After Three Months, Newsday's Grand Paywall Experiment Has 35 Paying Customers. Yes, 35.

from the no,-really.--35 dept

Wed, Jan 27th 2010 8:00am — Mike Masnick

Like many, we were amazed at the decision by Cablevision to try charging $5 per week (yes, per week) for its paywall to Newsday content online. The newspaper itself is not particularly good and doesn't really provide all that much in the way of excess value compared to what else is out there. And $5/week is extremely high. Yet, even so, we're a bit surprised that after three months, the paper has a grand total of 35 paying subscribers. Yes, 35. I'm sure that extra $175/week comes in quite handy. Oh right, they also saved on the salary of their popular columnist who quit, rather than have his work hidden behind a paywall.

To be fair, Cablevision never really seemed to view this much as a direct source of revenue, but rather as a churn reducer for its cable subscribers, who can get to the Newsday website for free. Still I doubt there are really that many people who decide not to drop their Optimum Cable service just because they get free access to Newsday online. I can't imagine that the $175, in any way, makes up for the drop in visitors and ad revenue. According to multiple online tools, the general estimate is that Newday has lost 50% of its web traffic since putting up the paywall. And in return, they get $175/week. Nice one, Cablevision.

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Filed Under: newsday, paywall, subscriptions
Companies: cablevision, newsday

49 Comments

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Anonymous Coward, 27 Jan 2010 @ 8:06am

http://www.observer.com/2010/media/after-three-months-only-35-subscriptions-newsdays-web-site

And now the paper is in the middle of a labor dispute in which it wants to extract a 10 percent pay cut from all employees. The cut was turned down by a lopsided vote of 473 to 10, this past Sunday.

Things are bleak in old Hellville, the pet nickname some reporters have established for life on Long Island.

"In the meeting with Terry, half the questions weren't about labor issues, but about why isn't this feature in the paper anymore?" said one reporter. "People are still mad about losing our national correspondents, our foreign bureaus and the prestige of working for a great newspaper. The last thing we had was a living wage, being one of the few papers where you're paid well. And to have that last thing yanked from you? It's made people so mad."
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dwind (profile), 27 Jan 2010 @ 8:08am

Blame it on the pirates
The pirates have grabbed the content and put it up for free on their bit torrent sites.
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Anonymous Coward, 27 Jan 2010 @ 8:16am

Re: Blame it on the pirates
THEM STEALERS ARE DESTROYING OUR FACT-BASED INDUSTRY!!!
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a-dub (profile), 27 Jan 2010 @ 8:19am

Abandon ship!
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:Lobo Santo (profile), 27 Jan 2010 @ 8:19am

Re: Blame it on the pirates
hahahahahahahahaha
LOL.
Thanks, I needed a good laugh.
; P
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Cixelsid (profile), 27 Jan 2010 @ 8:30am

Re: Blame it on the pirates
Dey tuk yer job!!!
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ChurchHatesTucker (profile), 27 Jan 2010 @ 8:33am

Suckers
I suspect even that number will drop. Imagine if you were one of the 35 and found out about this.
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AdamR (profile), 27 Jan 2010 @ 8:35am

"The web site redesign and relaunch cost the Dolans $4 million, according to Mr. Jimenez. With those 35 people, they've grossed about $9,000"

http://consumerist.com/2010/01/after-3-months-only-35-paying-customers-for-newspapers-web -site.html
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Anonymous Coward, 27 Jan 2010 @ 8:39am

Re:
Arrr! Last one down the lines be a scurvy bilge rat.
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icepick314, 27 Jan 2010 @ 8:45am

now the REAL question is...

who are those 35 idiots who PAID for news?
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Esahc (profile), 27 Jan 2010 @ 8:52am

Re:
They probably conned elderly people.
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Anonymous Coward, 27 Jan 2010 @ 8:54am

Re:
They are probably test accounts setup to ensure the paywall was functioning correctly ;-)
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Nick, 27 Jan 2010 @ 8:55am

