William Lynch, and Michael P. Huseby taking over as CEOof Nook Media and President of Barnes & Noble, Inc., occuredin the context of declining sales and profits at NookMedia.For the first quarter of fiscal 2014, Barnes & Noble reporteda decline in revenues of 8.5% , and a loss of $8.9 million(EBITDA), with the Nook division (which includes the devices,digital content and accessories), announcing $153million in sales for the fiscal 2014 first quarter, a decline of20.2% from the $192 million in revenue reported for thesame period in fiscal 2013. (B&N press release, 20 August2013)With the earnings report, B&N announced also to continuesupport and develop its own line of tablet devices (contraryto ealier announcements - see at CNet) and to roll outat least one new reading deveice for the 2013 holiday season.In spring 2013, has re-launched it selfpublishing platformPibIt under the new brand of Nook Press.Earlier developmentsBarnes & Noble, Inc. (NYSE: BKS) describes itself as “a Fortune500 company, is the world’s largest bookseller andthe nation’s highest-rated bookselling brand” (Statementon the company website http://www.barnesandnobleinc.com). The company’s businesses include the operationof approximately 700 specialty retail stores and morethan 600 college bookstores in all 50 states in the US; onlineretailing through its flagship website BN.com; and amarketplace leader in the digital industry through its explodingNOOK brand of eReaders, reader’s tablets, anddigital content.In 2012, Barnes & Noble and Microsoft announced thecompletion of their previously announced strategic partnershipin NOOK Media LLC, with an investment of $300million by Microsoft in NOOK Media LLC at a post-moneyvaluation of $1.7 billion in exchange for an approximately17.6% equity stake, with Barnes & Noble owning the remainingshares. At the end of 2012, , Pearson bought a 5%stake in Nook Media by investing $89.5m in cash. (TheBookseller, 2 January 2013)Barnes & Noble had received a $204 million investmentfrom Liberty Media in August 2011.In fall 2012, Barnes & Noble had brought its NOOK anddigital bookstore to the UK through a newwww.nook.co.uk online storefront. This marked the firsttime the company was expanding its business internationally.Barnes & Noble has thereupon formed partnerships withseveral British retailers, including John Lewis, Dixons,Sainsbury’s, Waitrose, Blackwell’s, Foyles and Argos, to sellNOOK HD, NOOK HD+, and E Ink devices. The company hasalso opened its European headquarters in Luxembourg.In October 2009, B&N had introduced its eReading devicebranded as NOOK, the first Android-based eReader. Oneyear later, Barnes & Noble launched NOOK Color, the firstfull-color touch Reader’s Tablet. In 2011, Barnes & Nobleintroduced NOOK Simple Touch, a full touchscreen device,followed by NOOK Tablet. This spring, Barnes & Noble introducedNOOK Simple Touch with GlowLight, the world’sfirst E Ink Reader that enables reading in the dark. And inSeptember, Barnes & Noble launched NOOK HD, the lightestand highest-resolution 7-inch tablet, and NOOK HD+,the lightest full HD tablet. The company also announcedthe premiere this fall of NOOK Video. Barnes & Noble hasan estimated 27% market share of the U.S. ebook marketand a catalog of more than 3 million titles in its NOOKBookstore.GoogleIn 2004, Google Inc. (NASDAQ: GOOG) introduced booksearches of full text and, in order to increase the amountof digitized books available for such a search, an initiativeto digitize significant numbers of printed books from publicand university libraries. Initially named Google BookSearch, Google Print, and Google Library Project, all ofthese activities are today combined under the label ofGoogle Books. As of March 2012, over 20 million bookshave been scanned, Google reports.As early as 2005, a controversy emerged between Googleand authors’ as well as publishers’ associations and individualpublishers in the US and overseas over the inclusionof “snippets” of copyrighted works. After seven years oflitigation and an initial settlement rejected in 2011 by aNew York court, an agreement has been reached betweenGoogle and the American Association of Publishers as ofOctober 4, 2012. The agreement offers US publishers theoption to either withdraw titles under copyright and scannedby Google in libraries, or to keep them in Google’sprogram and receive in return a digital copy and permissionto commercially use the scan. Furthermore, users canview up to 20 percent of a title and, provided the publisherconsents, purchase it through the Google Play shop. The86 The Global eBook Report
settlement is expected to make available several milliontitles scanned by Google (Publishers Weekly, October 4,2012). Related litigation between Google and severalFrench publishers, including Hachette, Albin Michel, FlammarionGallimard, and La Martiniere, has been settled inout-of-court agreements (Livres Hebdo, September 7,2011).With this settlement, the road might open up for the largestlibrary of digitized works to be broadly and globallydisseminated, including massive numbers of titles undercopyright, as procedures for their legal distribution, includingcommercial downloads through Google, emerge.At this point, those 20 million books are maintained by thelibrary of the Hathi Trust, a “partnership of major researchinstitutions,” funded notably by Google. Only half of thedigitized works are in English. The other half, consisting ofover half a million books in German, 434,000 in French, andover 10,000 in Ukrainian, Bulgarian, or Serbian, turn thisinto the largest and most linguistically diverse