Again, if it were a question of time, waiting for growth, that would be one thing. All things being equal, I’d still argue against free models because of its hamster-wheel incentives toward volume. It is the logic that persuaded The Washington Post’s president, Steve Hills, speaking to a secret meeting of concerned top Post journalists to push—in earnest, apparently—for more traffic-driving slideshows. Does anyone else see a leadership problem at this company?

But, again, if there were a financial case for it, at least that would be something. But there is none.

Eric Wemple had a good post on Wednesday pointing out the Post actually did well traffic-wise, but underperformed the newspaper industry in monetizing it. Right. That’s bad.

But he quotes Alan Mutter saying, quite correctly, that even to perform to industry standards is to underperform the broader market place for digital ads.

As papers including the Financial Times have recognized, for a newspaper to compete in the digital ad game is to compete in a giant market where the game is monster traffic volume and ad rates are already tiny and still falling.

For newspapers, this is demonstrably a losing game. Again, even if the Post is able to rise to the industry standard, it will still lose. Digital ads are fine, but alone they are not enough when there is a honkingly obvious supplementary source of revenue available.

The benefits of adding a paywall are becoming more apparent by the day even as fears of a downside are receding. The FT, the Times and other premium papers—and I assume that’s what the Post management thinks it is, right?—have shown traffic and digital ad losses to be more than manageable. Indeed, the FT says it can charge considerably higher ad rates than free sites. It has gone truly “digital first” in the sense that digital revenue is now eclipsing print revenue, and not because of print declines but because of digital growth. That may be why paywalls are being adopted all over the world, and papers like the Post find themselves living on an increasingly lonely, little FONtasy Island. And the tide is still coming in.

And if super-un-premium Gannett can make paywalls work, anybody can.

Our Ryan Chittum has roughed out the numbers for the Times paywall and finds it is pulling in $100 million in new revenue, money that it would not otherwise have. How much could the Post earn? Unknown. The Post’s daily circulation (470,000-ish) is a bit more than half that of the Times, so that might provide a guide. But in truth, the Post has hamstrung itself in other ways, namely by deciding it’s mostly a local paper. Let’s say it would make only a quarter of what the Times can generate. That’s still a lot of reporters, still helping to preserve the paper’s main value-creator, the newsroom.

Incoming editorial chief Marty Baron, ex of the Boston Globe, is quickly proving himself master of the obvious when he says the size of the newsroom will depend on revenue. Via Wemple:

The resources we have will be dependent on the revenues of the company. That’s as true of The Washington Post as it is true of the Boston Globe… People will know where the resources are headed when they look at the revenues. It can’t be otherwise. No institution can spend more money than it has. That means it’s not easy, it’s painful.

Etc. etc.

I think, by now, we get that. The question for leadership is, what are they going to do about it?

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Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.