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In the three months following NewsDay's implementation of a paywall around their online content, they managed to add just 35 new, paid subscribers. Not 35 thousand. Just 35. Take into account that their traffic fell from 2.2 Million to 1.5 Million unique users, we can conclude that out of the 700,000 uniques that stopped reading, 35 converted to paying. Not exactly numbers to celebrate.
According to a NewsDay spokespan: "Our strategy is proceeding according to plan. We have a more engaged, increasingly local audience." However, here is the reaction from NewsDay staff: "People were expecting it to make money. If it's not, why are we doing it?”
Clearly there is a disconnect between management and staff, which is the first problem. It seems that the strategy, even if going "according to plan" was never communicated to the employees of the organization. But let's talk about the strategy.
NewsDay was not expecting to increase online subscriptions. In fact, the various headlines mocking NewsDay's dismal new subs numbers are actually a bit deceiving. Cablevision, the parent company of NewsDay put up the paywall for all non-Cablevision customers. All cable subscribers, as well as NewsDay print subscribers get access for free. Furthermore, NewsDay already had a 75% penetration rate in it's metro area (Long Island), and so there weren't really too many potential subscribers to even sign up for the new plan. Granted only 35 subs out of the remaining 25% of Long Island homes isn't a sign of confidence, the main goal of the paywall was to create additional value for their cable and print services. We won't know if the paywall has succeeded unless we see subscription numbers for those businesses.
More surprising is the enormous hole in the wall. As Staci Kramer at PaidContent points out, any one can get around the paywall by simply going to http://mobile.newsday.com. While the Guardian and others are having moderate success with selling their mobile applications, NewsDay seems to have completely ignored that opportunity. Leaving the mobile site open but closing off the website seems bizarre, but probably an oversight.
Finally, take a look at their sign up page. Or should I say pages. The funnel to convert a free user to paid breaks most of the rules of good landing page optimization. This was discussed on Hacker News, but I have a suspicious feeling that neither management or staff at NewsDay read that site (they should). Some issues:
But then again, perhaps this is all part of the strategy to NOT increase online subscriptions. I may be missing something here, but if there is an opportunity to sign up the remaining 25% of Long Islanders, why leave that money on the table. What about people originally from the area who live elsewhere? I'm sure NewsDay management know something we don't, but would love to hear more about their strategy.
Edit: I just had to add this image that I saw on TechDirt. Enough said.