At least one of them were a subscriber so they could get the content and put it on a bit torrent site...

who are the other 34
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a-dub (profile), 27 Jan 2010 @ 9:06am

What newspaper pays 4mil for a website? Besides the US Gov, Who pays 4mil for a website period?
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Jon Renaut (profile), 27 Jan 2010 @ 9:18am

Re:
Yeah, seriously. I would have done it for half that.
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Pixelation, 27 Jan 2010 @ 9:19am

How to get rid of employees without firing them.
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Pixelation, 27 Jan 2010 @ 9:19am

How to get rid of employees without firing them.
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The Anti-Mike (profile), 27 Jan 2010 @ 9:50am

Numbers... gotta wonder!
the general estimate is that Newday has lost 50% of its web traffic since putting up the paywall.

if they have 35 subscribers and lost 50% of their traffic, does this suggest that there was only 70 readers before?

Nope.

35 is the number of paid subscribers who are not cable subscribers. I would be interested to see what the actual number of cable subscribers who have access is. It would also be very interesting to see if by focusing on their local market (no outside visitors) that they have been able to increase the bottom line of their online operation. Ad income per user should in theory be up, no?
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tuna, 27 Jan 2010 @ 10:04am

Re: Numbers... gotta wonder!
They lost 700,000 web readers or about a third. That might affect their ad revenue a bit.
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DS, 27 Jan 2010 @ 10:12am

Re: Re: Numbers... gotta wonder!
And I'm sure the deal from Cablevision helped lessen the blow, or negate it entirely.

I have to agree with the Anti-Mike on this one. This is sound and fury over something that we don't know the whole story about.
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RD, 27 Jan 2010 @ 10:16am

TAM the amazing TAMHOLE
"35 is the number of paid subscribers who are not cable subscribers. I would be interested to see what the actual number of cable subscribers who have access is. It would also be very interesting to see if by focusing on their local market (no outside visitors) that they have been able to increase the bottom line of their online operation. Ad income per user should in theory be up, no?"

Um, no, dumbshit. Where do you get your reasoning from? Are you just SO completely indoctrinated by your corporate masters to be a complete shill no matter what that you just spew ANYTHING as long as its contradictory? Sheesh.

Try to follow along here. People who are subscribers to cable get this free anyway. So, they dont factor into the loss as they keep getting it regardless. The loss comes from those who used to come, but who arent customers of the cable or internet (or whatever the criteria is to get it included). Now, I think its safe to say (reasoning, again) that they likely had a BIT more than 35 visitors (who arent already customers) to the site prior to the paywall. Given that a lot of this stuff is driven by advertising to eyeballs that see the page, this sort of loss is probably significant. Someone mentioned 700k readers lost. Dont know if thats true, but it a sure bet that its a LOT more than 35.

Defending sticking their news behind a paywall, then losing all but 35 visitors/eyeballs, then having the gall to suggest this is an IMPROVEMENT in their income-per-user is unconscionable, disingenous, and only proves beyond doubt that you are a bought-and-paid-for corporate shill, with no doubt any longer.
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DS, 27 Jan 2010 @ 10:50am

Re: TAM the amazing TAMHOLE
So you know the full details of the Cablevision tie in?
So you know the full details of the number of hits they get?
So you know the full details of their advertising revenue?
So you know how the subscription rate changed?
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Anony1, 27 Jan 2010 @ 10:51am

Brains...gotta wonder!
GET A LIFE MORON. PREFERABLY ONE WHERE YOU ARE PRO-YOU AND NOT ANTI-SOMEONE. YOU ARE BEYOND PATHETIC. SERIOUSLY, LOOK IN A MIRROR AND CRY.
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Anonymous Coward, 27 Jan 2010 @ 10:57am

Re: Numbers... gotta wonder!
Somewhere (maybe China?), Anti-Mike's math teacher just committed suicide.
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JH, 27 Jan 2010 @ 11:02am

