A year ago I wrote a blog post titled Thinking about a paywall? Read this first. If you haven't read it, please do so now, as it's a prerequisite for this one.
It works as I described, providing tools that let the publisher identify high-volume users and target them with a request that they pay something.
Let me explain what it is not.
It's not a paywall, as some have mischaracterized it.
It doesn't cut the site off from the Internet.
It doesn't interfere with social link sharing.
It doesn't discourage sampling. Casual users and new visitors won't even know that it's there.
It's not based on arrogant bellowing about how users "should" pay, or ridiculous claims that the free Internet is ending.
It's not doomed like the Times paywall.
It's not a feeble attempt to milk the cash cow dry.
And it's not driven by belief, but rather by some quantitative analysis leading to some projections that should be tested in the marketplace rather than debated by new-media pundits.
An advertising-only business model has a dangerous characteristic that any farmer would recognize: If conditions shift against it, you're screwed. That's clearly happened as the recession that began in 2007 drove the ad business into the ground.
Anyone who's been in the media business long enough eventually learns that some revenue streams are more affected by business cycles than others. Reader revenue is relatively less affected, and looking for ways to blend it into the mix is a healthy move. It's important to pursue other sources of revenue as well, and that's being done. Polycultures are inherently more stable.