Only a Cable Guy Could Come Up With Newsday's Pay-Only Scheme
Pundits will say Newsday's desperate plan to charge for the Long Island newspaper's website is some kind of bellwether for the industry. What it really means: Newsday and its owner, Cablevision, have nothing to lose.
They've already lost hundreds of millions of dollars in less than a year. Executives at the cable-TV conglomerate announced the plan even as they said they were writing down Newsday's $650 million purchase price by $402 million. "We plan to end the distribution of free Web content," said Cablevision COO Tom Rutledge in a call with analysts.
What that really means: Newsday plans to end its distribution on the Web.
Employers are willing to foot the bill for subscription at work to papers like the Wall Street Journal and the Financial Times. But its inconceivable that consumers will pay for a rather ordinary product like Newsday.com, especially in a media market served by four large dailies, none of whom have announced plans to charge for their websites.
Newsday's Web traffic will surely plummet. Except for some local Long Island news, there's little Newsday readers won't find elsewhere. No doubt some enterprising local bloggers, or startups like Patch, will pick up the slack.
No wonder that a bunch of cable executives came up with this plan. With their local TV monopolies relatively undisturbed, and only limp competition from the nation's telecom oligopoly, they just can't conceive of a competitive market. If Newsday were, on its own merits, an outstanding publication, they might have a shot at charging for it. But it's not. So the cable guys are stuck doing the one thing they know how to do: Hike prices.