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Interview with Jeremy Greenfield, Editorial Director, Digital Book World

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Interview with Jeremy Greenfield, Editorial Director, Digital Book World Interview with Jeremy Greenfield, editorial director, Digital Book World For podcast release Monday, September 8, 2014 KENNEALLY: An auspicious setting and the unveiling of a possibly revolutionary device – it could be a make or break moment in the company’s history. No, we’re not speaking of tomorrow’s much anticipated announcement by Apple from the very same venue in Cupertino where Steve Jobs dramatically unwrapped the Macintosh exactly 30 years ago. Instead this was New York City, at the flagship store of Barnes & Noble. Welcome to Copyright Clearance Center’s podcast series. I am Christopher Kenneally for Beyond the Book. In August, the nation’s last standing bookstore chain presented for the first time the latest edition of the Nook e-reader, its first new tablet in over a year. B&N has committed to purchase one million of the e-readers from partner Samsung, but Jeremy Greenfield, editorial director for Digital Book World, wonders why anyone else would want to buy one. He joins me now from his Manhattan office. And welcome back to Beyond the Book, Jeremy Greenfield. GREENFIELD: Thanks, Chris. Great to be here. KENNEALLY: Well, we’re looking forward to chatting with you about this because there have been a number of recent announcements from the e-reader world. This one caught our eye, if for nothing other than its rather long four-barreled name. It’s the Nook Samsung Galaxy Tab 4. Tell us what this device is and what Barnes & Noble is hoping to accomplish with it. GREENFIELD: It’s essentially a next generation Samsung Android tablet with a few extra features that supposedly enhances the reading experience for those who want to read e-books on it versus do other things tablet do. And Samsung has been very successful with this strategy. It has mid-sized products called phablets, which are somewhere between a phone and a tablet. It has products that are geared specifically toward business. And now it has one that is geared specifically toward reading with Barnes & Noble. The question that I have is how much is this going to move the needle for Barnes & Noble? This product doesn’t need to be a runaway success for Samsung to benefit from it. It just needs to find a small niche market. But for Barnes & Noble, which had at one point much larger ambitions in the tablet marketplace to be successful, I think it needs to find a wider acceptance. KENNEALLY: Well, indeed, and there are a lot of questions here. And let’s remind our audience about what its ambitions were at Barnes & Noble just a few short years ago and what had changed. GREENFIELD: So Barnes & Noble had its own tablet business. In fact Barnes & Noble was one of the original tablet makers, depending on what you consider a tablet, with the Nook Color. It was a color e-reader that a lot of people had jail-breaked, as it were. They sort of broke it open and used it in ways that were not intended by the original manufacturer to become a tablet. It could look at e-mail. It could be a Web browser. And then Barnes & Noble went into producing the Nook tablet, which by all accounts was a massive failure. And the company shut down the program last year. Since then, it has partnered with Samsung on creating a new tablet program because it was unable to sustain the level of investment and competition that was necessary. Really, the turning point for Barnes & Noble was about a year and a half ago over Christmas, when it sold fewer tablets than in the previous year, which really ran counter to everything that we had seen from all other tablet manufacturers. Samsung was booming. Apple was booming. Asus was booming. All the other players were selling more tablets, except for Barnes & Noble, which sold fewer. And the company, I think wisely, decided to exit that part of the business. KENNEALLY: Right. But it’s not a business they can exit entirely. A bookstore chain like Barnes & Noble has to concede the fact that digital book reading is here to stay, and they want to be a part of that marketplace. And so what I’ve read they’re trying to do is to leverage what they consider to be the Barnes & Noble advantage. And what exactly is that? GREENFIELD: So Barnes & Noble has what it calls the Barnes & Noble advantage, which is that you have your Samsung Barnes & Noble Nook tablet. And if you want help with the tablet, not just from a person sitting hundreds and hundreds or thousands of miles away or someone on the phone, but an actual real life person or you want book recommendations, Barnes & Noble invites you to go to one of its 700 or so stores and talk to a real live person. And these booksellers that Barnes & Noble has in its stores have been trained, apparently, to deal with these kinds of requests – you know, helping with the technology itself and also with the kinds of book that you can read using the Nook platform, which – because it has such a huge catalog, just like all the other major players – is millions and millions of books. KENNEALLY: Well, indeed. And the price point, I understand, for the Nook Samsung Galaxy Tab 4 is $179, which compares rather favorably to iPads. Of course they’re not equivalent devices, but an iPad is going to start you at about $299 and go up from there. And so it’s attractive that way. There’s a package of content that comes with it and some store credits and so forth. So we know that Barnes & Noble is putting a lot on this. What about Samsung? You mentioned how they’ve been broadening their reach by going into niche marketplaces, and so this is just another niche to add to that quiver. GREENFIELD: Absolutely. And Samsung could very well partner with an ESPN or Sports Illustrated on a sports focused tablet or with Conde Nast on a lifestyle or fashion focused tablet if it deemed necessary and easily create software around those different verticals, just like it has for reading and Barnes & Noble. That makes the experience a little bit better and sort of creates a new marketing and distribution channel for the Samsung hardware product. So if Samsung sells a million of these tablets, that would be a nice little successful niche that the company develops through Barnes & Noble. Unfortunately, a million tablet sales for Barnes & Noble really probably won’t move the needle all that much for the company. It’s not a tremendous amount of revenue compared to the size of the company. And it’s likely a loss leader. We don’t know what this tablet costs. We’ve contacted the company for the kinds of costs of the tablet – not to mention the content, as you mentioned, that Barnes & Noble is giving away with the tablet. So we don’t know how much money the company makes or loses every time it sells one of these, but it can’t be a tremendous amount. What it’s relying on is content sales down the road. And that’s been the company’s stated strategy for many years – to sort of turn that corner of profitability. Over the past few years, the company has lost less money than it had in the years prior through selling less unprofitable hardware and trying to up its content sales – and really just cutting costs is really the main thing the company has done – but it hasn’t really worked yet in terms of growing its market in the U.S. It really hasn’t done much except for shrink the size of the Nook division. KENNEALLY: Interesting. And we started by telling our listeners that this is a story about Barnes & Noble. But the more I listen to you, I’m thinking it’s a story about Samsung. And another announcement from them just recently concerns a partnership with the Frankfurt Book Fair. They are the so-called innovation partner at the 2014 fair and are going to be showcasing a variety of their devices there to tell the story that they like to tell about embracing new forms of storytelling and evolving the reader experience. So clearly they are all in as far as being a part of the book-reading world. GREENFIELD: Yeah. In 2013, Samsung showed up kind of unexpectedly at Book Expo America. It was sort of mysterious. And we poked around a little bit, and we found out that they were talking to publishers trying to figure out if the company wanted to develop its own content portal with e-books to compete with some of the other guys. And so far Samsung has been a really credible competitor to Apple on the hardware side but really, in everything it’s tried to do, so far as I can tell, on the content side, it hasn’t really matched up with any of the other guys. But I think, with this partnership with Barnes & Noble combined with what it’s trying to do at the Frankfurt Book Fair coming up later this year – it goes to show that Samsung hasn’t quite given up on the e-book market just yet. KENNEALLY: Well, indeed. And I’m glad you say that about their 2013 appearance at Book Expo, because I thought much the same thing, only I thought it to myself. There was a very large stand and a very prominent play they were making, but it was unclear just what they were there for.
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