Wed October 9, 2013
Barnes & Noble Is No Blockbuster Video
Blockbuster Video died a slow death, though profitable for many investors. Blockbuster stores lasted more than a decade beyond original predictions of demise.
Similarity between Blockbuster Video and Barnes and Noble book stores is uncanny: one rented and sold movies in retail stores and was put out of business by electronic delivery of movies; the other sells books in retail stores and online and is suffering from online books delivered electronically to hand-held devices.
The difference is Barnes and Noble probably will survive its electronic competition. The New Yorker outlined factors going for Barnes and Noble: though sales fell last year, the company’s profits rose. It gained market share by the closure of competitors. It has short store property leases, so it’s more flexible to relocate or downsize.
In addition to 600 retail stores, Barnes has 686 college bookstores. Browsing in bookstores is still the favored method of book selection. Last, but not least, millions still favor a hand-held book.
The rate of e-Books growth slowed last year and still account for only about 20% of the market. E-Books will continue to grow, but Barnes and Noble will be here for a long time.
Every market innovation does not, necessarily, put older concepts out of business.
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