First Newspaper Paywall – Doesn’t Look Like It Is Working

The Long Island daily newspaper called Newsday, was one of the first newspapers to try using a paywall. A paywall is where you must subscribe and pay a fee to access news online. But what could turn out to be a preview for others is that people are not going to pay. Newsday setup their pay for service last October and has attracted a whopping 35 subscibers at $5 a week.

That is sad when one thinks that the newspaper was originally purchased for $650 million. According to a recent article it also states that:

That astoundingly low figure was revealed in a newsroom-wide meeting last week by publisher Terry Jimenez when a reporter asked how many people had signed up for the site.

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.

In that time, without question, web traffic has begun to plummet, and, certainly, advertising will follow as well.

Of course, there are a few caveats. Anyone who has a newspaper subscription is allowed free access; anyone who has Optimum Cable, which is owned by the Dolans and Cablevision, also gets it free. Newsday representatives claim that 75 percent of Long Island either has a subscription or Optimum Cable.

Mr. Jimenez was in no mood to apologize. “That’s 35 more than I would have thought it would have been,” said Mr. Jimenez to the assembled staff, according to five interviews with Newsday staffers.

He argued that the web was not intended to be a revenue generator, but rather to provide extra benefit to loyal subscribers.

Not to be a revenue generator? You spend $4 million to setup a web site and expect what, to lose money? I would bet that as this paper continues to lose money, Jimenez will continue to collect a bonus. After all, isn’t that the American way?

Comments welcome.

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I have been writing for LockerGnome since relocating to Missouri seven years ago, where I continue to be a technology enthusiast who enjoys playing with the newest and latest gadgets.

  • Ryan Farmer

    Well crap, now the only thing to do is to charge those 35 people $1,000 a month to compensate for the lost ad revenue!

    *grin*

  • http://wp3.lockergnome.com/nexus/blade/ Ron Schenone

    Hi Ryan,
    I don’t think a grand a month would be enough. LOL

  • Ryan Farmer

    Not even if they double the advertising too?

  • Gary Bing

    This is not funny at all to me and quite a sore subject at that. I was in Journalism in college in the late 70’s and I informed the instructor in one of my classes that I was sick and tired about the infernal bitching about the LA Times crying about the price of newsprint with their incessant price increases of the newspaper Knowing fully well they did not even manage to equate anywhere near the actual costs. The revenue is generated by advertising and those rates are dictated pretty much by the amount of subscriptions listed. ( I often wondered if those were artificially inflated.) All the delivery costs inefficiencies could be wiped out and their precious newsprint by providing the news on the TV. set via cable. She said that was 20 years away. I just got one of the first cable systems with a 12-15′ corded “remote,” for $15 a month. The technology was already in place and it would have been a no brainier to provide the news paper over the cable for an extra fee sent over to the Times. Currently there is a newspaper out there you can ONLY get on line now as they have curtailed physical print additions. My cable box always contained a parallel printer port and subsequent boxes had connections for “future use.” The LA Times just sent me a “give away” for $2 a week for Fri., Sat.< and Sun editions. No mention of an online version. News papers to me have allways been grosely inconvient for me . I’m allergic to the fresh ink having to put them in the oven first and they make my place a dump always having to take them down to the recycle bins. (We have only recently got those in my building, over a decade after it was mandantory for single homes) The La Times just laid off after making several waves of cuts 80 people. They have been to the bone now they’re chipping away at it. They just don’t get it . RIP LA Times. I guess I”ll have to get my unbiased investigative reports from Yahoo news for free. Yeah right! You get what you pay for and if you don’t like it you get what you deserve. Hello Rupert, I hope we don’t choke and gag when your the only game in town.