Cablevision Puts Up Newsday's Paywall; But Really Just Using It As A Churn Reducer
from the that's not a business model dept
When Cablevision first bought Newsday, Charles Dolan admitted the company knew very little about the newspaper business, but promised to consult widely with newspaper experts in coming up with a plan. That seemed like a really really bad idea, since all the newspaper experts we’ve seen don’t seem to even recognize what business they’re really in. But, it looks like that’s exactly what Dolan did. Back in February, the company announced that it was going to put up a paywall for its content. Since there had been no update or any action since then, I’d actually begun to wonder if the company was rethinking that idea. No such luck. Apparently it just took a bit of time to fully plan out Newsday’s self-destruction.
The company has announced that it will start charging a whopping $5/week (not month, but week) to access the website unless you’re an existing paper newspaper subscriber and/or a Cablevision subscriber.
Let’s be absolutely clear what this is. It is not a plan to build a 21st century news organization. It’s a plan to try to reduce churn elsewhere, by putting up a slight hurdle for Cablevision cable customers and Newsday newspaper customers to prevent them from leaving. Cablevision’s customer base and Newsday’s subscriber base overlaps quite a bit, so for plenty of those folks there will be no change at all. But this won’t do anything to actually help the news organization grow. Those who don’t subscribe to the paper edition or who use a competitor for broadband (like Verizon Fios which is pushing hard in Cablevision’s market) will simply go elsewhere. While the NYC papers don’t cover Long Island news quite as completely, they do a pretty good job with the basics, and other local news sources will fill in the rest. Cablevision is basically saying that it’s giving up in the online news business. It’s an admission that it doesn’t know how to compete. This won’t help it sign up new customers, and may only barely help it prevent old customers from leaving.
It’s basically a suicide play for Newsday. This is really a disappointment, since Cablevision — amazingly — had actually been one of the most forward thinking cable companies out there in terms of offering real value on the broadband side of things. But apparently it bought Newsday as an asset to let it wither away.