To download the complete version of "The Story So Far: What We Know About the Business of Digital Journalism," a new report on digital news economics from the Columbia University Graduate School of Journalism, click here.

Within a few months, though, Moroney began reconsidering his aversion to a paywall. In remarks in the fall of 2010 to a small group at the Carnegie Corporation, Moroney provided this analysis: “The Morning News does 40 million page views a month. If we could sell out three ad positions on every page every day at a $7 CPM, we would yield $10 million” a year. That, he noted, would cover less than a third of his editorial costs—even as those costs have dropped as newsroom staffing has fallen from 660 at its peak to around 400.

More fundamentally, Moroney had concluded that a focus on volume—either in the form of cheap print subscriptions or of web traffic that generated insufficient revenue—had damaged the news industry’s economic vitality. “What I most fear about this obsession with volume is it underlies the persistent belief that if we will just grow sufficiently large audiences online, then eventually we will sell enough advertising to be sustainably profitable,” he told the group. He added, “There is more supply [of online ads] than there is demand. And the explosive growth of social media only ensures this imbalance of supply and demand will persist for a considerable period of time.”

Others at the Morning News noticed that traffic to the website had grown as print subscription rates rose. Why pay more for print, some readers seem to have reasoned, when you can get the same news free online? “We found when we raised the price of the paper, a lot of people migrated to,” says executive editor Bob Mong.

The News launched an aggressive pricing scheme for its digital content in February 2011. People who don’t subscribe to the paper must pay $16.95 a month to get access to the web, iPad, and iPhone versions of the Morning News. Print subscribers already paying $33.95 a month get unlimited access to any digital edition.

It is a paywall, but not an absolute one. Stories that strike the editors as “commodity” journalism—such as breaking news, or weather and traffic updates that could easily be found elsewhere—are free to all. More proprietary or exclusive journalism requires a subscription. (Currently, about half of the stories on the site’s home page have open access.)

When Moroney announced the pay plan, he and his staff were predicting that page views would drop by 40 to 50 percent. “I’m not confident we’re going to succeed,” he told Nieman Journalism Lab. “But we’ve got to try something.” In an interview a few weeks before the paywall launched, he portrayed the strategy as a way to help return journalism to one of its former, and highly profitable, roles as a one-stop storehouse of local news. “At least for a period of time, you can restore the bundle,” he said.

In late April 2011, six weeks after the pay plan launched, the News did see traffic declines—though less, so far, than Moroney had predicted. Unique visitors were down 17 percent, and page views declined 28 percent, compared to the same period in 2010. Mark Medici, director of audience development for the News, declined to disclose how many new digital subscribers had signed up, but did say that 27 percent of print subscribers had enrolled for digital access.

Traffic declines were also on the minds of Miami Herald executives when they debated whether to institute a pay plan.

The Herald did a survey on its site in October 2009 to determine users’ willingness to pay for its content. It was a voluntary and thus unscientific poll; nevertheless, the results didn’t inspire a great deal of confidence. Fifteen percent said they’d pay for unlimited access; an additional 23 percent said “maybe.” The dollar amounts weren’t meaningful, though; less than 5 percent said they would spend more than $10 a month.

Bill Grueskin, Ava Seave, and Lucas Graves are the co-authors of "The Story so Far: What We Know About the Business of Digital Journalism." Grueskin is dean of academic affairs at the Columbia University Graduate School of Journalism. Seave is a principal of Quantum Media, a NYC-based consulting firm. Graves is a PhD candidate in communications at Columbia University. For further biographical details, click here.