If The New York Times spun off its digital edition, it would be the tenth biggest paper in the country by circulation, with more paying readers than the Chicago Sun-Times and just behind the Chicago Tribune in circ.

With its third quarter results out this morning, the Times further solidifies the case for its paywall strategy, which has brought it more than a quarter of a million customers paying at least $15 a month for online access. Adding Kindle and iPad subscribers gives the Times paid digital circulation of 324,000. And it has another 100,000 subscriptions paid for by Lincoln through the end of the year. That’s about 424,000 paying or paid-for subscriptions. Even if you take out the Lincoln sponsorship, the Times digital circ would be the fifteenth biggest paper in the country, ahead of Newsday.

Unfortunately for the Times, that number isn’t going to get a lot bigger anytime soon. Individually paid subscriptions grew 15 percent in the second full quarter of the paywall after jumping at least 400 percent in the first full quarter. A sharp slowdown was expected, clearly, but I had hoped the growth rate would have been higher than 15 percent. Expect it to slow further this quarter and in subsequent periods, although you might see a blip when some of those 100,000 Lincoln-sponsored subscribers sign up when that agreement expires at the end of the year. It seems clear the Times isn’t going to have half a million paying digital subscribers this time next year.

But 400,000 is doable, and that’s still excellent. The Times’s paywall is defying all the doomsayers who said you couldn’t charge for news without killing web traffic and thus online advertising. One of the naysayers was the Times’s own Jim Roberts, an assistant managing editor, who reported the other day that “I’m here to tell you I was wrong”: Total visitors to nytimes.com are actually up 2 percent from a year ago when there was no paywall.

Better yet, digital advertising is up too. In the third quarter, despite a slowing economy, they were up 6 percent in the News Media Group (which includes other papers like The Boston Globe. The NYT takes in more than two-thirds of the group’s total revenue). For the year, digital ads are up 12 percent so far to $162 million.

In other words, the Times has created the perfect paywall: It’s getting tens of millions of dollars from hardcore readers while letting in enough Google traffic and casual readers to continue boosting its online readership and collecting ad revenue off of those eyeballs.

So how much revenue are we talking about?

The fourth quarter is seasonally the highest for ad revenue, and that puts the News Media Group is on pace for roughly $235 million in digital advertising for 2011. Estimating that the NYT is responsible for about two-thirds of that, that would give the paper a digital-ad haul of roughly $155 million for the year.

Each of these subscriptions cost at least $195 a year, giving the Times at least $63.2 million in digital subscription revenue (a few million of this presumably goes to Apple and Amazon, which typically get a third of the revenue from subscriptions on their devices)

Add it up and it’s safe to say that The New York Times alone will take in more than $210 million in digital revenue this year, or more than what its newsroom costs. That’s an important milestone for the Times and for newspaper journalism generally.

Poynter’s Bill Mitchell wrote yesterday that it’s time for everybody else to follow the Times lead, and he’s right. If you’re not planning to copy the NYT’s paywall to a T, what are you thinking? I’m looking at you, Katharine Weymouth.


Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.