Even as News Corp jettisons The Daily, sister publisher The Times experiments with pushing tablet subscriptions - not by producing tablet-specific content, but rather by subsidizing the purchase of tablets themselves. Borrowing from the phone company model of subsidizing the hardware in return for a long-term contract The Times is offering a 32Gb Nexus 7 tablet for just 50 quid, about 25 percent of the retail cost. This comes with an obligation to subscribe to The times over 18 months, which would cost the average bloke in the end another 200 sterling. (Quite.)
While the cost to The Times for the hardware remains unknown, the gross revenue of about $540 over the course of the first 18 months leaves significant room for publisher profits considering that this is a digital subscription, largely free of any incremental costs. Even a full retail purchase of the hardware would leave a net of $300 for the first year and a half.
The model appears on its face to be quite attractive to publisher, subscriber and hardware provider, so long as the publisher has a product that sells reasonably at the large out-of-pocket prices, such as a daily newspaper or a vertical trade publication or data service.