News Column

Nook Looks to Fill Video-streaming Niche

Sept. 26, 2012

Jessica Van Sack, Boston Herald


Consumers will soon have another mobile video streaming service to consider, with Barnes & Noble announcing a new product that analysts say could create problems for Netflix.

Though the company declined to offer pricing details for Nook Video, which won't be a subscription service like Netflix, Barnes & Noble spokeswoman Mary Ellen Keating indicated they will rival other offerings.

"Our prices will be competitive," she said. "We'll have a complete library from all the leading studios."

Indeed, the list of studios that have partnered with Nook is impressive: HBO, Sony Pictures, Starz, Viacom, Walt Disney Studios and Warner Bros.

What's more, Nook is partnering with UltraViolet, a company that will allow customers to purchase videos in stores and have access to them on mobile devices, the first large retailer to offer this technology.

Yet Barnes & Noble's stock hardly rallied on the news, closing at $12.26, a 4 percent decrease.

Nook Video faces stiff competition, but analysts said not to count it out.

"Amazon Prime Instant Videos give a significant edge to the Kindle platform, but continued Nook improvement helps keep Nook owners from leaving the platform," Stifel Nicolaus analyst David A. Schick wrote in a note to investors.

Analysts did not see Nook Video taking market share from Amazon, which offers several ways to view television episodes and movies on-demand.

"It's more like a Pay-Per-View," said analyst Victor Anthony of Topeka Capital Markets. "Pay to download or pay to stream hasn't really resonated with consumers the way subscriptions has."

Netflix, on the other hand, is still suffering after losing 850,000 of its DVD subscribers last year and gaining fewer new users to its streaming service than in years past. In a move that could signal changes are afoot for the company, it is preparing to offer an exclusive new season of the canceled cult favorite "Arrested Development" to subscribers.

Source: (c)2012 the Boston Herald. Distributed by MCT Information Services