B&N Offering Free Nook With NYT Subscription

Evidently keen to combat the flagging performance of its e-ink line (and reinforce its increasingly popular tablet line), Barnes & Noble has today announced a promotion in which new subscribers to the Nook edition of The New York Times or People magazine will receive a free Nook Simple Touch, a $100 discount on the Nook Color, or a $50 discount on the Nook Tablet.

Obviously those are good deals on the color models, but the real interest lies in the free e-ink model.

The growing trend in the e-reader market is the rapidly decreasing cost of the hardware. Eager to rope people into their respective ecosystems, B&N and Amazon are slashing e-reader prices and hoping to redeem the hardware cost in media purchases. Amazon has resorted to an ad-subsidized model with its "Special Offers" Kindles, whereas B&N has apparently settled upon steep hardware discounts.

In many respects, Barnes & Noble's approach is intelligent. 

Amazon's Kindle Fire is available for $199 largely due to the Fire's existence as a front-end for Amazon's media ecosystem. The Fire provides an unfiltered window into all aspects of Amazon's store, thereby increasing the probability of significant returns on each Fire sold. Accordingly, Amazon is able to sell Kindle Fires at a competitive price. The greater number of people buying Fires results in more media sold.

While the e-ink Kindle operates on the same principle, the opportunity for returns is significantly smaller, insofar as the Kindle is restricted to certain types of media. Unlike the Fire, you cannot, for example, switch from reading a book to renting a film or flicking through a graphic novel. As such, Amazon has chosen to sell its Kindles for as low as $79, thereby supplanting the hardware into impulse-buy territory, and encouraging consumers to readily join their ecosystem.

Barnes & Noble is banking on the same principles, but in offering a free Nook Simple Touch with a popular newspaper subscription, the bookstore giant is effectively guaranteeing consumer interaction with its ecosystem for at least one year. Considering the clout of Amazon's store, Barnes & Noble is willingly operating humbly to strengthen the credibility of its offering, and that is a great trend to set.

A Nook NYT subscription costs $19.99 per month and includes access to the NYT website. Considering the NYT's famously suspect pricing model, that actually works out to be a fairly good deal in and of itself. But when a free e-reader is thrown in? That's a great price.

Barnes & Noble is smartly banking on its ecosystem to increase revenue. A free Nook is a small price to pay for a reader who is then roped into the Barnes & Noble ecosystem for a whole year -- a year in which that user is likely to make use of the device and continue to make purchases through Barnes & Noble.

With increasing customer demand for versatile, rich media capable devices, it is unsurprising to see such a promotion, but I am a little surprised that it was Barnes & Noble who took the plunge first. Considering Barnes & Noble's existence first and foremost as an established brick and mortar bookstore, the company's propensity for innovation is both startling and welcome.

Although I stand by my assertion that the e-reader, in its current form, is life-limited, promotions encouraging the distribution of the hardware and the associative adoption of e-ink compatible content will certainly aid in the longevity of the technology -- something I am certainly not opposed to.

(Via PaidContent)