Along with releasing their quarterly report on Wednesday, Barnes & Noble held an earnings call with analysts. (You can find the entire text over on Seeking Alpha.) Here are some of the highlights from the call:
A new focus on the education market
Barnes & Noble has confirmed my two week old story that they have a new focus on serving college students:
Barnes & Noble is a leader in the collegiate market, and we plan to aggressively leverage this knowledge and experience to innovate and become the leader in digital education. Our education applications are approaching their initial release. We’re planning to have a soft launch of our product prior to the end of the fiscal year to allow for testing and updates and plan a broader launch ahead of the 2014 fall back-to-school season. We will leverage our almost 700 campus bookstore relationships, which encompass 25% of the U.S. higher education student and faculty base, to bring the product to market. Our offering will also be available via a national website to students who are not served by a Barnes & Noble College bookstore and want a leading-edge digital learning experience. We believe that our educational applications will become the most innovative and demanded educational platform.
That inaccurate Business Insider story about the Nook hardware team getting sacked had a grain of truth. Or rather, the followup story from the NY Times was correct when they reported that B&N had gone through a major layoff:
This workforce reduction resulted in the elimination of approximately 75 positions. Thus far, charges associated with the recent reduction in force were approximately $2.4 million, which include benefits and severance arrangements, which will be recorded in the fourth quarter of fiscal 2014. Since fiscal 2014 began, approximately 190 NOOK positions have been eliminated both through reductions and attrition.
Barnes & Noble confirmed in the Q&A section at the end of the call that Nook Media has a staff of around 500 people.
B&N is still claiming ownership of their Windows-only international Nook Store, even though it is showing every sign of being a Microsoft demesne.
(Huseby): As I said in my remarks, we have a very valuable digital content catalog, and we’re also in the process in connection with our work with Microsoft, to building an expansive international content catalog. We’re in over 30 countries and when a — we can leverage that content catalog that we’re acquiring as we pursue these partnership opportunities with other technology companies and put that content on their platforms.
A New Tablet
And last but not least, B&N has a new tablet in the works:
And I’m pleased to announce that in early fiscal 2015, we expect to launch a new NOOK Color device in collaboration with a third-party partner.
All signs point to this being another consumer tablet, but at least this time around there’s chance that B&N won’t commit to buying too many untis which they cannot sell.
Shelf Awareness reported yesterday that B&N is claiming 20% of the ebook market. I can’t find that detail, but even if I did I would not believe it.
B&N sold $57 million in digital content last quarter, including video and apps. I don’t have market data to compare that too yet, but I do know that in the period from November 2012 to January 2013 the AAP tracked ebook sales stats which were worth over $300 million, by my estimate. And since they were only tracking about half of the ebook market, the actual ebook market value was probably well over $500 million for that period. If we simply assume that the 3 month period in late 2013 and January 2014 is equal in size then B&N has something closer to 10% of the ebook market than 20%.