Unlike the Press+ article meter, which lets publishers specify a certain number of stories that readers can access free before they are asked to pay up, the Press+ video meter lets viewers watch a video for a few minutes before they’re asked to pay. The first publisher to use the tool is Courtroom View Network, a service that streams trials online.

Press+ cofounder Steve Brill told The Wrap that the videos likely to work best for this are longer ones “with some kind of narrative arc” and that “the way to get people into video stories is to let them watch it for a little while.”

Many publishers are experimenting with video, but so far the trend has been toward keeping it free. The New York Times, for instance, lifted its paywall on all video content earlier this year. “Part of the reason we’re doing this is because we’re already distributing on other channels like YouTube,” NYT EVP Denise Warren told my colleague Jeff Roberts at the time, “Since it’s already available…it seems inconsistent to keep it behind the gate.”

Meanwhile, the Huffington Post’s streaming video network, HuffPost Live, racked up 445 million views and over 13 million unique visitors a month in its first year.

Video efforts like these are all supported by advertising dollars, but Press+ cofounders Steve Brill and Gordon Crovitz say that publishers are eventually going to come to the same conclusion with video that they did with news: Ads aren’t enough.

And when publishers have put video behind a paywall, Crovitz said, they “make the mistake that some print publishers also made” by installing “a hard paywall, which not only slashes ad revenue but does not allow viewers to sample, to see our proven welcome messaging, and to get engaged in the product before being asked to buy it or to buy an upsell of a subscription to a package of videos.”

“What we’re seeing is a tide sweeping through the industry of publishers lowering their meters and moving to prices that reflect the true value of their content,” Press+ cofounder Gordon Crovitz said in a statement.

Data from the company’s publishers shows that the average price of a monthly subscription was $9.26 in January 2013 — up five percent from July 2012 and 40 percent from July 2011:

In addition, Press+ says its clients are lowering their meters. On average, they offer 10 free articles per month, down from 11 last September and 13 at the beginning of 2012.

It’s worth noting that Press+ works with a lot of large newspaper companies. Pricing is likely to vary at smaller organizations and on blogs like Andrew Sullivan’s Dish (which runs its metered paywall through TinyPass), but it will be interesting to watch whether the trend of upward pricing and fewer free articles occurs across sites.

Photo courtesy of Shutterstock / Voronin76 

On Tuesday, AllThingsD’s Peter Kafka reported that the startup has hired longtime ad vet Trevor Kaufman as CEO and pulled in $1.25 million in seed funding.

Startup Tinypass’s core customers have been hundreds of small-fry news and music publishers who use its services to provide “metered browsing” or ad-free upgrades to readers. In January, however, the company got a big boost when star blogger Andrew Sullivan said he was using the platform to charge readers for his $19.99 annual subscription service.

The new funding and Sullivan’s star power could help Tinypass nip at the heels of the big player in the paywall space – Press+, which was launched by publishing vets Gordon Crovitz and Steve Brill.

Like Press+, Tinypass takes a cut of the paywall revenue (two to ten percent, depending on volume) but also differs as it does not charge a start-up fee.

Although increased competition could lower the prices that Tinypass and Press+ can charge, the good news for the companies is that the overall paywall pie is getting bigger. According to a recent report by news analyst Ken Doctor, it will soon be rare to find a news outlet in North America or northern Europe that doesn’t charge for content in one form or another. Others, like my colleague Mathew Ingram, remain skeptical that restricting reader access is a good idea (see a recent debate over the issue here).

Tinypass, which signed up its first four publishers in December 2011 and says it now works with over 250 publishers (through a revenue share — see below), had tested the metering option with the news site Chicago Phoenix and is now making it available to everyone. The metering function is built into Tinypass’s WordPress and Drupal plugins and its APIs, and publishers can choose to meter by number of articles retrieved or by time frame (say, unlimited content for 24 hours).

