Barnes & Noble's Nook revenues plummet 20%, new products still planned
Barnes & Noble reiterated its commitment to the Nook Media business after the digital unit reported fiscal first-quarter revenues of $153 million, a 20.2 percent year-over-year decline.
Barnes & Nobel offers a range of apps and tablets for its Nook business.
Nook Media tablet, e-reader and accessory sales plunged 23.1 percent compared to a year ago, while digital content sales fell to $69 million, a decline of 15.8 percent. Barnes & Noble blamed its struggles on lower device unit sales as well as dwindling reader enthusiasm for the Fifty Shades of Grey and The Hunger Games trilogies--excluding the impact of those two series, digital content sales decreased 6.9 percent.
"Our top priority in our operating strategy is to increase all categories of our content revenue," said Michael Huseby, Barnes & Noble president and Nook Media CEO. "We are working on innovative ways to sell content to our existing customers and are exploring new markets we can serve successfully. The company intends to continue to design and develop cutting-edge Nook black and white and color devices. We will continue to offer our award-winning line of Nook products… At least one new Nook device will be released for the coming holiday season and further products are in development. All Nook devices will continue to be backed by world-class pre- and post-sales support in Barnes & Noble stores, as well as ongoing software upgrades and improvements to the digital bookstore service."
Barnes & Noble kicked off its Nook e-reader line in 2009, and in late 2011 introduced the Nook Tablet, touting a wealth of e-books, mobile applications and HD video content in its bid to rival Amazon's (NASDAQ:AMZN) Kindle Fire as well as Apple's market-leading iPad. The company has sold more than 10 million Nook tablets and e-readers to date.
This past June, Barnes & Noble opened its Nook e-reader platform to third-party electronics manufacturers, a move to limit overhead costs and reduce its losses in the competitive tablet segment. Going forward, Barnes & Noble will team with not-yet-announced manufacturers to develop and distribute co-branded Nook color tablets--the bookseller also will continue to develop dedicated black-and-white Nook e-reader product lines.
Barnes & Noble's total quarterly revenues fell 8.5 percent to $1.3 billion, and net losses climbed to $87 million from $39.8 million a year ago. The company announced that Chairman Leonard Riggio has halted plans to purchase Barnes & Noble's retail locations and take them private: In an amended SEC filing, Riggio said "While I reserve the right to pursue an offer in the future, I believe it is in the company's best interests to focus on the business at hand. Right now our priority should be to serve the more than 10 million customers who own Nook devices, to concentrate on building our retail business, and to accelerate the sale of Nook products in our stores, and in the marketplace."
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