Covered by the New York Times earlier today, Barnes & Noble announced a 60 percent drop in revenue year-over-year within the digital content division of the company. This section of the company includes all current Nook hardware as well as digital sales on the e-book market. In addition, executives within the company mentioned that Barnes & Noble’s portion of the e-book market has fallen to 20 percent. Barnes & Noble originally snagged 25 percent of the market when the first Nook e-reader was released during 2009, but that figure has continued to drop over the past few years due to competition from Amazon.
According to the press release, Barnes & Noble executives attribute the loss of digital sales to the lack of new hardware during 2013. Referencing the difference, CEO Michael P. Huseby said “Sales in the NOOK segment declined year-over-year largely because during the previous holiday season the company introduced two new tablet products, while no new tablets were introduced this year.” According to Huseby, the company is looking into new partnerships with device manufacturers that could lead to new developments in the Nook line of devices.
It’s likely that Barnes & Noble is having a difficult time competing with Amazon’s significantly discounted prices as well as programs like the Kindle Lending Library that allow Amazon Prime users to check out one book each month for free rather than paying for it. Interestingly, sales at brick-and-mortar stores only declined by approximately 6.6 percent year-over-year. In addition to hard cover and paperback books, this figure includes sales of games, toys, educational items and other popular gifts.
Book publishers are heavily dependent on Barnes & Noble to showcase new releases, specifically because the company is the largest remaining bookstore chain in the United States. The second largest brick-and-mortar bookstore chain, Borders, closed during 2011 due to lack of sales. Not surprisingly, Barnes & Noble acquired Borders’ trademarks and the old Borders site now redirects to BarnesandNoble.com.