“[T]he launch of the pay model is the most important and most successful business decision made by The New York Times in many years. We have around 700,000 paid digital subscribers across the company’s products so far and a new nine-figure revenue stream that is still growing.”

Thompson added that media pundits predicted that the Times’ subscription model, which is based on a so-called “metered paywall,” would be a disaster when it launched in 2011. Since then, he noted, it’s become a standard for the rest of the newspaper industry. ”In modern media, you could make the case that the best way forward is to listen carefully to what the industry has to say and then do the exact opposite.”

Thompson also equated disruptions in the news business to what’s happening in other industries, like high tech and car rental, and said that risk-taking is the secret of America’s culture of innovation and entrepreneurship.

Commencement speeches are, by nature, restricted to this sort of soaring stuff. A skeptic, however, might note that the New York Times‘ digital subscription model has already begun to plateau and that the company is still shedding ad dollars and assets. Likewise, Thompson, who arrived from the BBC only months ago, still has to prove he can run an institution that isn’t supported by mandatory contributions from the public.

But the tone of Thompson’s speech is the right one, and it’s welcome to see the New York Times waving its banner not just in the safe halls of Columbia’s journalism school but among the MBA crowd as well. If you want to read more of what he said, here’s a longer excerpt:

The American news business is living through revolutionary times. For The New York Times, which I joined six months ago, it means catapulting the Grey Lady into a world very different from the one in which she spent her first century and a half: multimedia, multi-platform, multi pretty much  everything.

There are some things we’re not going to take risks with. The quality, authority and accuracy of our journalism. Our values, including the time-honoured but still vital tradition of keeping our journalism independent from the commercial interests of the company. In the age of so-called ‘native’ advertising in which the boundary between editorial and commercial content is more and more frequently blurred, that tradition of maintaining a clear line between the journalism and the business of The New York Times is more important than ever.

But we will not secure the future of The Times without the kind of bold innovation – in products and services, in
business-model – which is intrinsically and necessarily risky. Two years ago The Times launched a new digital pay model, essentially asking users of The Times on digital to do what more than a million print users of the newspaper were already doing, which is to pay a regular subscription in return for extensive access to our journalism.

The consensus among the experts was that it wouldn’t work, was foolhardy in fact and not needed. People just weren’t prepared to pay for high quality content on the internet and, besides, wasn’t digital advertising enough – wouldn’t it grow until, just as with print advertising in the golden age of physical newspapers, it alone was enough to support America’s newsrooms?

In fact the launch of the pay model is the most important and most successful business decision made by The New York Times in many years. We have around 700,000 paid digital subscribers across the company’s products so far and a new nine-figure revenue-stream which is still growing. Much of the rest of the US newspaper industry is now following suit. And developing this pay model, launching a suite of new subscription products to attract additional new subscribers, is central to our plans for the future.

What’s interesting, though, was that initial widespread skepticism. It won’t work. It’s mad. They’re barking up the
wrong tree.

In many ways, the thing that gets disrupted in a disruptive age is the conventional wisdom. Wherever you end up, in this country or abroad, starting your own business or joining an established company large or small, you’ll bump into conventional wisdom and all the apparently excellent advice that flows from it. But the definition of a disruptive age is one in which the discontinuities outnumber and overwhelm the continuities and in which predictions based on the past or the smooth projection of current trends into the future frequently prove unsound. Conventional wisdom tries valiantly to keep up, to recalibrate in the light of recent developments, but because it cannot foresee transformational breakthroughs or the kind of behavioral and business-model pivots which digital technology makes possible, it never can.

Take my industry. The movies are finished. TV advertising is dead. Exactly what happened to music will happen to TV. Nobody wants news anymore. No one will ever pay for anything on the internet. Not just said, but said widely and widely believed. And – for the most part and within the time horizon which the prophets themselves were suggesting – just plain wrong.

