Posted January 28, 2010 8:04 am by with 7 comments

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All of the talk of paywalls for online content that gets the bulk of the attention by the ‘press’ is focused mainly on large publications like the New York Times, and the Wall Street Journal. These publications have international readership and have significant influence when it comes to coverage of the major events in the world as well as in the business arena. Because of this significant influence many believe that the paywall discussion is valid because people need these sources to stay informed.

What about paywalls on the local level though? How will more localized papers fare when it comes to asking people who do not subscribe to the publication to pay to see the content online? If the results at New York Newsday are any indication its not a pretty picture.
Crain’s New York Business tells us just how bad it is

Here is one paid model for online journalism that isn’t exactly setting the world on fire: Nearly three months after Newsday put its Web site behind a pay wall, has attracted only 35 subscribers.

In addition, traffic to the Long Island daily’s site has dropped by half, according to Nielsen.

Newsday is the local paper for all of Long Island and a good portion of the NYC borough of Queens. Not exactly a small place. In other words, if there are this many people in the area and there are only 35 of them in three months willing to fork out a few bucks a week to access the information online this has to be viewed as a failure. Here’s what readers who do not subscribe elsewhere see when they try to get information from the website

To be fair it’s not like only 35 people read the online content for the paper since the content is literally available to a large portion of the population. can be accessed free by the paper’s home subscribers, as well as by Cablevision customers and subscribers to the cable operator’s Optimum Online broadband service.

According to the paper, that means about 75% of Long Island households just have to register to have access. Anyone else who wants to read the paper online has to pay $5 per week.

Still, the number of online subscribers shocked members of Newsday’s union—Local 406 of the Graphic Communications Conference of the International Brotherhood of Teamsters—which is in a bitter fight with the paper’s management over a proposed contract offer that would cut pay by 10%.

What this outcome may be telling the industry is that paywalls may very well limit the reach of your publication. Long Island is of particular interest considering just how many people have relocated from the area to parts all around the country. Now, if these people want to keep up with current events from ‘home’ they would have to pay and it looks like those folks are saying to Newsday “Forgetta about it!”.

So if this tactic isn’t working to generate more revenue what is the point of doing it? Maybe Newsday doesn’t want to be one of the first major local newspapers to try this and then be one of the first to drop it all in the span of a few short months.

Whatever the reasons this experiment looks to be a huge bust thus far. Not exactly the success story you parade out to other publications considering the same tactic. So what do you think? Will local publications be able to enact a paywall and have success or is this just a desperate move by an industry that decided to change as a means of survival rather than doing it as part of their ongoing business plan to move into the future?