Tag Archives: Cablevision

Cablevision’s Newsday Goes Behind the Firewall

Cablevision has made good on its threat to put the online version of Newsday behind a firewall, accessible only by print subscribers or online only users willing to pay $5 per week. Classifieds will remain free.

Newsday, purchased last May from Tribune Corp. for $650 million, is the nation’s 19th largest newspaper with a daily circulation of 368,194. That’s down from 488,000 a few years ago

The move to put it all behind a firewall is primarily designed to reinforce the value of a print subscription, while bringing in some new dollars – not many — from those who exclusively use the online site. It goes against the conventional wisdom that has prevailed in the Internet era that online readers extend the user base and the newspaper brand, making both more appealing to advertisers.

Newspapers, of course, have an interesting dilemma. Surveys have shown that many users simply don’t want the hassle of managing the account of a daily paper that needs to be recycled or thrown out, especially if they don’t have time to read it on a daily basis. The online fee – also being explored by The New York Times – would compensate the newspaper for its content. The NY Times, however, is apparently looking at a $5 monthly fee, not $20. And it is a primary source for news.

Limiting users is also appealing to publishers as it cuts bandwidth costs, and focuses advertising on local consumers. Providing content to European and Asian audiences is a constant topic of conversation among U.S. newspaper publishers, especially as they add more and more multimedia features with higher bandwidth costs.

At the same time, Cablevision risks losing even more subscribers and further reducing Newsday’s storied brand, which must compete against television news outlets (including Cablevision’s own News12), Internet news sources, and other metro titles (i.e. The New York Times, New York Post, The Daily News). Brand value is especially important in retaining major accounts, such as retailers and auto dealers.

Cablevision’s assessment, obviously, is that it can shore up the Newsday brand, especially using promotions on cable, and its pioneering use of dedicated, on demand channels for autos and real estate – an area that the cable company has been actively pushing.

My assessment is that the MSO is not necessarily de-emphasizing online ads, as some newspapers have. It just hopes to reach them in different ways, with a more focused audience. Executing on that vision (and minimizing the collateral damage) is the daunting task that lies ahead for Tad Smith, the information industry heavyweight from Reed Business Information who has just been appointed Cablevision’s new head of local media group.

Cablevision has already written off much of the $650 million that it spent to buy Newsday. Financially, the acquisition was a very poor decision. The question is whether it can get some of it back and rebuild the Newsday franchise for a new generation.

Cablevision Still Bullish on Newsday Synergies, Despite Huge Write-Offs

Cablevision bet big on synergy (and ignored the CW about the newspaper industry) when it bought Newsday from Tribune Co. last summer for $650 million. Today, less than eight months later, it concedes that it has written off $402 million of that investment (a significantly worse investment than Stephen Marbury of Cablevision’s Knicks).

Whether the economics of the deal ever makes sense, here’s the rub…. Cablevision remains extremely bullish on the possible synergies between the newspaper, the newspaper website, and the on demand video capabilities of its Optimum broadband service. On January 1, it launched the Optimum Autos brand across both Newsday and Cablevision on Channel 605. Looking forward, Optimum Homes, a real estate channel, has been slated for Channel 606.

During an analyst call today, COO Tom Rutledge said that Cablevision continues to believe that it can better manage the transition of Newsday, which counts a million users a week for its newspaper and website. News is one aspect – Cablevision has been an industry leader with local 24/7 news. Classifieds are the other.

“Optimum Autos has great content related to Long Island, it’s a respected brand and it will continue to attract the same advertisers and consumers that we want to reach,” said Rutledge. “That’s ultimately the value that Newsday offers to us.”

Optimum Autos itself is poised to leverage the combined dealer base of Newsday, Newsday.com and Cablevision. A quick count looks like they may have around 300 dealers between them.

The rebranded site, which switched from Cars.com to Adicio Motors on January 1, provides “the best of all worlds,” per company press release. It has “maximum coverage across print, interactive and cable TV platforms, easy to use technology for uploading, searching and reporting, and a customizable local environment.”

The release went on to note that Optimum Autos includes “multiple color photos for each listing and one-click dealer contact. It also has hundreds of promotional video clips from leading auto manufacturers.”

Adicio Motors GM Deep Menon told us that after 11 weeks, the implementation has been going very well. By using Adicio’s reporting tools, Optimum Autos can show dealers their ROI based on the number of qualified leads they are getting. They can also get exclusive leads.

“Dealers have many ways to maximize their visibility, especially with video reviews, says Menon. At the same time, “the site can also sell pre-roll and video sponsorships by car make.” More advanced technology is in the works.