Daily Intel's Gabriel Sherman posted a report today with sources noting that the New York Times is "close to announcing" the return of an online content paywall. Questions, then: Is it true? Will it work? And will it matter?

NYTPicker, a cranky bedbug-like blog typically devoted to parsing the New York Times, took Sherman to task already for his sourcing. They argue that not only is this 'news' stale information that could just be presumed—as it's well known that the Times has been working towards a new paywall for a while now—but that the rumors are old hat, too. Two previous scoops—one from the New York Observer last May, and another from the Daily Telegraph last July—have both prognosticated incorrectly about the announcement of a Times paywall. Also, it's been pointed out elsewhere, Sherman has none of this information on the record, and the language sourcing the information is fairly shaky:

New York Times Chairman Arthur Sulzberger Jr. appears close to announcing...

The Times seems to have settled...

A final decision could come within days..

...A senior newsroom source agreed, adding that the plan could be announced in a matter of weeks.

But there are a few of those sources, however unnamed and iffy their language is. Also, as Sherman points out, the Apple Tablet's rumored to be announced on January 27th, dots they've also connected at Gizmodo. The idea that somewhere, people thinking readers would pay for the New York Times the same way they pay for Doodle Jump isn't at all outlandish. So, assuming the report is accurate, Sherman's sources tell him that the main point of contention wasn't so much whether or not to put a paywall up, so much as what kind of paywall it'll be. This was either:

(A) The Wall Street Journal's Iron Paywall model, which allows users to have top stories for free, and 'sample' other content, making them go through the paywall to get past the tease, or

(B) The Financial Times metered model, which is a system that allows users to read a specific amount of content before getting locked out of reading more (and begin forced to subscribe).


or (C) an NPR-style membership, which revolves around perks like tote bags and lecture passes, etc. Sherman says this idea was tossed out (laughed out?) last fall.

Some juicer details of the report also note that the Times turned down offers to team up with News Corp to fight off Google's info-hoarding, or Journalism Online. The previous New York Times paywall was an epic mess some of you might remember called TimesSelect. For those of us who'd prefer the musings of Maureen Dowd and Thomas L. Friedman to be locked as far away from civilization as possible, it was a blessing, as the Times put what they felt was their "premium" content out of the reach of freeloaders. For those Maureen Dowd and Thomas L. Friedman fans out there, it was a pain in the ass. And for the Maureen Dowds and Thomas L. Friedmans of the New York Times, it was the last thing they wanted: a loss in readership. Sherman spoke with Friedman about this:

"What was coming to me anecdotally from my travels was the five worst words that as a columnist you ever want to hear: ‘I used to read you before you went behind the wall.'"

Sherman reported that the Times settled on (B), the Financial Times model.

The trick would be to build a source of real revenue through online subscriptions while still being able to sell significant online advertising. The appeal of the metered model is that it charges high-volume readers while allowing casual browsers to sample articles for free, thus preserving some of the Times' online reach.

The interesting thing about both the Wall Street Journal and the Financial Times models is that—unless you work at Dunder-Mifflin—it's always been pretty easy to get around without paying, thanks to the smart people of the internet who figure these kinds of things out. Also, there's not one story that I have to go around the pay wall on that I'd need to read in the Wall Street Journal right now. They put that content up for free. Most of the people who want that content already pay for it, anyway, because they are the people who need to have it.

In other words: Catch 22.

Put your content behind a paywall: Nobody reads it, and advertising money (the bulk of media revenue) gets compromised.

Put some content up for free, and some behind the paywall: You risk the people who used to click on the now-sequestered stories going elsewhere for them, and thus losing advertising dollars to competition. Right now, the Times is the Avatar of online news content: original reporting, original video, slideshows, star op-eds, a SWAT team of comment moderators, podcasts, blogs, etc. That's expensive. Will the money earned from that paywall be enough on top of the ad revenue they haven't lost to support the costs of a newsroom producing content at the level the Times does?

Put none of your content up behind a paywall: No additional revenue from subscribers, but you don't lose any readers, or incur the expense of building and securing a paywall, and keep moving in the same direction you're moving: south.

And it wouldn't be such a problem if the Times financial troubles haven't gone the way they have for the last few years. If this is what's happening, and the New York Times is looking for a nuanced solution to a very complex problem, and trying to adapt to the current climate, better now than never. That said:

Going paid would capture more circulation revenue, but risk losing significant traffic and with it ad dollars. At an investor conference this fall, [NYT Digital Chief Martin] Nisenholtz alluded to this tension: "At the end of the day, if we don't get this right, a lot of money falls out of the system."

Nisenholtz is correct, to an extent. It's not just a lot of money, but a lot more money than they've already lost that will go away. And at that point, you can expect far more than money—as we've recently watched—"fall out of the system" forever.

[Speculative Apple Tablet rendering via Gizmodo.]