Free to FT subscribers, Nexus 7 will be a content Trojan Horse

Last week, I reported how News Corp’s The Times is bundling a £199 Nexus 7 tablet for just £50 with its digital content subscription.

Now The Financial Times is going one better, giving away the tablet for free to new US digital or print subscribers.

The promotion was spotted in a print advertisement that is also trailed on today’s newspaper front page. And these two swallows surely make a summer this winter…

The deal confirms Nexus 7 maker Asus has struck terms with multiple publishers for subsidised bundles. I would not be surprised to see more announced in time.

Could the Nexus 7 be the device that truly unlocks the long-pondered model in which devices are offered in the same fee as content — and maps a future path for post-print publishers?

An Asus spokesperson tells me more tie-ups are coming:

“Yes, hopefully there will be more deals with other publishers and titles in the future. Asus UK is actively looking at innovative ways to get Asus products into consumers’ hands.”

Higher content cost and a lower device spec are allowing the FT to go lower than The Times with the Nexus offer.

Whereas The Times deal gives a £50 32Gb tablet to those who buy an 18-month subscription (the equivalent of $28 per month), The Financial Times is giving only an 8Gb model to those who subscribe for 12 months ($49 per month or $446.50 per year for digital-only, $598.48 per year for print and digital).

Speaking to me about the Times deal last week, News International customer sales director Chris Duncan, who put the offer together, said his readers needed the extra storage. He is betting on more bundled subsidies in 2013:

“We had looked at it for a while — originally with the iPad. But the economics of it were difficult. We were £2-a-week and the iPad was up in the £500 mark and the economics just didn’t work very well.”

“The Nexus is the first where we thought ‘this is a mainstream device that has value for both partners’. It’s the first time the market economics have allowed us to put this deal together.”

Unlike the full-sized iPad, the new generation of mid-sized Android phablets are both manufactured and sold at low margins. It is that which could finally unlock a marriage of device and news.

In bundling content and device, however, it seems both sides are marking down subscription price and device in order to snag long-term value. “Both sides have given,” News International’s Duncan said.

The Financial Times‘ Nexus 7 giveaway lasts only until December 17, so Asus is clearly getting a Christmas-time push on. Does it have stock it needs to clear?

Google is not party to these deals but will doubtless be pleased with the wider distribution for its Android devices. Since the FT can be read on multiple devices and the Nexus 7’s perfectly serviceable web browser in identical fashion, subscribers may even choose to re-gift their tablet this Christmas.

Amazon, which discounts its Kindle devices to below cost in order to make up margin on content sales, had been considered well positioned to do similar. But whether news publishers can negotiate effectively with a company they have seen take much power away from book publishers remains to be seen.