Cablevision Rage
This is just the latest in Cablevision's asinine attempt to trap customers while increasing prices and reducing service. They bought the local news channel (News 12 Long Island) and will not license it to satellite providers making it impossible to get local news unless you subscribe to cable via Cablevision. After their purchase of News 12 they began pulling more and more stations from the basic cable package (without a price decrease of course); railroading customers so they had to pony up for for the more expensive packages. The most abominable part was they leveraged the digital transition as the perfect up-sell opportunity. Cablevision told users many channels were no longer available as part of the basic package. Customers would have to subscribe to the digital package to continue receiving the channels with language inferring this was a result of the digital transition.
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The Anti-Mike (profile), 27 Jan 2010 @ 11:16am

Re: TAM the amazing TAMHOLE
RD, please keep the name calling down. Also, you might want to open your mind a little and thing for a second.

You have to think "who did they lose?". They lost casual readers, maybe not even readers from their area. I know if I search google for news, I am often directed by them to one or another local TV or newspaper site to read a story. I don't have an interest in the local news or the local site, I am just a drive by story reader who ignores the rest of their site and disappears. If they lose people like me, I suspect they don't feel it is any loss at all.

Under their current situation, they can pretty much say the only people coming to their site are locals. If they lost 700k readers (and that was a third) they still have 1.4 million readers, all locals. That is a pretty good demographic to market, no? Their sales people can understand that, they can take it to their local market, and they can sell that benefit to advertisers. They don't have pumped up pages views with tons of out of state Google traffic invading the site, they have locals, and plenty of them, checking out the site for their local news. That is gold!

Defending sticking their news behind a paywall, then losing all but 35 visitors/eyeballs, then having the gall to suggest this is an IMPROVEMENT in their income-per-user is unconscionable, disingenous, and only proves beyond doubt that you are a bought-and-paid-for corporate shill, with no doubt any longer.

Thinking I said that just makes you the poorest reader of all time. They obviously have more than 35 readers, the Cablevision tie in apparently is giving them a large base, and that is the key.

Please, read the whole story next time!
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CS, 27 Jan 2010 @ 11:24am

Newsday
First, Newsday was never a great paper, and had been getting worse. It was still better than the NY Daily News though, so even though they dropped coverage for my area, I started picking it up at a local bodega. Coinciding with the paywall, they also doubled the newstand price of the paper, and I haven't read Newsday since.

To address a few comments, Cablevision owns Newsday, and saved the paper from bankruptcy. Newsday online was offered to any Cablevision subscriber or to anyone getting home delivery. Their website sucked. It was poorly organized, and the content quality was just as bad as, if not worse than (for online articles), the print edition. But I could get the crossword answers if I needed them and didn't have the following days paper (yet another failing of the NY Daily News).
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Mike Masnick (profile), 27 Jan 2010 @ 11:31am

Re: Re: Re: Numbers... gotta wonder!
And I'm sure the deal from Cablevision helped lessen the blow, or negate it entirely.

What "deal" from Cablevision? They *are* Cablevision.
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Anonymous Coward, 27 Jan 2010 @ 11:43am

Re: Newsday
So, the best you could say about the Newsday website is, that it let you cheat on the crossword puzzles?
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Ryan, 27 Jan 2010 @ 11:50am

Re: Re: TAM the amazing TAMHOLE
So...let me get this straight. If we grant all your premises, you're saying that a site that gets 1.4 million local hits is worth more in advertising than the same site that gets 1.4 million local hits + 0.7 million nationally? It's not like they got more local readers by allowing Cablevision subscribers to continue reading for free something they were already reading for free.
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The Anti-Mike (profile), 27 Jan 2010 @ 12:07pm

Re: Re: Re: TAM the amazing TAMHOLE
No, what I am saying is that it is what they can market better. Those 0.7 million "national" (just as likely international) readers are of no use to the local hardware store or the book store on 4th street. The current setup is very close to being a pure local market play. Advertisers want to pay for what they want, and they aren't willing to pay for what they don't want.

