B&N discounting, giving away NOOKs to sell content

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Posted 10 January 2012 11:09am by Patricio Robles with 0 comments

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In the battle for the future of the tablet market, Amazon - with the Kindle Fire, may be a top contender for the lead row. But another retailer, Barnes & Noble (B&N), isn't ceding anything to its etail rival.

Yesterday, it announced that customers who pony up $120 for a one-year subscription to the digital version of PEOPLE Magazine will receive a $50 discount on the NOOK Tablet, bringing its price down to that of the Kindle Fire ($199). Customers who purchase a $240 annual subscription to the New York Times (NYT) can have a NOOK Simple Touch for free, or a NOOK Color tablet for $99.

B&N's logic is straightforward: when it comes to the e-reader/tablet space, the real money is not in selling devices; it's in selling content. If the retailer can lure consumers in with free or cheaper devices, it can establish a relationship with them that should be quite profitable over the long haul as customers use their devices to purchase content.

Sweetening the deal for B&N is the fact that, according to paidContent, the bookseller isn't subsidising the discounts and giveaways on its own. paidContent's Laura Hazard Owen says: "It is our understanding that Time Inc. (NYSE: TWX) and Barnes & Noble are sharing the cost of the discounted Nook Tablet that comes with the Nook People subscription". 

While the New York Times is silent on the subject, it wouldn't be surprising if the daily was willing to put some skin in the game given that an annual NYT subscription on the NOOK costs $240.

Needless to say, it wouldn't be surprising to see Amazon jump in and run a similar promotion of its own. What is intriguing, however, is the possibility that some publishers might eventually get into the device game themselves.

Last year, word broke that the Philadelphia Media Network was planning to do just that, but it was unclear that it made sense for such a publisher. It might not make sense for any publisher, but now that some are apparently willing to help device markers move their e-readers and tablets, it isn't a stretch to think that a major might eventually take the plunge and see if there's an opportunity to be had on its own.