All of the strategically successful things I’ve been involved in – whether a set of new TV channels or developing the BBC’s digital on-demand service, the i-Player – have had this thing in common: that, at the point of launch, pretty much everyone not involved in the project has agreed that it was going to be a total disaster. In modern media, you could make the case that the best way forward is to listen carefully to what the industry has to say and then do the exact opposite.

In case you missed it, the controversy began on Friday, when the New York Post reported that merchant bank Goldman Sachs was annoyed that Bloomberg reporters were tracking employees’ log-on activities. The matter soon gained steam when BuzzFeed reported that Bloomberg brass had long known about the practice, and with the news that the Fed and Treasury were investigating the situation.

The company stonewalled at first but on Sunday, Bloomberg News editor-in-chief, Matthew Winkler, addressed the situation in detail:

“Our reporters should not have access to any data considered proprietary. I am sorry they did. The error is inexcusable,” wrote Winkler in a blog post. The rest of the post, however, amounted to a pushback; Winkler explained that the practice was nothing new, and that reporters only tracked “mundane” information.

As bad as voicemail hacking?

So what to make of all this? Did Bloomberg engage in sinister “snooping” (one NYU journalism prof has already compared the incident to the infamous phone hacking conducted by News Corp in Britain)? Or is just this a tempest in a teapot egged on by Bloomberg’s competitors in the news media?

The answer is somewhere in between. On one hand, Bloomberg reporters didn’t do anything approaching the UK scandal — monitoring bankers’ log-in activities is nothing like breaking into a dead girl’s voicemail. Moreover, the Bloomberg “tracking” appears to have done little more than confirm if someone still worked at a certain company. As a source told BuzzFeed’s Peter Lauria, “LinkedIn Pro is more useful and has better information for finding sources and helping to break news.”

All this suggests that some of the the fuss is not about what Bloomberg reporters actually did, but instead is tied to secretive nature of the company itself. This is reflected in a Quartz report that characterizes Bloomberg as “a black box” and portrays a data-obsessed, almost cult-like corporate culture.

News and power of the platform

On the other hand, the Bloomberg episode does raise ethical concerns over how proprietary platforms — including not just Bloomberg but also LinkedIn or Facebook — should handle customer data for news purposes.

The issue isn’t just academic. More and more, platforms are relying on news (think of “LinkedIn Today”) to keep users on their sites. And, as Bloomberg journalists know, customers’ activities on those platforms can be a source of news — and better yet, a source of exclusive news.

The question is where this all this should stop. Would you like reporters to know when you suspend newspaper to go on vacation? Probably not. Would you like your cell phone carrier to use the location of your calls as a source of news? Definitely not. The Bloomberg episode, therefore, appears to be less of a snooping scandal than it is a cautionary tale about what can happen when the line between a company’s news and data gathering operations get blurred.

Getty Images

If I ever run into New York Times executive editor Jill Abramson (unlikely as it might be) I will sure as hell let her know that she is absolutely right to be excited about what her paper did with Snow Fall, which in my opinion was one of the first truly post-tablet storytelling experiences. At the Wired Business conference in New York earlier this week, Abramson said:

“Snow Fall” is now a verb.  “Everyone wants to snowfall now, every day, all desks,” she said. Reporters are waiting for time to “Snow Fall” their bigger story.  She said that the story originated from the sports desk — and took “months and months and months” of time —  but Snow Fall-type projects can come from anywhere.

Snow Fall, in case you missed it, was a multimedia project that included a gripping six-part story by John Branch, one of the Times’ Pulitzer Prize-winning writers who was intrigued by the growing number of skiing fatalities. The stories were presented with interactive graphics, videos and bios of various snowboarders and skiers. It is brilliance personified and was rewarded with 2.9 million visits and 3.5 million page views within the first six days after publication. (The Times doesn’t reveal the total traffic it received since its release in December 2012.)

Snow Fall (and other such attempts) represent a great opportunity and the future for news organizations like The New York Times, especially as they are right now in a losing battle for attention with upstart competitors that include everyone from BuzzFeed to The Huffington Post. If you are the New York Times management, it is time to take a gamble: spend $25 million on creating 100 Snow Fall-like projects.

