Times Newspapers has begun to offer a subsidised version of the Nexus 7 tablet to new digital subscribers. Customers who commit to the £4.00 per week Times Digital service for 18 months will be able to buy the Google/Asus co-branded tablet for £50 on top of the cost of their subscription (the devices' recommended retail price is £199). Alternatively, a one-time payment of £299 will cover the 18 month subscription and the tablet. The latter option amounts to a saving of £212 when compared to a separate purchase of both items.
The digital subscription includes full access to The Times' website, tablet app, and the Sunday Times tablet app and the smartphone app.
IHS believes that partnerships between hardware vendors and OTT content providers will occur with increasing frequency over the next few years. Well-chosen partnerships are vehicles to advance interests on both sides. In this case, Google is able to build brand equity by selling devices that are associated with a prestigious newspaper and, at the same time, improve device sales to an important set of costumers. On the content side, a subsidized device adds value to a publisher's digital subscription, which is likely to be important for driving adoption of mass market services. The idea has precedent in the mobile sector, in which operators subsidise handsets as a way of attracting and retaining subscribers, and is also commonplace in the pay TV sector - most pay TV operators worldwide now bundle a set-top box with their monthly subscription.