* Cablevision plans to charge for Newsday website
* Writes down Newsday value by $402 mln
(Adds company response)
By Yinka Adegoke
NEW YORK, Feb 26 Cablevision Systems Corp
CVC.N plans to charge online readers of its Newsday
newspaper, a move that would make it one of the first large
U.S. papers to reverse a trend toward free Web readership.
The paper said in a statement late on Thursday that it is
in the process of transforming the site into a locally focused
Newsday, which covers the New York suburb of Long Island,
was bought by Cablevision in a $650 million deal last May that
was widely criticized on Wall Street as a puzzling move into a
troubled newspaper market.
Cablevision had to write down Newsday's value by $402
million on Thursday, pushing its fourth-quarter results to a
loss, as U.S. print advertising sales and circulation have
dropped with more readers seeking free news on the Web.
But Cablevision Chief Operating Officer Tom Rutledge said
the cable TV company was aware of the difficulties faced by the
traditional newspaper business.
"Our goal was and is to use our electronic network assets
and subscriber relationships to transform the way news is
distributed," he said on a conference call with analysts.
"We plan to end the distribution of free Web content and
make our news gathering capabilities a service for our
customers," he added.
Rutledge's comments could raise speculation that the paper
may seek cost cuts by reducing print operations. It could also
look to cross-promote Web access as part of the Cablevision
Newsday's publisher Timothy Knight said in a statement: "We
are in the process of transforming Newsday's Web site into an
enhanced, locally focused cable service that we believe will
become an important benefit for Newsday and Cablevision
customers. More particulars will be forthcoming over the next
Several large U.S. newspaper groups have had to lay off
staff, reduce print costs, slash dividends and scramble for
debt refinancing in a fight for survival. Others have filed for
bankruptcy protection, including former Newsday parent Tribune
Co, Journal Register Co JRCOQ.PK and Philadelphia Newspapers
In the past, several major newspapers including The New
York Times charged readers for full or partial access to
stories on their websites.
But in recent years, news content has become widely
available for free, forcing many papers to give up small
subscription revenue in the hope of gaining better ad sales by
attracting more readers.
Such moves, however, have not made up for the loss of print
advertising and circulation revenue. Some major business papers
like the Financial Times and News Corp's (NWSA.O) Wall Street
Journal have been able to maintain subscription fees.
Cablevision has been seeking operational partnerships with
Newsday. Last August, it set up Newsday TV, an interactive
television channel that allowed digital cable subscribers in
Long Island to subscribe to the paper through their TV sets.
Aside from the financial pressures of owning a newspaper,
Cablevision management has also clashed with the editors of
Newsday, according to reports in the New York Times and other
media sources last month.
The dispute allegedly arose over Newsday's coverage of
allegations against Eddy Curry a player on the New York Knicks
basketball team, which Cablevision also owns.
(Reporting by Yinka Adegoke; Editing by Gary Hill, Richard