It is also about the sales people at the paper. They are selling local market, they aren't selling international advertising. Again, it isn't their market place. Yes, they could set up a complicated system to do ad replacements for out of market visitors, but then again, why bother? It isn't your market, and it isn't going to generate the big dollars - and the cost to maintain it potentially exceeds the income.

It's not like they got more local readers by allowing Cablevision subscribers to continue reading for free something they were already reading for free.

You are making the assumption that naming this site as part of the package doesn't in some way add readers. Perhaps some of the cablevision viewers were not aware of the site. Perhaps someone moving to the area and getting cable will find out about the site, etc.

The important thing is it gives the paper, print and online, the local focus for news AND advertising that let's them serve their market well. There is no requirement to make everything open to everyone all over the world, is there?
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tuna, 27 Jan 2010 @ 12:23pm

Re: Re: Re: Numbers... gotta wonder!
Why would that negate it. Web readership in total is down 700,000. That includes Cablevision customers.
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Ryan, 27 Jan 2010 @ 12:43pm

Re: Re: Re: Re: TAM the amazing TAMHOLE
Ok, take what Newsday had - 1.4 million local, Cablevision-subscribing readers(as you surmise), plus 0.7 million local, non-Cablevision-subscribing readers, national readers, and international reader(again, as you surmise). Now take away those 0.7 million readers - you have the same constitution of 1.4 million local readers you already had, but your hits are down 33%. In what possible world does this not devalue the website?

Nobody cares that the percentage of local readers went up if the actual number remained the same. Maybe local advertisers wouldn't have paid any more for additional non-local readers, but they certainly aren't going to pay more for fewer non-local readers. The price is set by the demand for ads on newsday.com, and that demand has no doubt gone down significantly. Nice job Cablevision; I'm sure there's a bunch of cable subscribers staying on just so they can access a crappy, previously free news site.
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RD, 27 Jan 2010 @ 1:41pm

Indeed
"Ok, take what Newsday had - 1.4 million local, Cablevision-subscribing readers(as you surmise), plus 0.7 million local, non-Cablevision-subscribing readers, national readers, and international reader(again, as you surmise). Now take away those 0.7 million readers - you have the same constitution of 1.4 million local readers you already had, but your hits are down 33%. In what possible world does this not devalue the website?"

Indeed. To answer, it exists in the world of Tamhole the Corporate Lapdog, because he is paid to take that point of view, and will twist all reason and facts to try to make it sound reasonable. Sticking stuff behind a paywall and losing .7m (1/3) of a base of eyeballs is a GOOD thing, or at least, NOT A PROBLEM. Because its Big Media doing so, therefore it must be OK. After all, every thing must be "paid use" or its not valid. Those freeloading .7m a-holes just need to pay up or go somewhere else, since they arent important. Notice how TAMHOLE justifies this by trying to twist how the "sales people will take this into account." as if he knows how they run things. Oh wait, being their mouthpiece, I guess he DOES know how they run things!
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Anonymous Coward, 27 Jan 2010 @ 1:59pm

A zillion customers who pay nothing is still less than five customers who pay something.

Eyeballs are not worth money. Money is worth money.

If you can sell those eyeballs to someone else, in the form of advertising, then they're worth money, but not until that point. And ad rates have been plummeting for a long time.

And you don't get any ad money from content aggregators.

It's a tough business.
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Anonymous Coward, 27 Jan 2010 @ 2:37pm

A zillion customers who pay nothing is still less than five customers who pay something.

True, except spending $4 million dollars to generate $175 per month doesn't seem too bright.
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Anonymous Coward, 27 Jan 2010 @ 2:39pm

Re:
"And you don't get any ad money from content aggregators."