Publishers who want to add a meter can choose from two options: client-side, which works by adding a cookie to a user’s browser, or server-side, which a user can’t circumvent by clearing cookies. Publishers can also choose whether they want to include links from social networks in a metered article limit, or whether they want those to be free views.

Tinypass makes money through a revenue share with publishers — taking a cut that ranges from 2 percent to 10 percent depending on volume. (The publisher’s share increases as volume increases.) That’s one way the company differentiates itself from Steve Brill and Gordon Crovitz’s Press+ (now owned by RR Donnelley), which charges publishers a setup fee. Also, Tinypass COO David Restrepo told me, Press+ is “very focused on newspapers and on bundling the physical paper with digital editions,” while Tinypass is “digital-native, digital-first and focused on media” like MP3s and PDFs, not just newspapers.

Tinypass was founded in January 2011 as part of Hudson Media Ventures and has raised $500,000 $1,000,000 in angel funding.

Thirty-nine percent of Press+ publishers let readers view fewer than 10 articles per month for free; more than half of these let readers view fewer than five articles per month for free.

Press+ is presumably sharing this data because it wants to sign up more publishers as clients and doesn’t want them to fear the paywall. Co-CEO Steve Brill said in a statement:

“We know that having a sudden, blunt pay wall pop up before visitors can read anything doesn’t work, because unlike the meter, with its advance messaging that tells people they will be asked to pay after they have read five or ten articles in a month, consumers can’t sample the content and don’t get into the mindset of being ready to pay when they are asked to pay. So some kind of metering is absolutely necessary, not only for maintaining traffic and ad revenue, but also for maximizing subscription sales. However, setting the meter lower, at, say five to ten articles, seems to hit the sweet spot — allowing sampling while enhancing subscription revenue.”

It’s unclear why publishers are gradually offering fewer articles for free, but they may be following the lead of the New York Times, which recently cut the number of articles it offers free online to ten per month, from twenty. It’s worth noting, though, that 61 percent of Press+ publishers still offer at least 10 articles free per month — suggesting that if there is a sweet spot between sampling and revenue, nobody agrees on what it is.

We do — that was that state of digital media when paidContent launched in 2002. Other weird things were happening back then too: People still got much of their news from television and newspapers, and they learned about major events after they had already happened.

There have been some huge shifts since 2002: Tablets and smartphones are now ubiquitous, lots of people read on their digital devices, and just about everyone is part of a social network or three. This summer is the tenth anniversary of our launch. In an effort to gain some perspective on the past decade in digital media, I’ve been reading back through paidContent’s archives — a collection of over 80,000 posts.

Since I was only a freshman in college when paidContent came to life, I often didn’t know, as I read through the stories from the early days, how things had begun or how they turned out. As I watched them unfold, I wanted to grab our readers’ arms and give them advice (“Don’t buy that Zune!” “Invest in Facebook!” “Go for the good Twitter handle now!”). But I also realized how difficult it is to predict success.

Some takeaways from my trip through the archives:  Some companies — AOL and Yahoo come to mind — have been consistently bad at predicting what consumers want. And a couple of companies, namely Apple and Amazon, have been very good at it. Also, being a native digital company helps, but it’s no guarantee of success (what up, MySpace?). And after all these years, it’s still not clear what content customers will pay for, or how much they’ll pay.

Streaming and Moviebeaming

What do analysts, CEOs and bloggers have in common? None of us can predict the future. Roger Ebert joked in 2002 that “on-demand streaming movies on the Web, like HDTV, are five years in the future — and will be for at least another 10 years.”

If Disney’s Moviebeam had been the only game in town, Ebert probably would have been right. When it launched in three cities in 2003, customers paid $6.99 a month to use a device that could hold 100 movies and plugged into the back of a TV set. They also had to pay for each movie they watched– billing was done via the phone line. The company went through various unsuccessful iterations before India’s Valuable Group bought it in 2008. It was never heard from again.

