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Why Barnes & Noble, Inc. (BKS) Can’t Combat the Disruption

Barnes & Noble failed to be proactive in the market, and instead we found management reacting to the disruption of the book distribution model. The company had to create an entirely new digital infrastructure to compete whereas Amazon simply capitalized on its already existent deep content portal.

Going the way of the Betamax

The most disappointing thing about the recent memos sent out by Barnes & Noble is that Nook sales include both hardware and eBooks. Even with a lack of hardware sales, the growing number of eReader users still aren’t using to buy new eBooks.

The Nook is becoming the Betamax of the digital reader industry. Hardware sales are declining and content sales aren’t softening the blow. It’s hard to see the company making a turnaround in 2013, but I’ll be listening to their earnings call later this week to see what they plan on doing to address the issues facing the struggling business segment.

The article Why Barnes & Noble Can’t Combat the Disruption originally appeared on and is written by Adam Levy.

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