Newsday Puts Up Pay Wall

New York-based daily newspaper Newsday is taking the plunge into paid content, restricting access to its Web site to print subscribers and cable Internet subscribers of its parent company, Cablevision.

Beginning next Wednesday, Newsday.com will offer only a limited amount of free public content, including its home page, classifieds, school closings, obituaries, weather and entertainment listings. Anyone who’s not subscribed to either Newsday‘s print edition or Cablevision’s Optimum Online service can get a subscription to Newsday.com for $5 a week.

“If you look at our traffic over the past couple of years, you’ll see that our local visitors are more engaged, spend more time on our site, and have more pageviews. We want that kind of engaged audience for our advertisers,” Debby Krenek, Newsday’s managing editor and SVP of digital media, told ClickZ.

The motivation behind the move was to serve Long Island residents with a hyper-local news source, according to Krenek. But an engaged, hyper-local audience will be attractive to both local and national advertisers as well, she said.

The move could cut both ways for Newsday.com’s advertising offerings, according to Peter Krasilovsky, VP and program director at BIA Kelsey. One the one hand, the site would be able to guarantee that the vast majority of its audience was local, making it more attractive to some advertisers. On the other, it limits the site’s reach and overall audience size, making them a less attractive ad buy, even for their classified ads, which remain freely available online, Krasilovsky told ClickZ.

Newspapers have long been fighting a battle to own the local advertising experience. Their locally targeted readership and strong local brands should position them to win a good share of local ad dollars. In reality, the newspapers do own certain aspects of local advertising — targeting local consumers for national or regional brands, such as auto dealers, retail stores, and real estate, noted Krasilovsky.

But the focus of those advertisers remains on the print edition, Krasilovsky said. Typically, less than 12 percent of a newspaper’s revenue comes from online ads, he said.

“There’s a feeling among many newspaper publishers that online advertising has been a good supplement, but it hasn’t been driving much advertiser support,” he said. “The newspapers’ major advertisers don’t care about online ads.”

But with the current economic downturn, especially in those key areas, newspapers are being forced to find new ways to bring in ad revenue.

That seems to be the intent, according to a statement from Newsday Publisher Terry Jimenez: “In addition to providing greater value for Newsday and Optimum Online customers, we also look forward to better serving our advertisers with new interactive services that deliver a more focused and engaged consumer audience for their products.”

Newsday has already added a few new ad units when it redesigned the site in preparation for this move, according to Krenek. A new high-definition video player offers new video ad units, more ads are embedded in the site’s content, and new e-mail newsletters targeting categories like food and travel have been launched, all with new ad opportunities, she said.

While developing a more focused local audience could be beneficial, that goal would be better served by a free registration process and ad targeting, rather than a paid content model, Borrell Associates CEO Gordon Borrell told ClickZ.

“People are not inclined to pay much, if anything, for local news content,” he said. “Where a paid access model has been successful, it’s been in niche content, like premium financial news or real-time stock quotes.”

Both Krasilovsky and Borrell noted that one thing the move would do is protect Newsday‘s ailing print franchise, and stem some of the drops in circulation led by readers getting their news online for free, instead of buying a newspaper.

“In one way, they’re doing the right thing by charging for access to the site. They shouldn’t be giving away their content,” Borrell said. “But they’re deluded if they think they’re going to sell online subscriptions and make money showing ads to people coming to their site for local news. Advertisers don’t want to be around local news. They want to be on vertical sites, with wallet-ready shoppers.”

The move also seems short-sighted to Krasilovsky. “I’m of the belief that you want to have as big a reach as possible, and online has been bringing in a lot of readers for newspapers,” he said. “I don’t believe de-emphasizing online is a smart idea or a good decision for the future of the brand.”

Newsday is not the first newspaper to put its content behind a subscriber wall, but it is one of the biggest. The Albuquerque Journal and Arkansas Democrat-Gazette have each been outspoken proponents for the model, according to Krasilovsky.

The Wall Street Journal has been the poster child for paid newspaper content, but the Journal does offer much of its non-financial online content for free, as well as some breaking news articles. As WSJ Online’s executive editor Alan Murray told Harvard’s Nieman Journalism Lab earlier this year, a pay wall is most likely to work if some of the more popular content is left freely available, and the paid content is niche-focused. That doesn’t seem to be the plan for Newsday.com.

The New York Times undertook a semi-paid model in 2005 with TimesSelect, but scuttled that plan in 2007.

Parent company Cablevision, which bought Newsday from Tribune for $650 million in May 2008, has taken a subscriber-only approach with News12.com, the companion site to the company’s local cable TV news channel for its subscribers, since late 2005.

Optimum Online customers will not need to sign in to access Newsday.com from home. Newsday print subscribers. Customers wishing to access it from another location will need to register and log in.