Netflix almost went down the same road. It had a plan to release a Moviebeam-like “proprietary set-top box with an Internet connection that could download movies overnight.” But instead, it decided to forge ahead with streaming — starting with a complicated “quota hours” system in 2007 and moving to unlimited streaming in 2008. By 2010, the majority of subscribers were streaming something, and the company began offering streaming-only subscriptions, though CEO Reed Hastings said that same year that the company would keep shipping DVDs until 2030. (We’ll see about that.)

ABC was the first network to sell episodes of its shows on iTunes, back in 2006, and to stream shows free with ads on ABC.com — and later on AOL. But by the time premium subscription service Hulu Plus launched in 2010, the platforms getting the attention were devices with built-in access, like Internet-enabled TVs, Blu-ray players, and tablets.

Return of the living dead

Speaking of AOL: It’s something of a miracle that the company still exists. In 2000, when it merged with Time Warner, it was valued at $350 billion, and the next year, more than 24 million people in the U.S. were paying for its Internet access service. By the end of last year, that number had dwindled to just 3.3 million subscribers. Here’s a quick recap of some of AOL’s miscues over the years:

• AOL Voicemail ($5.95 per month)
• A teen service called Red (featuring “a talking head—using the image of an actual employee—that uses software to answer users’ questions”)
• A digital music partnership with Burger King
• A reality show called “Gold Rush”
• Social networking site AIM Pages
• Going free
• The hyperlocal Patch blogs

Though AOL was once a high flier, no other company ever liked it quite enough to buy it. Google bought a five-percent, $1 billion stake in AOL in 2005, leading analysts to wonder if Microsoft missed out. That resulted in a $726 million writedown in 2009. Time Warner bought back Google’s stake and finally spun off “the albatross” in December 2009.  AOL is still promising a bounceback. “The executive team expects a profitable content business by next year,” CEO Tim Armstrong said in May 2011.

Yahoo hasn’t fared much better. The company launched Yahoo Platinum in 2003; for $9.95 a month, subscribers got access to audio and videos.  The program was dead by October of that same year. It later tried a Twitter-wannabe microblogging service (“Meme…where you share everything that you find that’s interesting,”). Perhaps the smartest move Yahoo ever made was not buying AOL.

Where did these companies go wrong? In 2010, former Time Warner CEO Gerald Levin pondered that question in an interview with the New York Times . The AOL-Time Warner deal was “undone by the Internet itself,” he said. “I think it’s something that no one could have foreseen, and to this day, whether Apple is going to dominate entertainment or whether Amazon is going to dominate publishing, all the old business plans are out the window. How do you get paid for content?”

Know what’s cool? A billion dollars

In 2006, an RBC Capital analyst estimated that a certain social networking company would be worth $15 billion in a few years, based on “raw, unprecedented user/usage growth.”

Six years later, Facebook went public with a valuation of $104 billion. Too bad the analyst wasn’t talking about Facebook but about MySpace. The social networking company that Rupert Murdoch acquired for $580 million in 2005 sold for just $35 million in 2011.

Why did Facebook soar while MySpace — and other social networking services like Friendster — sank? It allowed people to build real connections using their actual personal information, and rolled out a product that was ready to scale and had good technology. Other companies realized sharing was important too — in 2005, Yahoo SVP Jeff Weiner called sharing “the next chapter of the World Wide Web” — but Facebook was able to implement it in a way that kept users coming back. The site surpassed Yahoo and AOL for “stickiness” in 2009, when Nielsen found users spending an average of four hours and thirty-nine minutes a month on Facebook.

Social has already disrupted some industries — witness the rise of Twitter and the way it has changed the way news is reported, with stories like Osama Bin Laden’s assassination breaking there first. In a sign of the importance of these emerging platforms, newspapers like the Wall Street Journal and New York Times are launching “Everywhere” initiatives to deliver news to readers where they are already hanging out.