Money for something and clicks for free

In fact, it is important that our media brethren at the Times think even bigger than that, eventhough it would also mean taking a more prosaic, mercantile and business-like perspective to what they do.

They need to NOT think about Snow Fall as an add-on — as something that makes traditional content more web- or mobile/tablet-friendly — and instead treat it as a brand-new kind of media product that is created especially for the multiple device/many-screen world.

I have been involved with online publishing for a very long time — 18 years to be exact. And in that time I have seen the incumbent media make the same mistake again and again. They’ve often tried to adapt the content they’ve created for newspapers and magazines to the online world. And when they did embrace online, even then the online reporters were asked to do the same thing they did for the newspapers or the magazines.  (The Times, to its credit, published Snow Fall first online, and then in print three days later, which suggests it had a pretty clear understanding of the digital potential of a project like this.)

Yes Dorothy, the Internet is different

The internet is and will always be an immersive, interactive and communal platform. Many publishers continue to treat it like the old two-dimensional medium. Every time we have some major news events, such as the recent Boston tragedy, the social web brings the consumers of content into our newsrooms and makes them part of the process. It is one of the reasons why most of the big media still don’t get blogs. Sure, some writers like David Carr or Paul Krugman are an exception, but look at some of the Times blogs and you see they are just news stories (or features) retrofitted for the blog medium.

Federal agents descend on the home of a suspect-at-large in the Boston Marathon bombing. Getty Images

Blogging is a way of editing the world and presenting it to my community, and that means everything from photos, links, tweets and videos, in addition to sharing my raw thoughts and fully packaged features, scoops and even basic news. Every act of sharing tells you what I am interested in and what I am willing to learn and talk about.

There is a failure in the media business to understand that the medium and the content are intertwined much like those lovers on the walls of Ajanta and Ellora caves. It was one of the many reasons why Rupert Murdoch’s The Daily failed to impress me. It didn’t really invent a new form of storytelling for the tablet.

Now take all of that as context and then understand why I keep harping on the point that Snow Fall-type products are a brand new media, a whole new style of storytelling and a model for 21st-century journalism — one that doesn’t sacrifice the best of our profession, but takes it by the scruff of its neck, and drags its bloated, aging body into the new world and revives it with a shot of adrenaline.

Mr. Excel meets Ms. Editor

Getty Images

However, that is only part of the story. The trick is not to get married to just the oohs-and-aahs of the Snow Fall, but to think of it as a business opportunity, much like the way Hollywood studios creatively monetize their blockbusters. My question is why can’t newspapers and magazine companies take the same approach and build a business model that actually factors in various opportunities that something like Snow Fall can offer?

So instead of starting with a newspaper story and adapting it to different formats, the Times should start with the Snow Fall. If you look at Snow Fall closely, you can see a cohesive approach to content, one that adapts and morphs to not only the medium of access, but to diverse business models — much like the movies.

From my own experience at magazines, I can tell you producing features isn’t cheap and can easily cost tens of thousand dollars, depending on the publication. The longer the lead time and higher the profile of the story, the bigger the costs. So from that perspective, spending some more on the post-tablet version of the feature shouldn’t break the bank.

The current editorial effort is to create something for a day or two of attention in the newspaper and hopefully for tens of thousands of pageviews. Why not start with the apps and e-readers (both paid), then follow up with the web version and then get to the newspaper. While apps and selling e-reader-oriented content might involve the Times learning new tricks, the company doesn’t need to change much for the latter two channels.

Blame my enteprenurial tendencies, but when I was experiencing Snow Fall, all I could see was stunning brand-advertising opportunities, that went beyond the dumb, commoditized advertising the Times is forced to put on its website. Why not embed a tasteful Land Rover ad or throw in one for Moncler? That is native advertising that actually allows organziations like the Times to live by their ethos and maintain the fidelity of their brand.

