Subsidizing e-readers, tablets not likely to be a win for newspaper publishers

By Roger Fidler

If you are in the market for an e-reader and a subscription to a New York Timese-reader edition, the latest offer from Barnes & Noble might be worth considering.

Until March 9 you can get a “free” B&N Nook Simple Touch with a 1-year Nook subscription to the NYT. The Simple Touch currently retails for $99. Or if you would prefer a Nook Color, B&N will knock $100 off the current retail price of $199 with a 1-year Nook subscription to the NYT.

A 1-year subscription to the Nook NYT edition is about $240 ($19.99 per month), so the deal only makes sense if you don’t already own an e-reader and really want to read an e-reader edition of the NYT every day.

As of January 9, the deal only appears on the B&N website. I couldn’t find any mention of it on the NYT website other than a Google ad for the B&N Nook Simple Touch at the bottom of its home page.

B&N doesn’t publish sales data for its e-readers and tablets, but recent reports indicate that holiday sales of the Nook Simple Touch and Nook Color were significantly below forecasts. I don’t have any inside information, but I would not be surprised to learn that B&N proposed the deal with little or no cost to the NYT in order to reduce its overstock of these e-readers.

The NYT also doesn’t make public any information about its digital subscriptions for e-readers and tablets, so we won’t know if the B&N deal has any significant impact. I’m guessing it won’t add much to the NYT bottomline. 

The notion that newspaper publishers should give free or steeply discounted electronic display devices to readers in exchange for 1- or 2-year subscriptions has bounced around for at least three decades.

Last year the Philadelphia Media Network began bundling an Arnova Android media tablet with a 2-year subscription to the Inquirer and Daily News digital replica editions for $99 ($89 during the holidays). A bundle that includes the Inquire and Daily News apps adds another $240 ($9.99 per month) for two years.

The low-end Arnova tablets retail for about $200, so the “savings” with the Phily deal is about the same as with the B&N-NYT deal.

In my view, newspapers and other news organizations are unlikely to get much benefit from subsidizing e-readers or tablets. They also would be foolish to market their own branded devices, as some media companies have proposed.

News apps appear to be popular with a majority of tablet owners, but there is no evidence that people purchase tablets to read a specific newspaper. They purchase tablets more for the enjoyment and convenience of effortlessly consuming all types of media. With e-readers, most of the motivation to own one comes from the desire to access and read books in a more print-like electronic display medium.

If the current pace of tablet and e-readers sales continue unabated, newspaper publishers won’t have to be concerned about readers having access to a device. Apple, Amazon, B&N, and Google will do the heavy lifting.

What newspaper publishers need to focus on is conveniently providing reliable and relevant content that the communities they serve need and can use, which has always been the real value of newspapers. Whether newspapers are displayed on paper or electronic displays is not important.

Kelly Peery
Communications Coordinator
Donald W. Reynolds Journalism Institute

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