Fast food and music don’t mix

Hard to believe it now, but there was real skepticism that iTunes’ 99-cent songs would be able to compete with peer-to-peer file-sharing services. “According to academics who’ve studied the economics of digital music distribution,” we wrote in 2003, the year iTunes launched, “the cost still seems too high to attract users of peer-to-peer file trading services.” The piece cited an economist who believed “the appropriate price of a downloaded song is 18 cents.” In fact, Real Networks dropped its song prices to $0.49 in an attempt to compete against Apple.

In the end, consumers choose selection and convenience over P2P networks. We called iTunes “a kickstart for the micropayments industry.” Was it? While Steve Jobs said in 2004 that Apple wouldn’t hit its one-year, 100 million songs downloaded goal, global digital music sales crossed $1.1 billion in 2006. In April 2008, Apple surpassed Walmart  as the largest music seller in the United States.

The company that arguably started the digital music revolution — Napster — didn’t survive. Once it no longer offered “free,” it was done, though it tried to reincarnate itself: launching a mobile music service, “Napster To Go,” with AT&T in 2004 (the one smartphone that supported it could hold up to 6 songs), partnering with Circuit City on a digital music store, getting itself acquired by Best Buy in 2008 ,and then being bought back by Rhapsody in 2011. Unfortunately, Rhapsody was already losing out to newer (and free) streaming services like Pandora and Spotify.

The partnerships with Circuit City and Best Buy, though, were probably the kiss of death. One of the big trends of the past 10 years has been brick-and-mortar retail stores’ consistent failure to compete effectively against digital-native companies. Best Buy wasn’t the only retailer to try to crack the digital-content business — and fail: Target and Sears both took a shot. And McDonald’s sold digital content over its WiFi network and even tried DVD rentals in its restaurants.

Do you like the feel of paper?

Just as digital music didn’t really take off until Apple introduced the iPod, the ebook revolution didn’t take place until the arrival of the Kindle. In paidContent’s early years, ebooks were written off as a failure in part because publishers couldn’t figure out what to do with DRM. (In 2003, “temporary electronic ink” that would disappear after a few months was floated as a possible solution.) Barnes & Noble decided to stop selling ebooks in 2003, and Yahoo stopped selling them in 2004.

Meanwhile, Amazon and Google were pushing forward. Google launched Google Print – now called Google Book Search, and still besieged by lawsuits seven years later. Amazon tested two now-defunct programs: Amazon Pages, which allowed customers to buy access to digital copies of select pages from books, and Amazon Upgrade, which bundled print books with online access to the complete work.

Customers weren’t biting. Then Amazon came out with the Kindle in 2007 for $399. Less than two years later, Amazon was selling more Kindle books than print books, and ebooks now make up over 20 percent of some big-six publishers’ sales. Barnes & Noble has had some success with its Nook e-reader and digital bookstore, but bankrupt Borders shuttered all its stores in 2011. Meanwhile, the Department of Justice suit against Apple and five big publishers for allegedly colluding to set e-book prices drags on.

Good thing Steve Jobs looked beyond ringtones

A Forbes survey back in 2002 found that “business professionals” would be willing to pay for “news content to be delivered to their cellular devices,” and some media companies tried early mobile experiments. Verizon offered a cell phone version of the Yellow Pages — which, at $19.95 per year, gained 15,000 subscribers in three months. But starting in 2004, everyone decided the future was in ringtones. A $4 billion global business by the end of the year, one company projected.

So, so many ringtones. You could buy them from Rolling Stone or from an ATM-like device called E2Go. A fall 2004 marketing campaign let you mix your own ringtones on Levi’s website. Billboard launched a top ringtones chart.

Could ringtones “prove to be a passing fad”? we wondered late in 2004. Luckily, yes — a new technology came along to shake up the mobile market. No, it wasn’t the $500 ESPN phone, but the iPhone, which came out in 2007. And by opening its platform up to third-party app developers, Apple got users ready for its next ecosystem-changing device, the iPad, in 2010.

