by Jeff Bercovici
Feb 27 2009 9:24AM EST
‘Newsday’ Leads the Paid Content Charge. Yikes.
Why do I suspect that it won’t be Cablevision, of all the newspaper owners out there, that solves the puzzle of getting consumers to pay for news online?
Cablevision COO Tom Rutledge let slip in a conference call yesterday that the company plans to “end the distribution of free Web content” on Newsday’s website and thereby “make our newsgathering capabilities a service to our customers.”
He didn’t elaborate, nor did Newsday publisher Timothy Knight shed much more light when he told his paper, “We are in the process of transforming Newsday’s Web site into an enhanced, locally focused cable service that we believe will become an important benefit for Newsday and Cablevision customers.” Details TK.
Whether there’s some way to unscramble the free-online-news egg and make consumer dollars replace vanishing ad revenues is a question that’s obsessed virtually every deep thinker in the journalism world over the past few months.
Without knowing more about Cablevision’s plans, it’s impossible to say they won’t work. But you have to wonder how a company that’s already written down more than $400 million of the $650 million it paid for Newsday just last year suddenly came into possession of so much foresight.
Analyst Ken Doctor has already spotted a key weakness in Cablevision’s thinking: Even as a free offering, Newsday.com isn’t terribly sticky. The average reader only spends 4 minutes 25 seconds a month on it. “Confronted with having to pay for a site you may use less than five minutes a month, you think you are going to pay for it?” Doctor writes. “Wrong site. Wrong year. Wrong metro area.” He does allow that the pay model might hold some promise if Newsday were to “shift its model to being more hyper-local about Long Island, rather than bringing the world to Long Island.”
Media analyst Kevin Kamen was also quick to pooh-pooh Cablevision’s announcement:
“If Cablevision honestly believes that charging a web subscriber fee is going to significantly impact their profit margins then they are really in for a shocker. This has not been an effective tool to drive revenue at other newspapers and will not increase the valuation of Newsday. If anything, millions less will visit their website and readers will seek other alternatives to fill their appetite for local news.”