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January 26, 2010

A Scary Fairytale: Newsday’s Pay Wall Affair

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To the tune of the Fresh Prince theme song:

Now this is a story all about how
Newsday’s life got flipped, turned upside down.
And I’d like to take a minute, just sit right there,
And I promise to stop singing Fresh Prince of Bel-Air.

…Although, the prince may fit right in here since this is a fairytale. And like every good fairytale, there’s a moral to this story.

Fairytale, Interrupted

goldilocks fairytale

Once upon a time there was a happy little news site called Newsday. Now Newsday, a daily American newspaper serving New York City, was an old soul, founded in 1940, back before the Internet was on the scene. As time passed, Newsday held on to the way of life it knew.

And can you blame it? For generations Newsday was a popular member of the established media tradition. As part of that system, people paid to get their hands on Newsday and the rest of the news. Life was smooth and cushy for Newsday… until everything changed.

When the Internet took over the town, the era of the paper began to fade away. Our fair Newsday held on to its riches, ranking as the American newspaper with the tenth-highest circulation in 2008. But soon the townspeople grew tired of paper, realizing that the new kid on the block, Internet, was often easier and more efficient than paper — and most of the time they could get their news for free.

Newsday’s readership declined (along with all the other old-school papers) as news consumers spread their attention across the abundant resources of the Internet. Faced with the challenge to keep people paying, Newsday started asking their online visitors for money.

Enter the Pay Wall

fairytale castle

When Newsday met the pay wall it thought it had found a partner that would cook, clean and pay the bills. Newsday took up with the pay wall on in October of 2009, though the relationship that started out so hot and heavy is a quiet little fizzle today. In the three months since the pay wall has been around Newsday has signed up a whopping 35 subscribers.

So what went wrong? Popular online news site Salon shacked up with a pay wall temporarily in 2001. The publication survived to tell the tale of the ill-implemented pay wall.

It turns out that the pay wall enabled Salon to make it through the leanest of times, when advertising revenue dried up after the 9/11 attacks. But when subscribers began to dwindle and advertisers wanted back in, Salon changed to a more open model once again. Except by that point, readers remembered Salon as the closed site it once was, and it took years to overcome that misunderstanding.

Newsday isn’t the only site with something to think about. The New York Times has said it will require subscriptions to access site content in 2011. This announcement comes years after a tried-and-failed subscription program in 2007. It remains to be seen how the paid model might work this time around for the Times.

Video site YouTube will also start charging for premium content soon. But it’s clear to me that the paid content goes above and beyond the free offerings, not only on the site, but anywhere else online. Movies will be available for rent, starting with films from the Sundance Film Festival. That’s unique, quality content worth its premium. It gives YouTube’s model a fighting chance.

And They Lived…

That’s where this story ends, for now. We don’t know what will happen next. We marketing professionals continue to observe and analyze, applying lessons to our work where they fit, avoiding the missteps of giants.

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