Monetizing mobile

Advertising has always been a fuzzy business — how exactly do you measure engagement and success? Well, that’s still the big debate about advertising in the digital era.  ”If here’s anything that’s really holding back ad spending on the web, it’s the lack of good measurements,” Tim Armstrong, then Google’s VP of national sales, said in 2007.

Mobile advertising has also faced obstacles. In 2006, mobile carriers began allowing advertising despite fears of annoying customers. Customers were indeed annoyed – 79 percent of them found mobile advertising annoying, according to a 2007 Forrester study — but they could “see the potential benefits of mobile advertising and marketing to themselves,” particularly if they could get a useful special offer or coupon.

Further complicating matters for advertisers: The smartphone market is fragmented among different brands — marketers don’t want to spend the money to create different ads for Android and iOS — and there are two mobile ad universes: mobile browser and apps.

Nevertheless, mobile advertising has gained ground, crossing  $1 billion in the U.S. for the first time in 2011, according to the Interactive Advertising Bureau, totaling $1.6 billion for the year.

The next opportunity is social media advertising. And once again, it will be a challenge to figure out some standardized metrics. What’s a retweet worth, anyways?

Back to where we all began

Though micropayments worked well for music when Apple launched iTunes, the path to payments for written content has been rockier. In 2004, we wrote that “micropayments today are still characterized by a large number of competing transaction types” – including direct-to-bill, merchant aggregation, prepaid accounts and direct transfer – and “each of these face the current incumbent in digital content distribution: the flat-fee subscription model.”

Eight years later, it appears that the subscription model has won out. The iPad opened the door for magazine and newspaper publishers to create new revenue selling content on that platform, but the results have been mixed. When Rupert Murdoch’s “The Daily” iPad newspaper launched in early 2011, the company called it “the model for how stories are told and consumed.” We wrote, “The bet here is that while consumers are less and less likely to reach into their pocket for a few quarters to buy a newspaper, they might not care about the 14 cents on their credit card for a copy of an e-newspaper.” A year and a half later, The Daily has over 100,000 paying subscribers — but it’s living on borrowed time and may not get through the five years its publisher has said it needs to break even.

Writing for the web, of course, has been around for awhile. At the beginning of the decade, blogging was called “nanopublishing,” and the question was how blogs could support themselves doing it. All sorts of models have arisen. For example, Gawker tried a licensing deal with Yahoo, but that relationship ended a year later. The deal “garnered way more attention than we expected, but less traffic,” Gawker CEO Nick Denton said in 2006.

Some bloggers have stayed independent and make a living from advertising (or from their day job); others write their blogs under a newspaper, website or larger magazine’s umbrella — see the Dish’s Andrew Sullivan, FiveThirtyEight’s Nate Silver, WaPo’s Ezra Klein. Or, they go to work for the Huffington Post!

Magazine companies have grappled with whether to bundle digital editions with print subscriptions or charge for them separately. Time Inc. — which first put digital editions of its magazines behind AOL’s paywall in 2003 — started out charging separately, but today Time Inc. and Condé Nast print subscribers get the digital edition free. Hearst, meanwhile, is charging separately, and it said its digital business in the U.S. became “solidly profitable” for the first time in 2011.

Could there ever be a Netflix for magazines? Time tried it for print versions with its 2008 Maghound service. It failed, due to a lack of marketing and reader interest. Magazine publishers are trying again with joint venture Next Issue Media.

Many newspaper publishers, most notably the New York Times, tried paywalls at the start of the decade and then abandoned them – only to return to the model in the past couple years.  In its most recent earnings report, the NYT said it has 454,000 digital subscribers. Is that enough to sustain the newspaper in its 21st-century transition?  Probably the best answer to that came from  Vivian Schiller. But it was in response not to the NYT’s recent digital subscriber numbers, but to the NYT’s decision in 2004 to close the paper’s first paywall, known as TimesSelect. Schiller, then the SVP and general manager of NYTimes.com, was asked whether TimesSelect had worked.  “It did work,” she said. “It’s just a matter of as compared to what.”

