Experiment to Watch: 'Newsday' To Launch Pay-for-Play on Web

By: Jennifer Saba All the recent talk about paid content and micropayments seem to have made an impression on Cablevision executives. The cable company said yesterday during a quarterly earnings call that it is planning to start charging for content of the Web site of the newly acquired Newsday.

Cablevision COO Tom Rutledge said on the call, "When we purchased Newsday, we were aware of the long-term issues facing the traditional newspaper industry. We plan to end the distribution of the free Web content and make our news gathering capabilities a service to our customers."

Indeed, Cablevision purchased the majority of Newsday from the Tribune Co. for $650 million in May 2008 but in February wrote-down 60% the value by taking a $400 million goodwill impairment charge.

Executives with Cablevision and Newsday were not forthcoming on the plans to charge for content. In a statement released to Newsday reporters Mark Harrington and James Bernstein, Publisher Timothy Knight said, "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. More particulars will be forthcoming over the next few months."

Over the past three months, unique users at Newday.com have been declining year-over-year. According to Nielsen Online, January monthly uniques were down 2% to 3.6 million year-over-year. In December, the site was off 60% falling to 2.5 million uniques from 6.4 million in December 2007. Go to Fitz & Jen for more data data.

If Newsday goes through with the plan it will be one of a few major papers to charge for content. The Wall Street Journal and The Financial Times currently have a subscription model. The New York Times tried to hybrid pay wall with TimesSelect but pulled the plug on the experiment.

Smaller papers have tried erecting a pay wall too, running into problems. The Watertown Daily Times in New York -- about 90 miles north of Syracuse -- started charging for content in 2000 only to see subscriptions peak to 1,000 (the paper's daily circulation is around 28,400). It dropped the pay wall in February 2008 to get more readers and to fend off competition from an upstart free site called Newzjunky.com.

Ken Doctor, an analyst with Outsell Research, told E&P about the latest craze in the industry to start charging for content, "I think that people are acting out of frustration given the straits the industry is in. There is this romantic notion 'gosh darn it those readers should just pay.'"

Doctor believes that ultimately experimentation is a good thing though: "I think that there is in this firmament something essentially right: we have a major disconnect."