In laying out its goals for Long Island newspaper Newsday, Cablevision (NYSE: CVC) COO Tom Rutledge told investors that the company plans to end free access to the paper’s site. The line was slipped in quickly as he turned the call over to Q&A and Rutledge wasn’t asked about the plan for Newsday.com. In his introduction, he hinted that Cablevision plans to use access to Newsday.com as a way to attract and retain more of its cable customers on its home turf, Long Island. “Our goal was and is to use our electronic network assets and subscriber relationships to transform the way news is distributed,” Rutledge said. “We plan to end distribution of free web content and make our news gathering capabilities service our customers.” Calls to Cablevision and Newsday for elaboration weren’t returned.
Transcript (via Seeking Alpha)
More after the jump…
– Little choice but to charge: As advertising support is crumbling for online newspaper operations are evaporating, many newspapers execs, like NYT Bill Keller, have been musing about putting up pay walls again. While financial pubs like WSJ.com and FT.com have been able to get away with asking readers to cough up subscription fees because business professionals are more willing to pay for specialized business news, the thought of a general newspaper doing so when so much is free is largely considered dubious. Still, the challenges newspapers are dealing with leaves them little choice but to try to get money directly from users. Newsosaur’s Alan D. Mutter, told me he believes Newsday has a shot, but within limits. “Yes, I think they can start charging for web content. More and more publishers will, because they can’t afford to produce content without doing so. You can’t charge for sports scores, stock prices or generic breaking news. The key will be providing content that is valuable and exclusive.”
– Feasible, but a losing strategy: There actually are a few local dailies that have met with some success on getting their readers to pay for access. Outsell’s Ken Doctor, in an e-mail conversation, pointed out Little Rock, Ark.’s Democrat-Gazette. “Yes, it’s feasible, but, I believe, a losing strategy. Our best case is Little Rock, and Long Island is no Little Rock. Yes, the Democrat-Gazette has done better than average in circ retention, but it is still laying off dozens of people today… They’ve been able to keep circ better because it is Little Rock, with far less competitive media, and it is the big dog in the state. In New York, Newsday faces strong competition from the three other dailies plus dozens of local websites. Much of its coverage, in print and online, can be readily found for free elsewhere on the web. So assuming, it gives free, or next-to-free access to its print subscribers, it is unlikely to pick up much new revenue from non-subscribers who can go elsewhere. Similarly, I don’t think it’s a strong retention device for holding to print readers, though it may work there to some degree for the short-term… The biggest problem: the current site is (a) loser. In February, 2009, the average user spent 4 minutes, 25 seconds per month — and that’s when it has been free.“