Birthday cake photo courtesy of Shutterstock user [Robyn Mackenzie].

TV photo courtesy of Shutterstock user [Somchai Buddha].

Zombie hand photo courtesy of Shutterstock user [lineartestpilot].

Piggybank photo courtesy of Shutterstock user [cardiae]

Fast food photo courtesy of Shutterstock user [Sergio Martinez].

Book photo courtesy of Shutterstock user [TrotzOlga].

Ringtones and apps photo courtesy of Shutterstock user [violetkaipa].

Cash register photo courtesy of Shutterstock user [titelio].

Magazines photo courtesy of Shutterstock user [bernashafo].

– All 285 of Press+’s active affiliates have opted for meters over full paywalls. “We now have the data to show that meters are better than old-fashioned paywalls, so it’s become easy to steer publishers to the meter,” Crovitz tells paidContent.The pitch for meter over wall? “With meters, publishers keep all their online ad revenue and readership whereas of course with paywalls there’s a big decline in both.”

– The average Press+ affiliate meter runs 14 page views a month, with the average dropping as publishers stabilize the impact on advertising and traffic. The higher meter limits tend to affect less than 10 percent of users. The lower the meter, the faster subscription revenue grows, according to Crovitz. So far, the highest conversion rates come when a user is offered the reminder to subscribe just before the free access ends.

– New York Times print subs get full access to digital as a value-add but 90 percent of Press+ affiliates are charging print subscribers extra, on average about $2 a month compared to an average of $6.50 a month for digital-only access. So far, according to Press+, print subs aren’t very price sensitive, leading publishers to experiment with higher prices. Some affiliates are trying what Press+ calls an opt-out bundle, combining print and digital in a higher-priced bundle that ups the subscription price — then letting print subs opt out of digital. Press+ claims papers where digital is included for a 10 percent price increase over print, publishers are seeing 90 percent adoption of digital.

Who are these publishers? About 50 companies are represented, including MediaNews, Lee Enterprises (NYSE: LEE), McClatchy (NYSE: MNI), Tribune, GateHouse, and MediaGeneral, along with indies like the Chicago Sun-Times and Omaha World-Herald. The other 30 affiliates include The Onion, non-U.S. papers, magazines, online only.

Of the 285 who have launched so far, 255 are U.S. based. Crovitz says another 185 U.S. papers are set to launch in coming months. They don’t track circulation but Brill estimates about 40 percent of their current affiliates are smaller papers with 25,000 or less print circ.

Does this fill the gap left by the Pew Research Center’s PEJ study? Not really — Press+ is a business offering selective data, not an independent research unit, and it leave individual results and identifiable data to the publishers. But it’s a business with the ability to aggregate increasingly meaningful results from a substantial number of publishers, which in turn can help its own clients and those who choose to go a different way make informed decisions.

I’d like to see more details, like how the income that is being generated fits in with the digital advertising and other non-traditional efforts PEJ addressed in what it says is the first of an ongoing series that will explore digital content revenue eventually. Are the papers that have added meters not only increasing digital revenue but stemming the effective loss PEJ found of $7 print dollars for every digital buck they bring in? How many subscribers are there, how many re-up and how does their engagement with the site change once they’re paying for access? How many publishers will look at the overall results and decide it isn’t worth continuing or will double down? (If you’re a publisher with a meter ticking or another model in play, let’s talk. I’m staci AT paidcontent.org.)

Steve Brill was the first person I heard from Monday after I wrote of my dismay at the lack of paid content data from PEJ. A year ago, when it sold to RR Donnelley (NSDQ: RRD) for what we now know was $19.6 million in cash, Press+ had about 20 affiliate launches. It now has 285 with more coming, likely one reason co-CEOs Brill and Crovitz received $15.3 million from RR Donnelley in their first-year earnout.

