Since Cablevision (NYSE: CVC) doesn’t break out results for Newsday any more, it’s hard to know exactly how bad the Long Island newspaper is doing. But it’s clear that the property represents a drag on otherwise pretty solid business. During the Q&A with investors, COO Tom Rutledge was asked if the company might be better off shutting it down. He decidedly said that wasn’t going to happen and that the company was working on some fixes. In addition, Cablevision executives also touted the “advanced” interactive advertising growth and the possibilities for consumer retention thanks to its iPad app.
Rutledge described two ways Cablevision looks at Newsday as an important part of its business. While the company would like Newsday to be a successful standalone business, for now, it’s main value is as an add-on for its cable customers, who get internet access to the newspaper’s content for free, and as a local advertising play as well. Rutledge said he thinks Cablevision can create new products around Newsday and derive revenue from it.
Also, he added that home circulation is growing for Newsday. “And so we think it’s not going to be a drag from AOCF perspective. And that as we move into the digital world that we can find ways to create new products from Newsday that will drive additional revenue,” Rutledge said. “So we haven’t given up on it by any means.”
Turning to stronger parts of Cablevision’s offerings, Rutledge touted that the company had done 84 campaigns for “advanced” advertising, which it has been ramping up over the past year. The company has opportunities to sell more advanced ads and it’s able to charge a premium on those ads because of the technology enhancements, Rutledge said, adding that the interactive ads are a main factor in driving Cablevision’s business at this point.
Last month, Cablevision launched its Optimum Live TV for iPad app, which offers the cable operator’s digital subscribers streaming access to approximately 300 live cable channels and roughly 2,000 VOD options at no extra charge. Again, another good customer retention play as video subscribers declined a bit in Q1. Rutledge made the distinction in offering this as an in-home option for current subscribers as opposed to presenting the cable operator’s range of channels across its wifi network, which is outside the home, but within the company’s footprint. Some networks have given Cablevision internet rights for the TV Everywhere option. But the wifi network creates a different set of possibilities and the company has not sought out content rights for that yet.