During Cablevision Systems Corp.'s (NYSE:CVC) earnings conference call, a new business model surfaced for recently acquired Long Island newspaper Newsday. The media conglomerate may be planning to charge for online access to the daily tabloid.
PaidContent wrote of the plan:
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.
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Dealscape has been following the recent discussion regarding online subscriptions for newspaper Web sites in our Changing face of media topic center. Charging for news is frequently discussed in media circles, yet rarely practiced beyond business news
sites WSJ.com, FT.com and others (including The Deal). One challenge: how to monetize news that is not exclusive to the publication. Newsosaur's Alan D. Mutter speaking to paidContent sums it up best when he said of the Newsday plan:
"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."
But can Newsday pull it off? It is the leading paper based on
Long Island and benefits from Cablevision's ownership of the local cable news network News 12 Long Island. Combined,
they still may not have enough exclusive content to make the prospect of
charging online subscriptions viable thanks to a rather competitive
landscape. The Cablevision assets compete with The New York Times, Mort
Zuckerman's Daily News and News Corp.'s New York Post. Additionally,
Cablevision competes -- both online and on TV -- with the New
York-based network affiliates' local news rooms too. Currently, none of
the rivals charge a subscription for online access, so what's to stop
an online Newsday reader to defect to a competing outlet?
Rutledge 's references to online subscriber fees was mentioned in
passing. It is possible that Cablevision and its controlling Dolan
family were simply floating the idea to gauge response from analysts and rivals. - Matthew Wurtzel
Changing face of media topic center
See story from paidContent
See earnings call transcript from SeekingAlpha
See related story about successful online subscription services from Slate
Comments
This disasterous news makes me laugh... Local web sites like longislandexchange.com will see a new influx of traffic and revenue from this decision and I can't welcome it more. I hope they start tomorrow.