Yes, this is true when you're doing something horribly horribly horribly wrong.
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Harry, 27 Jan 2010 @ 2:59pm

Actually, the traffic hit is probably more than 50%
The chart is for unique visitors to newsday.com. It's probably safe to assume that when the articles were free, the pages per visit and return frequency of visitors was much higher than it is now, where essentially you just get a tease article and then the request to subscribe. So, from an advertising hit, they've probably sacrificed well over 50% of their impressions by doing this.
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lux (profile), 27 Jan 2010 @ 3:38pm

Re: Re: TAM the amazing TAMHOLE
"I don't have an interest in the local news or the local site, I am just a drive by story reader who ignores the rest of their site and disappears. If they lose people like me, I suspect they don't feel it is any loss at all."

This statement is disingenuous, and at best purely laughable. If you think any Internet advertising company believes what you just said, Google would be a very poor company. ANY TRAFFIC IS CONSIDERED GOOD TRAFFIC. Without a doubt you need to get back to Internet commerce 101.
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Mike Masnick (profile), 27 Jan 2010 @ 3:40pm

Re:
If you can sell those eyeballs to someone else, in the form of advertising, then they're worth money, but not until that point. And ad rates have been plummeting for a long time.

Are you honestly suggesting that the hit from losing approximately 1 million visitors was less than $175/week?
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Anonymous Coward, 27 Jan 2010 @ 5:35pm

Re: Re: Newsday
Not cheat, just see what I missed (if I missed anything). I do the crossword on the subway, so I can't check as I'm doing it.

And yes, that and the Sudoku puzzle were the best things about the Newsday site. Piss poor local coverage, even worse national, and nearly non-existent international. Charging for a crap product and then wondering why it doesn't sell seems to be the Dolan's way.
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The Anti-Mike (profile), 27 Jan 2010 @ 7:00pm

Re: Indeed
RD, you decide this week to post as yourself instead of the string of anonymous posts you have been running for a while? Classic stuff.

When it comes to eyeballs, contrary to what certain guru types might suggest, tons of the wrong eyeballs are worse than fewer of the right eyeballs.

Local newspaper in Long Island wants readers from Long Island. It is who they are aiming for. They don't want to be the most popular long island newspaper in Paris or Bangalore, that isn't their market. They are narrowly (and IMHO correctly) focused on a local marketplace.

It might not make sense in the whole "information wants to be free" mental state that you are in, but sometimes it is better to be narrowly focused than wide open and failing.
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Zee (profile), 27 Jan 2010 @ 9:28pm

Hahaha
They will probably blame it on recession :)
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dryfire, 27 Jan 2010 @ 10:51pm

Re: Cablevision Rage
Are their cable channels digital?

It'd be really funny if they lessen the channels after they switch even though digital uses less bandwidth than analog for similar or better quality signal.

I wonder how long companies will get to charge for different types of data.
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Anonymous Coward, 28 Jan 2010 @ 12:49am

wow i usaly assume that theres at lest a 1000 idits who do something as dumb as pay weekly fees but only 35 wow way low
isn theres much hope that maybe news will stop paywalls after this?
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Punto, 28 Jan 2010 @ 6:28am

http://fiat-punto.info
I prefer to pay $5 per week as a member of porn site, but not for reading a newspaper :-)
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Anonymous Coward, 29 Jan 2010 @ 11:08am

Re: Re: Indeed
Spin doctor ahoy!

They already had the local marketplace.

They gained nothing.

Period.

Local Market + 700000 other readers > Local Market + $175/week. Period.
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Anony1, 29 Jan 2010 @ 12:36pm

Who the hell is RD? Real Dick? Wouldn't that be YOU Anti-Mike.
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Ian Channing (profile), 1 Feb 2010 @ 2:08am

Alexa ranking way down even year-on-year
So the graph at the top is a bit misleading as the newsday rankings have risen since, there's also the argument that december is the holiday period. However when you compare year on year results the drop is indeed quite dramatic. Take a look at http://www.alexa.com/siteinfo/newsday.com, click on Traffic Stats | Trafic Rank | Select 'Max' in the drop-down under the graph.
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