Barnes & Noble Revs Up E-book Strategy
Book retailer Barnes & Noble, Inc. is expanding its
e-book program with the launch of a new
e-bookstore and upgraded proprietary Palm OS-based eReader e-book device. Barnes & Noble calls the new e-bookstore the “first phase” of its digital strategy.
Barnes & Noble’s e-bookstore allows access to more than 700,000 titles at $9.95 each, which the retailer says makes it the world’s largest e-bookstore. Barnes & Noble intends to increase the selection to more than one million by next year, encompassing every available e-book from a major publisher and e-book original.
In addition, the new e-bookstore includes more than 500,000 public domain e-books from Google, free e-books for new eReader users, a free iPhone/iPod touch app, and a strategic partnership with
Plastic Logic, which provides an eReader designed for business professionals.
In March 2009,
Barnes & Noble acquired e-book retailer Fictionwise, developer of the eReader device. At the time, Barnes & Noble said the purchase was part of a larger digital strategy and that it would open an e-bookstore later in the year. Barnes & Noble also launched a new
interactive blog feature in April 2009 as part of its digital strategy.
E-book sales appear to be on the increase and may pose a threat to the performance of traditional book sales. Amazon, the presumed current leader in the e-book space, does not release specific sales figures of its Kindle e-book downloading and reading device. However, in a note to clients, Citigroup previously estimated Kindle-related revenues of $153 million in 2008, $429 million in 2009, and $1.2 billion in 2010, off the strength of 500,000 1 million, and 3.5 million unit sales for those years, respectively. These forecasts are based on comparisons to iPod adoption rates and Kindle pricing. Amazon
released version 2.0 of Kindle in February 2009 More recently,
Amazon purchased Lexcycle, developer of the Stanza e-book reader application for the Apple iPhone and iPod Touch devices, in an effort to tap into the expanding iPhone and iPod customer bases for its e-book business.
In addition, Google announced last month it would
directly sell electronically formatted books. Currently, Google enables publishers to provide it with digital files of new and out-of-print books. Users can search up to 20% of the books’ content, then follow links from Google to online retailers to buy them.
Chief Barnes & Noble rival Borders
has offered e-books and the Reader Digital Book device in partnership with Sony since 2007. Borders is also pursuing a digital strategy, offering an
interactive blog for science fiction fans, as well as a
Facebook page [reg. req'd.] dedicated to readers of young adult books and graphic novels. Furthermore, Borders communicates with customers
via the Twittersocial networking site.
Recent Q1 2009
financial reports from both Barnes & Noble and Borders imply that Americans are not reading as many traditional books as they used to. Lagging performance for both retailers, including net losses and total sales declines, continued from fiscal year 2008. In the face of this harsh fiscal reality, Barnes & Noble and Borders will likely continue to ratchet up their digital activities, and new rivals like Google will keep popping up if the two biggest U.S. book retailers find success in the e-world.