Hollywood, Baby

Now, let me explain why the Times can do it. And for that I will point to Hollywood again. One of the reasons why Hollywood studios succeed with the multi-tier approach to their “product” is because they do their best to ensure that they create an optimum experience. And they can do that with the right story, the right stars, the right production values and, most importantly, they have distribution. And gobs of money.

The Times and other big media companies have a lot of those same capabilities. They have great stars (real people, for god sake, are better stars than anything Hollywood can produce — see the Cleveland samaritan), they have great storytellers (editors and reporters, whose Pulitzers are testimony enough) and they have the ability to create the right production values (photographers, visual artists and designers). The Times also has a big audience – 35 million monthly visitors to their website in the U.S. alone, according to comScore – which means it has a lot of attention, which can be channeled effectively to promote new concepts.

Distribution Matters

Just as blockbuster movies get a lot of attention from media, Snow Fall got a lot of attention from the rest of the media community. Those millions of monthly visitors and lots of advertising space on print means distribution isn’t really a problem. And despite the financial headwinds, many of them — including the Times — still have a lot of money to try and finance a few dozen Snow Falls.

It isn’t clear how much money the Times spent on Snow Fall, but let’s just assume it was a small fortune. (Yes, I asked them and got this response: “We can’t disclose details about costs. Really, this is a newsroom effort. The business side works with the newsroom, of course, to provide the infrastructure and technology they need to tell stories in innovative ways.”)

And in exchange, it got a few million page views, but I am guessing they also built a nice backend infrastructure to create more such projects. As a result, the next Snow Fall is going to cost less, with most future spending going to the creative: words, photos, other multimedia elements and design.

So what will the Times (or someone like them) need to get it done? Simply put, a departure from the incumbent thinking, embracing today’s reality and re-imagining the work flow of a big city newspaper. In other words:

• Re-imagining its business model to factor in the reality of today’s world and forget the legacy of newsprint.
• Create a new breed of “producer” who can switch between Excel and content.
• Create a whole new breed of a journalist — one who has old-school values but also the ability to tell a story that works in many mediums of today.
• Build an editorial creative machine that works differently from a print-centric editorial group.

Now, if they can actually overcome their angst — and it hurts me to say this — they can change the conversation in the media business away from the increasingly shallow content and instead bring the focus back to quality and in-depth journalism, which is their stock in trade. If the New York Times management were feeling bold, it would put $25 million to work on creating 100 other Snow Falls and basically change the reader’s expectations of what long-form digital content and journalism are in the new century.

So if you want to fight BuzzFeed and HuffPo, there you go, Jill!

The new offerings will include digital subscriptions that cover niche topics like food and travel for a lower price than the standard subscription. The company is also planning to expand its conference business, develop games and bolster its crossword franchise.

On the call, analysts pressed for details about the new low-priced subscriptions and asked if they would cannibalize the company’s existing digital offerings — which are regarded as essential to the Times‘ future but whose growth has stalled. Times VP Denise Warren said the company had “identified many people interested in a lower price point” but that cannibalization was not an issue because these people “come in at a differeent part on the demand curve.”

CEO Mark Thompson did not provide any price details, but suggested the company could be in a position to charge more to devoted digital subscribers who enjoy getting full-access entirety of the Times’ content. He added that the new niche products could bring in revenue this year but that it “will take till late 2014″ for the new initiatives to result in an operating profit.

For the near future, the Times continues to face serious financial headwinds. The company has recently relied on major increases in its print subscriptions to increase revenue, but may be unable to do so much more. Meanwhile, advertising remains bleak (digital dropped 4 percent last quarter) with executives on the call offering only tepid explanations — like a weak Oscar race — when analysts questioned the Times’ ad sales strategy. The strategy may get an overhaul as when the company fills a new position to head up its ad sales.

An analyst, citing the Times’ large cash reserves, asked if the company had an intention to go private. Thompson, who has just completed his first full quarter as CEO, said no. Executives also said the company would continue to suspend its dividend which provides income to the families that own the Times.

