Newsday’s Decision to Charge for Content is Desperate and Stupid

I began my career at Newsday in 1986 when I was hired at the age of 23 to work on some of their very first online services. I spent seven years working on online services there and got to know some fantastic people. My final presentation, before leaving in 1995, was an introduction to this new thing called HTML and linking. I haven’t been at Newsday for a while now, and its changed owners and management a few times, but somehow I still care about the place.

My company, SubHub, enables people to build subscription websites quickly and easily. So you’d think I’d be applauding Newsday’s move to such a model. But I’m not. It’s going to fail.

Charging for content works when the content is unique, actionable, highly targeted and from a trusted source. Newsday ticks perhaps two of the boxes – it’s a trusted source, and maybe some of the content is actionable (restaurant reviews, business news, etc.).

Charging does not work for commodity content, and that’s mostly what Newsday has. National and international news is readily available elsewhere. Sports coverage, syndicated features – all available elsewhere. Movie reviews, music reviews – virtually everywhere.

Newsday’s knowledge of its local market is more unique and valuable, but even that too is available in general news coverage from numerous online and offline competitors.

In short, Newsday has little to charge for. This doesn’t mean it couldn’t create some online content that meets the criteria for charging successfully. The Wall Street Journal keeps coming up with new online packages it can get audiences to pay for. But I haven’t heard that Newsday plans to do this.

Just putting the existing stuff behind a firewall isn’t going to help. Bundling it with programming from parent Cablevision – well what’s that all about? Is Cablevision going to create new local video content that people would pay for? Or does access to Newsday online just become another throwaway incentive to buy a cable subscription?

Putting Newsday’s existing content behind a firewall is just a way to deprive it of oxygen and kill it. Unfortunately, the kind of creative thinking necessary to create content that people will pay for is not likely to come from a cash-starved newspaper company or its cable operator owners. It’s more likely to come from the smaller players and individual entrepreneurs, like the ones we see at SubHub.

Newspapers are crashing and burning all around us now, and Newsday and its owners have found another way to do it. I wish them well, but I’m glad I’m not on the online team there anymore.

Comments

[Joe Berkowitz]

Hi Evan -

Smart and very appropriate. We are consulting to media companies to think very hard before putting up paid walls. Much better to be strategic about customer usage. Substitution value can be a killer.

Once you understand the data there are always ways to generate revenue through a smart business model, even in this challenging macroeconomic environment.

I hope all is well with your business.

Regards - Joe