Newsday to charge for website, online cable service

By Yinka Adegoke

NEW YORK (Reuters) - Cablevision Systems Corp 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 cable service.

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 programing package.