Nook Redux: Is B&N Shooting Itself in the Foot?

After Barnes & Noble bled serious cash trying to create its own Nook e-reading tablets to compete with Amazon’s Fire and Apple’s iPad — eventually, scrapping most of the Nook-building unit — I figured it was pretty much down for the count. The announcement in June of its deal to let Samsung give select tablets the “Nook” brand seemed more like a cry for help them a business decision that had much chance of success.

I have to admit that I utterly missed how important this little summertime move really was, and will prove to be, not only for Barnes & Noble, but also for Apple, Amazon, and maybe even Samsung.

Nutty for Nook

I’ve encountered just a handful of Nook owners, but all have loved their Nooks. They liked Barnes & Noble. They were fiercely, surprisingly loyal for reasons I didn’t fully understand.

For my personal e-book reading, I turn first to Amazon. The Kindle experience — despite being hindered by the lack of in-app purchase ability due to Apple’s unflinching need for a 30 percent cut of sales — is fantastic.

For some e-books, I turn to Apple’s iBooks, which I also appreciate greatly. So that’s two e-book outlets that work great. Why should I learn and mess with another reading device or set of apps? Especially when I can get most movies and TV via my Apple iPhone and iPad, or my Amazon Kindle Fire and Fire TV? Especially when Amazon Prime gives me fast shipping on more physical products than I can count, as well as access to a library of TV shows and a sprinkling of decent movies, at no additional cost?

The point is, Amazon and Apple were squeezing Barnes & Noble in the digital space because they just did everything at least as good, if not better, with a broader range of products and services. I’m a busy person — I just didn’t have the mindshare to spend on Barnes & Noble.

That doesn’t mean Barnes & Noble is knocked out, though — not at all. Surprisingly, I’m impressed by what the Samsung Galaxy Tab 4 Nook could accomplish.

Getting Back Up

On the surface, the Samsung Galaxy Tab 4 Nook is a barely branded Galaxy Tab 4 that is bolstered by coming with the Nook app experience, connected to Barnes & Noble’s media offerings. It even says “Samsung” on the front and back. Nowhere, not even painted on, does it say “Nook.” How can that possibly work?

Frankly, it works by removing doubt about buying into an underdog’s hardware technology. Nook lovers might have continued to buy new Nooks, but new customers? Not so much.

Samsung has smartphone and tablet street cred — so much so that customers who aren’t all that in tune with consumer technology recognize that Samsung is one of the leading brands in the space.

Throw in the US$179 price point, and it’s a great deal for someone who wants a rich e-book reading experience with the ability to watch video as well as dabble with some other apps. Not every buyer cares that Apple has hundreds of millions of apps or that Amazon has more products than a human could count in a decade.

Nor does every e-book reading consumer care about a turbo-charged device — the Samsung Galaxy Tab 4 Nook is clearly not a high-end tablet.

The Retail Experience

Here’s where this new Nook gets really weird.

In retrospect, I think one of the reasons Barnes & Noble was able to sell as many Nooks as it did was its retail stores. While nowhere near as cool as a big independent bookstore with lots of cobwebs and character, Barnes & Noble environments are still sweet for book lovers.

In addition, there’s something comforting about being able to walk into a store and buy something concrete with a human interaction. Apple, of course, has made major headway with this tactic, building hundreds of Apple Retail Stores around the world. Heck, Microsoft even started copying the tactic.

Amazon doesn’t have this, so this brick-and-mortar distinction gives Barnes & Noble a chance to maintain its own chunk of the market, if not grow it.

Unfortunately, Barnes & Noble announced in June that it would split off its Nook Media business unit from the Barnes & Noble unit by early 2015 — so what gives?

That plan to split the businesses remains the same, according to Mahesh Veerina, president of Nook Media’s consumer business.

Is this a two steps forward, one step back sort of strategy? Or a one step forward, two steps back mistake?

I find it baffling.

Side Effects for Apple, Amazon, and Samsung

Meanwhile, even a smattering of digital success for Barnes & Noble helps ensure some market equilibrium — though Amazon’s aggressive pricing models likely will continue to be a thorn.

More to the point, having another option for consumers to get movies and TV shows may reduce the power and influence of Apple and Amazon, which might embolden content providers — not the least of which are authors and the movie and TV industries — to refuse to play by Amazon’s and Apple’s rules.

Ironically, a stronger Barnes & Noble or Nook Media might actually allow Amazon to continue to dominate, much like Apple was able to dominate various market segments because viable competitors existed.

Back to Barnes & Noble’s Efforts

The Samsung Galaxy Tab 4 Nook is just an e-reading tablet at its heart, and it won’t solve all of Barnes & Nobles challenges. It’s hard to see how Nook Media could build a serious digital following if the business is kicked out of the Barnes & Noble stores.

I didn’t pose a series of psychological questions to the Nook users I’ve run into, but I got the impression that they came from a more traditional paper-based reading background that placed value on the in-store experience, which is what drove them to buy Nook in the first place and keep their Barnes & Noble relationship going.

If you remove the physical nature of Barnes & Noble, I have a hard time seeing much of a growth play for Nook Media — it all comes back to other bigger and better players in the space, namely Amazon and Apple.

Instead of being an anchor stuck in the mud to the boat that is Barnes & Noble, the new Nook has the potential to become a paddle to build a richer everywhere experience for Barnes & Noble — but it seems as if Barnes & Noble is getting ready to toss the paddle overboard, too.

I don’t envy Barnes & Noble’s challenge, but the B&N story gets even weirder. Earlier this month, it partnered with Google to enable same-day deliveries from local Barnes & Noble stores through Google Shopping Express. The service is available only in a few cities, but it connects the physical book world to readers who are living in a bring-it-to-me on-demand world.

The arrangement with Google was a test to gauge whether Barnes & Noble could use its online reach to improve sales at its physical stores, CEO Michael P. Huseby told The New York Times.

“It’s our attempt to link the digital and physical,” he said.

If that’s the case, why not make it possible to use a handy new Nook device to let a customer have the option to order a physical book for same-day delivery? Even if people who read e-books end up preferring digital editions, some books they want to read on paper, to keep, to put it on their shelves at home. I don’t think this number is huge, but such a strategy builds and connects — it maintains Barnes & Noble as a relevant brand to consumers.

The best case scenario here? Maybe the new Samsung Galaxy Tab 4 Nook will be successful enough to cause Barnes & Noble to rethink its plan to split itself up. It’s hard for me to see a future Barnes & Noble or Nook Media rising up on its own to stand tall among far more inclusive competitors.