?
There was some floor chatter at BEA about Barnes & Noble yesterday — although we all know Borders is not long for this world, some are suggesting that all the book chains are going to be bye-bye within two years. This despite the recent $1 billion purchase bid for Barnes & Noble by John Malone’s Liberty Media. But is Malone’s bid really about brick and mortar stores?

The Liberty Media bid has been greeted with some head-scratching among analysts and commentators. Mr. Malone, to be sure, is quite skilled in the dark arts of deal-making. He is an able negotiator, and many of his deals are quite complicated with a financial angle like tax savings. Still, it’s not clear that is the case here.

So far, most of the reasons given for the interest in Barnes & Noble center on its e-reader, the Nook. Mr. Malone implied that the Nook was a primary reason for Liberty Media’s bid at the company’s shareholder meeting on Monday. Though exact figures are unavailable, Barnes & Noble captured as much as 27 percent of the e-book market with its Nook, according to a Goldman Sachs report, and may have found a way out of the decline in storefront book selling.


With e-book sales now passing print sales on Amazon, and a new touch-screen Nook introduced yesterday, it’s easy to see why a cute little e-device would be a nice trophy on the mantle of a media mogul. But for $1 billion you could probably buy an actual device manufacturer, not just a bookstore chain.

Much more on B&N and its fortunes in the link.

Comments

  1. And yet there are people talking openly about the one-use digital device, with many “Kindle” readers actually reading on the iPad or their phone or their other tablet.

    Has there been a comparison of Nook/Kindle readership? Is there even an alternate platform for Nook readers as there is for the Kindle?

  2. Here’s a snapshot of the breakdown of reader preferences.

    http://www.adweek.com/news/press/sales-womens-magazines-boom-nook-color-131909

  3. Interesting stuff, Bill. Thanks for that

  4. I know it’s just a typo, but somehow calling it an “ice trophy” makes it sound deliciously sinister.

  5. Nook software is available for iOS and Android, same as Kindle software.

    Heidi, rather than buying “the Nook” purely as a hardware device, Liberty (and other buyers) are hoping to buy in to the established userbase and good will of the Nook. It might be easy to create a new e-reader–I think Borders is offering a half-dozen different ones–but it’s not easy to build an audience, as Sony found out to its chagrin. (The Sony eReader was technologically superior in *almost* every way to the Kindle, but it didn’t have the backing of the online world’s biggest book retailer behind it, so it never caught on.)

  6. A better way to put it is an eReader isn’t worth a whole lot without being hooked up to a very large eBook source and Sony was creating it’s bookstore on the fly. It also didn’t help that Sony was pushing a proprietary eBook format, though they eventually backed out of that.

    Yeah, Liberty’s almost certainly looking at this as buying the #2 position in eBook retailing. The Nook color significantly boosted BN’s market share. Now, that said, Amazon’s rumored to have their own color tablet on the way towards the end of the year and we’ll have to see how that plays out.

  7. Snikt Snakt says:

    “some are suggesting that all the book chains are going to be bye-bye within two years.”

    Two years?!? Wouldn’t B&N have to declare bankruptcy NOW to achieve that timeframe?

  8. R.J. Ryan says:

    I look at the B&N locations here in Los Angeles and see a pretty vital business–especially when it comes to book signings and children’s books sections. These are experiences unique to a bookstore that can’t be replicated online.

  9. Malone is no fool. He’s buying B & N for two reasons: a mercantile front end for digital media and for the Nook. But with the Nook he’s not buying an ebook reader, he’s buying a low cost tablet with a built in user base.

    For example:
    http://www.androidcentral.com/nook-color-rooted-turns-250-e-reader-affordable-android-tablet

  10. Big chain bookstores are cooked.

    Indie bookstores, which are often more tied to their communities, increasingly diversifying into used book sales, and used to operating on smaller margins, will survive.

  11. Chris Hero says:

    @Jay

    I’m not trying to be snarky, but most indie bookstores went out of business a while ago….

  12. Do I believe bookstores will be around forever? No, probably not. But 2 years? I don’t think so. We still have video stores around and chains are still selling cds for that matter. Decade? Sure but 2 years? Hell naw.

  13. Indie bookstore exist … The chains put many of the out of business. Now the Indies are appearing while the chains are going belly-up. I guess everything is cyclic.

  14. Print books and booksellers will never die, but yeah, the day of the mega-chains appears to be winding down. And all it takes is an active solar maximum, or enough recessions to make your power bill unaffordable, and suddenly electronic readers won’t look so promising after all, and that billion looks like a rip-off if the stores aren’t kept intact. Ereaders are toys of affluence, not mass market revenue generators for content provides. That’s what paper is for!

  15. Snikt Snakt says:

    Adam, where do you still have video stores?!? All the Hollywood Videos & Blockbusters I knew of are long gone…

  16. Chris Hero says:

    @Scott

    E-readers take a *very* tiny amount of electricity to charge, like less than a coffee maker. If electricity costs so much that an e-reader is unaffordable to charge, we’ll have much bigger problems because a lot of people won’t be able to afford refrigerators.

    @Anyone advocating bookstores are making a resurgence:

    Where do you live where this is happening? NYC is always an outlier for this kind of stuff….

  17. Man, those goalposts got moved so far that Pete Stoyonavitch would be hard pressed to kick the ball into the same STATE.

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