Newsday to begin charging for online news

Cablevision, the owner of the New York area newspaper, says its new strategy "will transform the way news is distributed."

New York newspaper Newsday plans to begin charging online readers for access to its content, rejecting a trend toward free online newspaper content.

The move, which comes as the newspaper industry is mired in financial turmoil, was announced Thursday during a conference call in which Cablevision, the newspaper's owner, also announced it would write down the value of its $650 million acquisition of the newspaper by $402 million.

"Our goal was, and is, to use our electronic network assets and subscriber relationships to transform the way news is distributed," said Tom Rutledge, Cablevision's chief operating officer, according to a Reuters report on the call. "We plan to end distribution of free Web content and to make our news gathering capabilities service our customers."

Rutledge did not elaborate on the company's online subscription plans, but Newsday publisher Timothy Knight hinted that the move could be used in a bundling arrangement to cross-promote content on the newspaper site and in Cablevision's television programming.

"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," Knight said in a statement. "More particulars will be forthcoming over the next few months."

Such a plan would go against the trend of newspapers abandoning the pay-for-content model. Among the country's largest newspapers, only The Wall Street Journal has managed to continue charging online subscription fees. The New York Times abandoned a two-year experiment with the Web-subscription model in 2007, suggesting that the company's projections for subscriber revenue were small compared with advertising sales.

As readers have increasingly gone online for their news, papers have suffered declining subscriber numbers and lower advertising revenue, resulting in a dramatic industry contraction. Many newspapers have announced staffing cuts in the past couple of months, and some have warned that they may face closure soon if they can't enact further cuts or find buyers for their operations.

The Rocky Mountain News in Denver announced Thursday that it will cease publication on Friday, and the publishers of the Seattle Post-Intelligencer and San Francisco Chronicle have warned that they may soon follow suit.

 

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