Cablevision Charging for Newsday Online, But the Numbers Don't Add Up

Numbers can be terrible reality checks.

Want to know how likely it is that Cablevision's (CVC) new charge-for-Newsday-online will work? A few rational arguments to follow, but consider this number: The average unique visitor on Newsday.com spends four minutes, 25 seconds per month on the site. Ouch. That number can sub for lots of focus groups, price elasticity testing and the like. Newsday's would-be digital audience has voted with its fingertips. That number is up almost one minute from a year earlier, here, courtesy of E and P's monthly Nielsen rankings, but still ranks Newsday as having the lowest online engagement of the top 30 newspaper sites.

Confronted with having to pay for a site you may use less than five minutes a month, you think you are going to pay for it? Wrong site. Wrong year. Wrong metro area.

It will be fun to watch though, since we all needed another case to chew on. Our best case has been Little Rock. Yes, the Democrat-Gazette has done better than average in circ retention, but it is still laying off dozens of people this week. It has applied a tourniquet and that only helps for a while when you have an internal hemorrhage. They've been able to keep circ better because it is Little Rock, with far less competitive media, and it is the big dog in the state.

Long Island is no Little Rock. In New York, Newsday faces strong competition from the three other dailies plus dozens of local websites. Much of its coverage, in print and online, can be readily found for free elsewhere on the web. So assuming it gives free, or next-to-free access to its print subscribers, it is unlikely to pick up much new revenue from non-subscribers who can go elsewhere. Similarly, I don't think it's a strong retention device for holding to print readers, though it may work there to some degree for the short-term.

To be more successful, Newsday would need to shift its model to being more hyper-local about Long Island, rather than bringing the world to Long Island, and it doesn't show much signs of doing that.

Cablevision swung for the fences with the $650 million (now written-down) purchase. It tried to parlay the industry triple play (cable, Internet, telephone) into a Home Run. This new move seems to be another attempt to swing for the fences, after apparently whiffing on the dreams of internal synergy that have upended so many media companies. Right now, it looks like you'd have to score the Cablevision auction "victory" over Rupert Murdoch and Mort Zuckerman as a strike out at the end of the ninth inning, but we'll get ready for the second game of the doubleheader.

Disclosure: no positions