B&N Announces In-App Purchases for the Nook App Store

nook-hd-plus-xl[1]Barnes & Noble is still casting about for a way to turn around their faltering hardware program, and today they hit upon the idea of in-app purchases. Android apps sold through the world's 29th largest app store will soon gain the ability to sell additional content and game upgrades from inside the app. The new service will be supported by mobile payment provider Fortumo, and according to the the announcement this will be available "by first half of April". Yippee.

Do you know what? I bet B&N tested this in front of a focus group. I bet that B&N asked what was the least attractive feature, and after the focus group complained about the locked down nature of the Nook platform I bet B&N ignored them (what do customers know, anyway) and then B&N decided that what the customers really wanted was in-app purchases.

Never mind that the Nook App Store still has fewer than 10,000 titles, a number which is best termed as pathetic when compared to iTunes, Google Play, or even the Amazon Appstore (50k apps as of Sept 2012).

Barnes & Noble is probably expecting this to boost revenue, but one thing they seem to have forgotten is that hardly anyone is buying Nook hardware. Maybe B&N should do something about that first?  I don't know, maybe B&N could give customers a reason to pick Nook hardware over competing Android tablet.

B&N could, for example, allow customers to install Android apps downloaded from other websites. But this is probably something B&N will never do (they want to profit from their captive app store).

About Nate Hoffelder (11371 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader: "I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

11 Comments on B&N Announces In-App Purchases for the Nook App Store

  1. Actually this is a very good move given that most Android app revenue is driven by IAP. It gives a large number of developers a chance to monetize while developing “free” apps.

    • But if there aren’t very many people buying Nooks in the first place then how many do you think will be buying content inside apps?

      • The entire point of this is to get the “free” apps into the shop. Most “free” apps on GPS that are grossing highly are doing so because of IAP – even big companies like EA are starting to move to a microtransaction system instead of at-purchase payment. It’s clearly the shape of things to come for mobile apps, so if BN wants to remain competitive they have to offer the system. On top of that, people whine less about the lack of “free” apps in the NOOK store.

        It also lets BN beef up their content catalogue. From personal discussions with the Comixology team I know that they looked at getting their app onto NOOK but decided against it because there was no method for them to monetize easily (they sell their comics through IAP). There are all sorts of other examples of major developers who extensively use IAP, from Zynga to Rovio.

        And the NOOK platform still has a (relatively) large install base. Even with a poor holiday sales season they’re still the number five worldwide tablet vendor according to the IDC estimates, and Chitika still pegs them as having a bigger install base than most of the other Android OEM’s. There’s no reason for BN not to do so.

        • Yes, this move will let Adobe Reader into the Nook App Store /sarcasm.

          Sorry, but no matter how everyone pitches this as a good idea it is still crippled by the Barnes & Noble app approval process. It took B&N something like 7 months to approve the Overdrive app. I was told it had been submitted in March 2012, but it wasn’t available in the Nook App Store until October 2012.

          That, and the limited number of customers, leads me to doubt that today’s news has much value.

  2. From an ebook developers POV: the B&N apps are notoriously bad at rendering content that is more than just straight text. I’m curious how many of their 10,000 titles fall into straight-text only category. Thinking that a lot do, but when you consider that apps on color tablets can support so much more, it’s a shame they didn’t put more into the development of their app.

    • You’re talking about the reading apps for non-NOOK platforms.

      This is about the Android apps that you can purchase and use on a dedicated NOOK tablet device.

      They have literally nothing in common.

  3. This is a good move. Most of the biggest apps in the Google Play store are freemium.

    Now the NOOK app store will be able to support this model, and you should see a consequent increase in free apps in the store. Not only that, but there is a potential for partnerships with retailers.

    Walmart has an app in the NOOK Store. Let’s say you let Walmart preload its Walmart app in the NOOK. That’s a good incentive to get Walmart to push the NOOK, to let them turn NOOK into a Walmart storefront. Same with Target and other retailers.

    I’m not saying that it’s enough, but it’s a good move in itself.

  4. “Barnes & Noble is probably expecting this to boost revenue, but one thing they seem to have forgotten is that hardly anyone is buying Nook hardware. Maybe B&N should do something about that first? I don’t know, maybe B&N could give customers a reason to pick Nook hardware over competing Android tablet.”

    That is actually pretty off base. The hardware is fine; in fact, better than average. Insofar as people complain it’s about software and apps. Everybody knows that its the ecosystem that sells the hardware nowadays.

    • How is it off base? B&N reported poor holiday sales and even took a $60 million write off for unsold hardware. I agree that the hardware is great but B&N has so much unsold stock that they are currently running a BOGO sale.

      And your point about the ecosystem is valid, but what you missed is that the Nook ecosystem (more specifically the Nook App Store) is limited when compared to what you can do with the average Android tablet. IMO that is why B&N is seeing disappointing hardware sales.

      • They are putting a band-aid on a gushing wound.
        This is two years late, for starters.
        Second, I doubt many publishers are going to even pay attention until the actually set upp their system.
        Third, when they do pay attention, they’ll likely look at the size of the Nook installed base and pass.

        Nook has bigger problems to address than this.
        The’re doodling on the margins instead of tackling the big issues head-on.
        BOGO sales, fighting with S&S, tweaking a rotting corpse of an app store… Those are all fringe issues. It’s as if they’re in denial that their fundamental assumptions about their rolle in the industry and the value of their products are all completely wrong.
        They need major surgery and a complete redirection of their efforts instead of looking for ways to squeeze nickles out of the few developers willing to jump through their hoops to be listed in their tumbleweed store.

      • I can agree that there are problems, very serious problems. They’re probably going to have to open up the platform to compete. I don’t see how you can avoid it.

        I just don’t agree that it’s a “hardware problem” in the sense that the devices are no good. All the NOOK devices have very nice screens, for example. And yes, the ecosystem, on the app side is rather limited, which is why they might have to open things up.

        As for what NOOK should do. One thought I have is that I think we’re seeing a further differentiation in the tablet market. There is now a “low, low end” tablet market, beneath the $199 Nexus 7 and Kindle Fire. I’m talking about off brand stuff, like Digital Land, going for $120 and less, a market category that grew rapidly this year.

        According to quarterly report, NOOK actually sold twice as many devices as they did the year before during Thanksgiving weekend. This was early on when they slashed NOOK Color and NOOK Tablet devices to clear out inventory for their new line. The point is, they did well when they moved downmarket, when they were competing with Digital Land and a bunch of other no name tablets, avoiding going head to head with Kindle and Nexus.

        Perhaps it was almost a mistake to fully refresh the line with the NOOK HD. Maybe a better response would have been just to tweak NOOK Color and NOOK Tablet and slash prices. It would be tough going margin wise, of course, but that’s what you have to do to be competitive.

        P.S. As for the NOOK installed base, it’s still, as of right now, one of the largest in the world. They had a bad three quarters, but a big head start before that. I would guess anywhere between 7-11 million. I say this based on various shipment figures I’ve read: IHS iSuppli saying that 4 million NOOK Colors shipped in 2011, and Forrester claiming, as of October 2012 that some 5 million NOOK Tablets had been sold. Assuming another 1-1.5 million NOOK HDs and HD+ in total. That’s not including e-ink devices.

        That’s probably not enough if you want to lock down the device and allow people to only buy apps from your store. So I agree, they need to open things up. It’s not too late to turn things around if they make some good decisions.

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