When Politico’s owner bought Capital New York in September, the move came as a surprise to many of us, but it could certainly be seen as a concrete assertion of the viability of Politico’s business model, which is hybrid but features aggressively priced premium subscriptions—paywalls, and expensive ones.

At the time, the Times reported Politico’s bosses planned to put up a paywall for Capital New York, and that already seemed a stretch. Capital New York provides news about media and New York politics and government, which doesn’t seem in short supply.

And when Adweek reported last week that the planned paywall will be $10 short of $6,000 dollars a year, that seemed to me an expression of the kind of hubris that is always bringing down heroes in Greek plays. Not a chance.

A year’s digital access to The New York Times costs between $195 and $455. Come on.

So, how can Capital New York expect to make this work covering … Albany?

Pretty easily, actually.

The key can be found in a version of the old economist’s joke:

Street vendor: Apples, $10,000! Apples, $10,000!

Passing economist: Sir, why do you charge so much for your apples?

Vendor: That way, I don’t have to sell very many.

Haha! Those economists!

Actually, the secret to Capital New York is that it only has to sell 600 or so subscriptions to break even, and it’s probably going to do better than that because it’s not like apples in at least one important respect.

Consider first Politico Pro.

Launched in 2010, it starts at $8,000 a year for up to five 5 readers. By last year, it had more than 1,000 organizations subscribing and at least 7,000 readers, just three years into the project. And they’re growing fast.

Today, those numbers are about 1,700 organizations and 10,000 readers. Divide the 10,000 readers by the five readers allowed to use it to get to 2,000 subscribers, times $8,000 each, gets to a rough annual revenue $16 million. Politico has more than 100 employees, but not that much more. Let’s pay them at a rate of $100,000 each, including benefits, and we’re at, say, $12 million, and comfortably in the black.

Among its subscribers, for instance, is [T]he Department of Education’s Office of Communications and Outreach, whichin December announced it would enter a sole-source contract with Politico’s parent, saying: “OCO has subscribed to numerous news sources and publications over the years and finds the quality of journalism and relevance of content provided by POLITICO to be unmatched.” (UPDATE: The DOE says in a note to me that it did not end up striking a deal. “Politico has assembled a team of talented reporters and editors who have quickly contributed news and insight to the ongoing dialogue about education,” says Massie Ritsch, assistant secretary for communication and outreach. “The Department explored subscribing to Politico Pro but we were unable to negotiate a reasonable price to justify signing up.”)

Well, one could say, that’s Washington for you. And it is true that Washington is a unique market, a bottomless pool (I’m not going to say what kind of pool) of lobbyists, lawyers, trade associations, and corporations with a vested interest in granular news about narrow policy areas, like health care, trade, agriculture, defense, etc.

Open Secrets said there were 12,000 lobbyists in DC in 2013.

But consider Capital New York. It has or will have a staff about 30, about 23 of that editorial, putting its staffing budget at something north of $3 million. Let’s call it about $4 million, which is generous. At that rate, the site only has to sell 666 (a sign?) subscriptions to break even.

If that sounds difficult, consider that Albany alone, as Adweek pointed out above, has 6,000 lobbyists.

The New York Public Interest Research Group did a study in 2011 that found 2,700 unique lobbying groups spent a combined $220 million in Albany. Hold that thought a second.

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.