Among those questions are the following: Are people going to pay directly for content? Is native advertising going to subsidize media? Does sponsored content raise ethical issues for media companies? Are individual creators going to succeed by connecting directly with their audiences or by striking deals with existing media entities? And as far as I can tell, the answer to all of these questions is the same: Yes. And no. That may not seem very helpful, but I think it is.

You have to try everything

At one point during the panel on monetization — which also included Richard Tofel from ProPublica, Raju Narisetti from News Corp. and Bob Bowman from Major League Baseball — Atlantic Media president Justin Smith said that his organization didn’t really have a single answer to the question of how to monetize content, because it was more or less trying everything it possibly could (which is one of the reasons why I have said Atlantic is one of the media companies worth watching).

(L to R:) Richard Tofel, President, ProPublica; Justin Smith, President, Atlantic; Raju Narisetti,SVP and Deputy Head of Strategy, News Corp; Bob Bowman President and CEO, MLB Advanced Media paidContent Live 2013 Albert Chau / itsmebert.com

For the Atlantic, that means experimenting with sponsored content (despite its potential pitfalls, which were highlighted during the Scientology incident) as well as doing live events, and introducing a premium offering — which Smith wouldn’t provide much detail about but is supposedly coming soon. As he put it:

“To say that the ad model is going to win over the pay model is foolish. I think the solution will be multiple revenue streams, it will be how experimental, how creative you are in seeking out those revenue streams… we must try everything. And we must not believe that one thing is going to work over the other until we actually experience it and see it over a period of time.”

The future isn’t going to be one model

Even just on that panel, we had almost every model represented, with ProPublica — which is built on a donation model, one that Dick Tofel believes will be replicated in dozens of states and cities, in the same way most metropolitan areas have symphonies or ballet troupes — and the Atlantic, and then News Corp. with its variety of hard and soft paywalls, and MLB with its app-based and content-focused strategy. Bowman said everyone should have some form of pay model, because why not give your hardcore fans a way to pay you for what they value?

(L to R:) Andrew Sullivan, Editor, The Dish; Andrew Ross Sorkin, Columnist, NYT; Maria Popova, Writer, Brain Pickings; Tim Ferriss, Author, The 4-Hour Workweek paidContent Live 2013 Albert Chau / itsmebert.com

The “blogging superstar” panel also had a variety of models, none of which was obviously better than the other. Maria Popova of Brain Pickings said that she didn’t even think of herself as a business — she wrote “for an audience of one” and was happy to get whatever donations she could get. Andrew Sullivan has famously bet his future on a direct-to-reader model, but he also said he isn’t opposed to advertising either (although he is adamantly opposed to native advertising). And Andrew Ross Sorkin says he is happy to continue building a personal empire of sorts within the New York Times.

Maybe that in itself is enough of a valuable insight, at least for now: that the future of media isn’t going to be one thing, or even a couple of obvious things — there is no one-size-fits-all solution (if there ever was) and waiting around for one to appear is a mug’s game. At least for the foreseeable future, the landscape of digital media is going to be a form of loosely organized chaos, with everyone trying whatever they can. As Clay Shirky said about newspapers two years ago, this chaotic environment is actually beneficial, because we need to try everything in order to figure out what works.

Note: You can find streaming videos of each of the major sessions at paidContent Live in this post, and links to transcripts of those sessions in this post, as well as a roundup of our live-blogging of the event.

Post and thumbnail photos courtesy of Flickr / Mark Strozier and Albert Chau

Click to enlarge

Several hundred newspapers now have paywalls of some kind, but for the most part, it’s the small and mid-size papers that have been the early adopters. Last year, for example, Gannett put all 80 of its community newspapers’ websites behind metered paywalls, while keeping its flagship paper, USA Today, free online.