“That projection keeps getting higher because there is now an avalanche,” Brill wrote me. “A year ago that number was about 20. Inertia has flipped and become a herd.”

The deal structure revealed in this week’s 10-K filing shows a payment of $19.6 million (plus $400,000 in cash that came with the company) and a contingent payout — what we call an earnout — of $15.3 million “based on achieving certain volume milestones for Journalism Online’s business following its acquisition by the Company.” The language describes the “prior owners” but only co-presidents Brill and Crovitz went to Donnelley and would be eligible for the additional pay.

That puts the total deal value at $35 million — for now. It might stay capped but my understanding is the deal was structured in a way that would allow for additional pay under certain circumstances that have not been spelled out publicly and could reach the higher end of the originally reported range. While Brill and Crovitz were out publicly selling the concept of Journalism Online and e-commerce product Press+ as possible salvation for newspapers and online news outlets, Chicago-based Donnelley is very quiet about goals and process.

Journalism Online, founded in April 2009, went from startup to exit in just under two years. This past year it went from 20 affiliate launches with various business models ranging from metered pay to donation to more than 200; Crovitz told The Globe and Mail 300 launches already are planned for this year. Customers include McClatchey, Torstar, Postmedia, Media News and Lee.

(Hat tip to Theo Francis for tweeting about the filing and to a reader for bringing it to our attention.)

In an interview late Thursday afternoon, co-presidents Brill and Crovitz confirmed that they were staying with the company they co-founded with Leo Hindery Jr. in April 2009 and that their team will move intact. They declined to say how many employees that included or how long the two of them would stay. “We’re here. We’re not going anywhere,” said Brill.

All Crovitz would say about the value of the deal: “We’re very happy with this transaction.” As a sign of the shift from startup to part of a public company, the pair, used to managing their own interviews, were joined on the call by RR Donnelley’s communications head Doug Fitzgerald.

As paidContent reported earlier today, Journalism Online was only on the block briefly before the RR Donnelley deal was brokered by the Jordan, Edmiston Group. The decision to look for a buyer came as the company was looking at further investment. None of the three would talk about the process or the sale specifics. Crovitz said the Chicago-based company’s publisher-centric approach made it the perfect fit. “Without getting into names of others, that’s not true of people selling tablets or selling search advertising or other services.”

FItzgerald said Press+, the name of JO’s paid content e-commerce system, will be the first offering of its kind for the Chicago-based company but “expands an area already working with publishing clients on.” Donnelly’s global footprint and existing relationships should help Press+ expand while the payment platform gives the larger company another offering for its clients and the potential to expand its own base. “It’s an opportunity to have our organization provide solutions that really span the breadth of the supply chain.”

Crovitz, the former publisher of the Wall Street Journal, said the sale also comes as the paid content question shifts from whether or not consumers will pay. No details (yes, that was a recurring theme of this session) but he said there are enough sites now running Press+ to see significant data patterns. “The religious debate is over,” he said. Some percentage of people will pay for content and with the right balance, sites can maintain traffic and retain readers.

The escalating data stream as they roll out to more sites should allow for more granularity. Brill said the question now turns to pricing and how results may vary from brand to brand.

When the New York Times Co. (NYSE: NYT) came up, they mentioned another pattern they’re starting to see. Unlike the Journal, the Times is not charging print subscribers extra for online access. That may be a mistake. Brill said their research shows people are just as like to add the online option when it’s heavily discounted as they are when it’s free. And, said Crovitz, when it’s free to print subscribers, fewer people seem to sign up for the online-only subscriptions.

From a business standpoint, it’s safe to call this a rational exit. It makes sense for Journalism Online to be part of a company like RR Donnelley and for Donnelley to be able to offer a flexible payment system for publishers. JO gets additional investment; RR Donnelley gets to skip the initial R&D phase of building one that works. Jon Housman, president of digital journalism initiatives for News Corp., wouldn’t disclose details but told paidContent the company’s investment “appreciated considerably.”

