With Netflix For Nook Color, Barnes & Noble Fights Against Kindle Fire

Barnes & Noble (NYSE: BKS) is blurring the lines between the $199 Nook Color and $249 Nook Tablet with a major update for the Color, adding access to streaming video through Netflix (NSDQ: NFLX). The company is also launching other e-reading initiatives intended to strengthen its competition against Amazon.

Barnes & Noble now sells two tablets, priced just $50 apart. The company launched the Nook Color in 2010 as the “reader’s tablet,” “the first full-color touch device dedicated to reading everything and built on Android.” But Barnes & Noble has gradually moved away from positioning the Nook Color as a reading-centric device.

On its Nook product page, B&N presents the Nook Color with a quote from an *MSNBC* review: “Best value in the tablet world.” Meanwhile, it calls the Nook Tablet, which it launched just last month, “Everything NOOK Color has PLUS.” The Nook Tablet is preloaded with Hulu Plus, which the Nook Color is not receiving in this update, but the Color’s Netflix addition could be enough to induce users to stick with the Color for now instead of upgrading to the Nook Tablet.

On the other hand, if Nook Color users are ready for an upgrade, they might consider the $199 Kindle Fire instead of the $249 Nook Tablet. In that case, it’s in B&N’s best interest to try to keep them within the Nook ecosystem.

At any rate, it’s rumored that Barnes & Noble will launch its own digital video service sometime soon, and making the Nook Color video-ready may be preparation for that move.

Barnes & Noble also announced today that it now supports gifting of individual e-book titles, a feature Kindle has supported for months. It also launched the Kindle Daily Deal-like initiative “Nook Daily Find…a new read every day at an amazing price,” “Nook First: Exclusive content for Nook owners from leading authors,” and the Kindle Single-like “Nook Snaps: Bite-size reads for ‘snackable’ content on the go.”