repositoryof ebooks (for a detailed discussion, see “Global ebookdistribution complexities,” November 28, 2012).While Google’s ambition with regard to books started atsearching and cataloging them based on a full-text searchand earning revenues from customized advertising in thesearch results, books have started to be included in its digitalmultimedia distribution service, branded Google Play,which includes options for purchases via Google (or, in thecase of books, various other online shops) as digital downloadsas well as through third-party online platforms forordering printed books. Google claims to have 3 millionebook titles available on Google Play, mostly free ofcharge, with hundreds of thousands available for purchase(http://bit.ly/T1FrMx).Similar to the iTunes Store, however, the Google Play Storeis currently available only in a limited number of countries,including Australia, Canada, Spain, Germany, Italy, SouthKorea, the UK, and the US. So far, Google’s policy has beento roll out book services one country at a time, often witha long interval in between (UK in September 2011, Italy inMay 2012, Germany and Spain in June 2012, France in July2012) and delays attributed to long and tedious negotiationswith publishers over rights (for the example ofFrance, see Livres Hebdo, July 18, 2012.)In 2012, Google started to venture into the device marketin cooperation with selected hardware manufacturers (inthis case, Asus) by launching a tablet computer with anAndroid operating system, branded the Nexus 7.In the second half of 2012, Google, together with Amazon,was challenged in a widely publicized debate, notably inthe UK, over its practice of minimizing local tax paymentsthrough a complex fiscal sceme across Europe (for details,see “Google, Amazon, Starbucks are immoral and ridiculousover UK tax,” November 13, 2012).In the US, Google had a long partnership program with theAssociation of American Booksellers (ABA), which it cancelledin April 2012, to expire by January 31, 2013. In themeantime, Kobo stepped in to replace Google in this regard.Kobo“Kobo’s greatest asset? It’s not Amazon”, wrote the BritishObserver in spring 2013. (The Observer, 28 April 2013.) Itis true that next to paramount players who either representthe entirety, or significant portions, of the world wideweb, there must be a niche open for a contender that isdifferent, and Kobo is busy to fill out this space.Kobo was launched in 2009 by the Canadian bookstorechain Indigo Books & Music Inc. (TSX: IDG), which wasfounded in 1996 by Heather Reisman and her husband andmajority owner Gerry Schwartz. Kobo was at first a businessdivision, meant to cater to the emerging ebook market,then spun off as a separate business entity, and ultimatelysold to Rakuten (JASDAQ: 4755), the largest e-commerce company in Japan. Rakuten has recently seenaggressive and forceful global growth by acquiring multiplerelated online marketplaces, notably Buy.com (US), Priceminister(France), Ikeda (now Rakuten Brasil), Tradoria(now Rakuten Germany), and Play.com (UK), as well as aninvestment in the leading Russian online bookshopOzon.ru. Rakuten has reported revenues of $4.7 billion for2011. In 2012, and after the acquisition of Kobo, Rakuten’shead, Hiroshi Mikitani, has announced plans to confrontAmazon in a competition on global e-commerce (quotedin Handelsblatt, January 22, 2012).Kobo claims to be “one of the world’s fastest-growingereading services.”By late summer 2013, claims to have sold ebooks from itscatalogue of 3.5 million books and magazines into 190countries, with its devices supporting 68 languages. As ofSeptember 2013, Kobo has expanded beyond Canada,where in 2012 it controled a market share of 46%, accordingto Ipsos, by establishing localized platforms in Brazil,France, Germany, Indonesia, Japan, the Netherlands, Por-The Global eBook Report 87
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ContentsAbout the Global eBook Repo
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Receptiveness for foreign (English)
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Produced in Atlas by O’Reilly Med
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Mapping and Understandingthe Emergi
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publishers’ agreement with Apple
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January 18, 2013; “Un rapport env
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1980s, global cities in the 1990s,
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The ambitions, and thelimitations o
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Metadata is the key to online sales
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English Language eBookMarketsThe fo
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Overall, the spectacular growth in
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hit (source: various reports summar
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Debates Shaping the Book Industry i
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Contributed article BookwireAvailab
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GermanyKey Indicators Values Source
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than 10% of all online sales by the
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warm at best, and the half-year res
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SNE had earlier started to systemat
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- Page 57 and 58: Source: Vesselin Todorov, Ciela Nor
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