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Originally Posted by tdonline
P.S....so how does Kobo make money on this?
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One of two things are likely true: either Scholastic agreed to discounting in exchange for Kobo promoting it, or Kobo's looking to grab attention from e-book enthusiasts and is using the Hunger Games as a loss leader.
Kobo's a pretty open platform, and perhaps they're hoping that they'll get owners of other e-readers interested in buying books from Kobo. Another possibility is that they feel it will rope Kobo owners back into reading books who maybe haven't been using their e-readers for a while. Not all owners of e-readers are avid readers who read the Mobileread forums, after all.
My guess is it's an advertising stunt. Why pay for advertising that someone may, or may not, ever even see. A loss leader discount like this costs you nothing unless you get people visiting and buying things from your store. The discount Kobo provides (above and beyond their wholesale price, whatever that is) is the customer acquisition cost. To the degree that existing Kobo owners take advantage of it, it's a great way to maintain loyalty and enthusiasm amongst your existing customers (or former customers that the deal lures back).
I expect we'll see more things like these (and a continuation of Kobo's popular discount codes) as Kobo's new owners, Rakuten, are determined to build marketshare amongst their various divisions and they see Kobo as a key part in that.