Newsday Throws Itself Off The Paywall Cliff

Newspapers have enough problems right now without trying to deliberately (as opposed to accidentally) cripple their Web businesses. But Newsday is going to try.

As you may have heard, Newsday is going to be the first big daily to try to hide its online content behind a pay wall. The paper is "transforming the site into a locally focused cable service," as Reuters put it, and that phrasing is scary all by itself, given the lack of business and marketing acumen typically shown by your average cable company.

Newsday, of course, is owned by a cable company, Cablevision, and that probably explains a lot about this foolhardy plan. Unlike other papers that are said to be contemplating a subscription model, Newsday has a unique situation: the majority of its local readers on Long Island access the site through their Cablevision internet accounts. So, through the twisted logic of cable executives, that should make Newsday just another channel on the system, kind of like HBO. "We plan to end the distribution of free Web content and make our news-gathering capabilities a service for our customers," Cablevision COO Tom Rutledge says.

Oh my. Good luck with that.

So far, they're not releasing any details. Will the newspaper's Web site be free to Cablevision subscribers but charge fees to anybody else? Will the Web site be an add-on to Cablevision's subscribers cable fees, like HBO or Cinemax? Will they find some way to bring The Sopranos back in print form? Will they send The Sopranos to readers' homes to try to force them to pay for the Web site? The mind boggles.

The problem, of course, is the same faced by most newspapers contemplating Web subscriptions: The resulting loss of mass quantities of Web traffic has the ugly side effect of killing the site's advertising business. (Expect Newsday.com to lose 90 percent of its traffic after it starts charging for access.) And it's pretty much impossible to charge enough for Web subscriptions to make up the difference, especially when most of what can be found on a newspaper's Web site is available elsewhere on the Web. No paper is that exclusive.

Newsday's always had a nice niche as the voice of Long Island, and that works fine in print (and would seem to at least inspire the Cablevision cable TV bundling concept). But online, the paper's Web site, like all other papers' sites, has a broad geographic audience. In fact, a huge amount of Newsday's traffic comes from visits to its popular Walt Handelsman animated cartoons. They're nice cartoons, but will all those visitors pay for them? I think not.

Cablevision, of course is desperate. Last year—geez, was it only last year?—it outbid Rupert Murdoch to buy Newsday from Tribune Co. for $650 million. A couple weeks ago, Cablevision wrote off $402 million of that purchase. Nice investment there, Cablevision. (That giggling sound you hear is Murdoch, the happy loser.)

The plan to charge for subscriptions to Newsday.com—or whatever paywall scheme Cablevision is cooking up—is

just as bad a business decision. Maybe Cablevision would have been better of trying to figure out how to improve the customer service for its cable system, rather than trying to drive customers away from its newspaper.