It’s not quite the result the co-founders had in mind in April 2009 when they announced Journalism Online, LLC, which launched with an undisclosed amount of funding from Hindery’s InterMedia Advisors, LLP and the trademark bravura that accompanies a Steve Brill endeavor. The launch followed Brill’s splashy memo on how to save journalism and the New York Times.

The startup was only on the block briefly and very quietly. Journalism Online was weighing additional funding earlier this year and decided to explore a possible sale. The Jordan, Edmiston Group, Inc. brokered the deal with Donnelley. Crovitz and Brill agreed to stay with the company to manage it.

The timing of their sale with the start of the New York Times Co. (NYSE: NYT) ambitious freemium scheme is striking: while Journalism Online had NDAs and affiliates with a large number of publishers and started small trials with some of them, it couldn’t gain a foothold with the NYT and never broke through with a high-profile announcement that matched expectations or hype. The News Corp. investment showed interest from a major publisher and proponent of pay systems but Press+ has yet to show up on the company’s sites. (My understanding is some News Corp. properties are exploring use of Press+ and could start to use it this year.)

But Journalism Online was able to stick fairly much to plan, methodically building a complex system capable of scaling and flexible enough to be used in a variety of circumstances for a wide range of sites. News Corp.’s Housman describes the system as “nimble.” I’ve seen one headline this morning calling JO a “paywall operator” but that’s too limiting a description. Press+ can be used for donations, as is the case with ProPublica and for memberships, in addition to various metered approaches.

More to come.

—————————————————————

Release:

R. R. Donnelley & Sons Company (Nasdaq:RRD) announced today that it has acquired Journalism Online, LLC and its Press+ offering which enables publishers to seamlessly integrate an innovative paid content engine with their websites. Journalism Online’s Press+ system supports publishers as they offer audiences a mix of free and subscription-based premium content. Journalism Online is managed by two of the company’s co-founders, veteran digital-media leaders Steven Brill, founder of The American Lawyer magazine and Court TV, and L. Gordon Crovitz, a former Wall Street Journal publisher.

“Our publishing customers continue to develop multi-channel advertising and editorial strategies and Press+ provides a valuable tool for monetizing content,” said Thomas J. Quinlan III, RR Donnelley’s President and Chief Executive Officer. “We provide solutions across the entire breadth of the publishing supply chain, from content creation and digital asset management through subscription solicitations, processing and renewals. Press+ enhances our offering and opens new avenues for publishers to generate incremental subscription and advertising revenue.”

Steven Brill said, “We are delighted to bring Press+’s innovative capabilities to RR Donnelley and look forward to engaging with the broad array of consumer and b-to-b publishers with whom RR Donnelley has relationships. For nearly 150 years, RR Donnelley has been enabling publishers to reach their customers with a viable, cost effective business model. We are excited to be working with them as they continue that tradition and that mission in the digital age.”

The Press+ offering enables publishers to offer readers a mix of options for subscribing to premium content, including metered and mobile/tablet access, enhanced site functionality, out-of-market access and more. The system also provides publishers a variety of ways to engage readers with paid content, such as day or week passes, print/online bundles, monthly or annual subscriptions, and others that even allow readers to receive credit for previous day passes as they select a longer-term subscription.

L. Gordon Crovitz stated, “The scalable Press+ model enables publishers to quickly test and implement a variety of content distribution strategies. Our experience demonstrates that publishers using Press+ for metered access to web sites and other digital products retain their online ad revenue and readership while adding a valuable revenue stream from online subscriptions.”

“We continue to engage our customers with integrated communications solutions that address both cost compression and revenue enhancement,” added Quinlan.

More information about Journalism Online and Press+ is available at http://www.mypressplus.com.