I’m not the first person to write an article talking about the recent fiscal 2013 year-end earnings report from Barnes and Noble. But people who decry B&N’s loss as another nail in the coffin of bookstores everywhere are missing the lead.
Don’t get me wrong, Showcasing is kind of awful and it doesn’t help bookstores at all. But it’s not showcasing or Amazon killing B&N. It’s the Nook.
Don’t believe me? Look at the numbers:
Sales
Retail $ 947,677 1,052,533 $ 4,568,243 4,852,913
College 252,295 227,891 1,763,248 1,743,662
NOOK 107,950 163,617 776,237 933,471
Elimination (30,901 ) (64,331 ) (268,723 ) (400,847 )
Total $ 1,277,021 1,379,710 $ 6,839,005 7,129,199Gross Profit
Retail $ 259,304 329,353 $ 1,397,859 1,452,804
College 76,131 69,781 405,076 395,311
NOOK (107,000 ) 999 (122,293 ) 68,065
Total $ 228,435 400,133 $ 1,680,642 1,916,180Selling and Administrative Expenses
Retail $ 208,244 262,244 $ 1,023,633 1,130,311
College 72,341 69,600 293,618 279,364
NOOK 69,895 77,988 353,125 329,777
Total $ 350,480 409,832 $ 1,670,376 1,739,452EBITDA
Retail $ 51,060 67,109 $ 374,226 322,493
College 3,790 181 111,458 115,947
NOOK (176,895 ) (76,989 ) (475,418 ) (261,712 )
Total $ (122,045 ) (9,699 ) $ 10,266 176,728Net Loss
EBITDA $ (122,045 ) (9,699 ) $ 10,266 176,728
Depreciation and Amortization (55,725 ) (58,968 ) (227,134 ) (232,667 )
Interest Expense, net (9,510 ) (8,629 ) (35,345 ) (35,304 )
Income Taxes 68,639 20,381 97,407 25,600
Total $ (118,641 ) (56,915 ) $ (154,806 ) (65,643 )
As you can see from the above, Retail and College are actually doing alright. The problem is that B&N is taking such a bath on NOOK that it’s dragging down the rest of its business.
Why is Nook failing?
In short it’s because Barnes and Noble is trying to be a better Amazon than Amazon is and they’re not going to succeed at that. Amazon is just too far ahead in that space.
Nook was not ever going to be sufficient to let B&N compete in Amazon’s space with Amazon. As a result the retail and college segments have to carry the losses posted by the (expense heavy) hardware and the not-particularly profitable ecosystem of the Nook.
What should B&N be doing instead?
Barnes and Noble is doing one thing right by cutting back on the Nook tablet business, contracting out development of co-branded tablets to a third party. I’d go a step further and also do the same with the black and white e-readers but they’re a dying technology to begin with.
What B&N should be doing is concentrating on ways to increase foot traffic into stores and ways to get those walk-ins to buy.
And I’m going to suggest something crazy – B&N should be looking to the model of smaller, local shops for a way forward.
Establishing smaller stores in high traffic urban areas, populating those stores with educated and engaged sales staff (and putting some of that staff on the floor) and then giving local stores control over at least 50% of inventory so that the stores have diverse content could help with this.
If people are going to showcase anyway give them the opportunity to do so more easily – but then put a friendly and well-read salesperson right there to try and convert that cover search into a book buy on the spot.
You know, add value.
In part one I talked about the importance of brevity and of establishing stakes. Today I’ll pick up this discussion of making writing thrilling by looking at hooks and then will talk about the traps that a writer can fall into when they try to write thrilling and forget to write well.
Hooks are deceptively simple. They’re little bits of text whose whole purpose is to make you interested in the story. Here’s an example of
A hook doesn’t have to come at the end of a chapter. Here’s an example from one of Butcher’s
Yesterday I talked about Pacific Rim and its masterful use of stakes to increase tension. However an action blockbuster movie has a lot of other tools available to create a thrilling atmosphere that an author just doesn’t have. (We can’t use sound editing to produce a boom and our explosions have to be made of orderly rows of print.)
This is a matter of prose styling and this one goes back to Hemmingway. Because you know what’s another really thrilling little book? 



Ever meet a book that can break your heart? This is one of them. My immediate response to the story is that it reminded me, in the telling, of Le Guin. There was a similar ephemeral quality to the prose.
Fair warning: this one is a little difficult to track down.
I’ve got a soft spot for a coming of age story and this one is a doozy.
Ok, this one is stretching the definition of fantasy a bit in that it’s a historical novel written in Ming Dynasty China. It is, in fact, one of the earliest true novels ever written anywhere and more people should read it for that reason alone. Happily a
Returning to the present day, Above is another Young Adult entry on this list. This unapologetically Torontonian story (you can even see the CN Tower front-and center on the cover) plays out similarly to some of the works of Neil Gaiman as it tracks the slightly magical outcasts who live in the catacombs beneath the city.