“The outlook for the ad business online is quite bleak,” says Grimshaw. “There’s just not enough money there.” As a subscription site with a select audience, FT.com can charge higher rates for ads than general-interest sites. “We can create scarcity in a marketplace that has no scarcity,” he says. “In that light, subscriptions and ads are complementary.” But given that FT.com doesn’t use networks to fill up unsold ad space at discount prices, Grimshaw says “I’d be surprised if we sell 50 percent” of the site’s inventory.

After years of internal debate, The New York Times has entered the realm of pay-for-access. If its audacious and complex plan succeeds, that will likely encourage many other publishers to follow suit.

This isn’t the first time the company has tried online subscriptions. In 2005, the Times launched its TimesSelect service, charging those who didn’t get the print edition $49 a year to access opinion pieces. After a fast start, with more than 120,000 subscribers signing up in two months, the plan stalled, and the Times closed it down two years later; executives said the $10 million a year the service was generating wasn’t enough to compensate for the lost traffic and ad revenue.

So why would the Times take a new gamble to charge for digital access? Part of the answer lies in how dramatically the company’s revenue mix has changed in recent years.

In 2005, the New York Times Media Group, which is composed primarily of the Times’s paper and website, generated nearly $1.9 billion in ad and subscription revenue; about a third of that came from circulation. Five years later, ad revenue had dropped by nearly $500 million, while circulation revenue had increased because of aggressive price hikes for home delivery and newsstand sales. Today, circulation revenue for the group almost equals advertising revenue.

The Times’s website is tremendously popular, but digital ads have been growing unevenly and don’t come close to making up for the shortfall in print ad sales. Indeed, the site, with more than 30 million monthly unique users in the U.S., contributes less than 20 percent of the Times’s overall revenue.

So the Times devised a pay scheme that it hoped would be porous enough to allow occasional readers (around 85 percent of the total) to browse the site for free, but priced aggressively enough to generate significant revenue from its most devoted readers. It was a difficult plan to execute—requiring more than fourteen months, and reportedly costing tens of millions of dollars.

When the Times introduced the plan in March 2011, many found it to be unnecessarily complex. Users are supposed to be limited to twenty stories a month before they hit the wall. But because there are so many exceptions depending on how one accesses the site—for example, via Google, Twitter, or a blog—even some experts are befuddled by the plan. Staci Kramer, editor of paidcontent.org, which covers the digital media industry, wrote that “the logistics are far more complex than anything should be that doesn’t require a degree in quantum physics.” There are different rates for online, smartphone, and tablet access, ranging from $195 to $455 a year for the full package. Consumers can’t get annual, or even monthly, subscriptions, because everything is priced in four-week increments. And it’s expensive—more than twice as much as WSJ.com for full access. The price led one commentator to headline his blog post, “The New York Times is Delusional.”

The Times is unusual among big publishers in that it doesn’t require print subscribers to pay anything to access its digital editions. Both WSJ.com and FT.com have long charged everyone for online access, on the theory that digital editions offer utility, archives, and tools that the print edition can’t. And the Times is offering its print readers a sweet deal: weekend-only subscribers can pay as little as $327 a year, and in the bargain get a digital package worth almost a third more. Times executives insist this isn’t an effort to prop up the company’s more lucrative legacy revenue. “We didn’t make this decision to bolster print,” Janet Robinson, the Times’ Company CEO, said shortly after the pay plan debuted. “We made this decision to create a new revenue stream.” But given the way the offer is structured, it’s hard to argue that the two aren’t closely tied. The pricing—which is higher for tablets than for the web—also reflects Apple’s decision to take a 30 percent cut of subscriptions purchased through iTunes.

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.