But the New York Times‘ ability to attract subscribers in the two years since its paywall went live – combined with the increasingly tough digital advertising market – seems to have caused some of the bigger newspapers to reconsider. In the last year alone, six of the biggest newspapers in the U.S. have announced plans to start charging for their digital editions: the LA Times, Washington Post, Chicago Tribune, Houston Chronicle, Philadelphia Inquirer, Orange County Register.

As of now, 12 of the top-20 U.S. newspapers (by weekday circulation) have either enacted a paid scheme or plan to do so.

Click the graphic to the left to see which of the biggest newspapers have paywalls.

The latest casualty is NYClean, a bookmarklet that lets readers zap away “over the limit” messages that appears in front of Times stories. I discovered the change on Monday when, after having reached my monthly quota of 10 free stories, I tried and failed to use NYClean to read another story. The tool (see the arrow) zapped the message for a second but then the message came right back:

This is the second time in as many months that the Times has shut down a trick to evade its meter; in February, readers discovered they could no longer access a blocked story by chopping off the end of the article’s website address. Times spokeswoman Eileen Murphy explained the situation this way:

“As we have said from the time we launched our digital subscription model, we are aware of various loopholes to access our content beyond the allotted number of articles each month. It remains a priority for us to protect the value of our content so we will continue to make adjustments to optimize the gateway through technical security solutions.”

The new restrictions come at a time of increased acceptance of metered paywalls. In recent months, popular blogger (and paidContent Live guest) Andrew Sullivan introduced a meter — now at $1.99 a month — while longtime paywall holdout the Washington Post said it will launch one this summer.

The Times’ get-tough measures create dilemmas for readers like me who are running out of workarounds. I like the New York Times but, since I already pay hundreds of dollars a year for a Wall Street Journal subscription, I am not in a position to shell out full fare for a second paper. Perhaps the Times will introduce a grazing option (say 50 articles for $5) or introduce paywall partnerships across publications.

I tried to help answer that question in my post from last year: Amplification and the changing role of media. The gist of that post was that “as more sources of news start to go direct by posting their thoughts to their blogs, Twitter and Facebook pages, a journalist’s role becomes more about deciding what to amplify and what to ignore.”

…the rise of the social web, that has changed. Blogs, Tumblr, Twitter, Facebook, Instagram and other such platforms have made it easy for news makers to go direct to their constituents. So what is the role of today’s media person? In addition to reporting news, I think picking things to amplify is also important. Back in the day, news people made a choice by deciding which stories to write. Today, we have to adopt a similar rigor about what we choose to share and amplify. In sharing (on Twitter or even re-blogging) we are sending the same message as doing an original news report.

The big media outlets still have one thing that they can leverage: attention. By leveraging that attention and highlighting things worth highlighting, they can continue to bring the news to their constituents and at the same time add veracity to it — and thereby add the kind of value that makes them worth keeping around.

Late on Friday afternoon, a spokesperson for the Wall Street Journal  announced on Twitter that free access will begin at midnight:

PSA: We'll be dropping our paywall beginning tonight at midnight through Sunday due to the winter storm. #blizzard #Nemo—
Sara Blask (@sarablask) February 08, 2013

The New York Times will do the same. In response to an email, spokesperson Eileen Murphy wrote, “We’re dropping the pay gate tonight at 6 and will re-evaluate tomorrow evening.”

The practice of lifting paywalls, which typically restrict the number of articles a vistior can read, is becoming commonplace during major public events or during critical needs for information. The New York papers did this during Hurricane Sandy and the election. As paywalls spread at newspapers across the country, it’s likely most papers will do the same.

(Image by Trudy Wilkerson via Shutterstock)

Slate’s latest incarnation is as a data-driven social-media beast.  The site thinks it can use viral wizardry to spray smart writing around the internet and, at the same time, finally earn a profit from being perspicuous. The money question has become pressing because Slate, despite its years as a high-brow conversation starter, has yet to show it can survive without the largesse of a corporate mothership.

So will Slate’s third act pan out? Here’s a look at how its brain trust is approaching data, technology and the evolving ethics of advertising.

Top drawer or traffic whore? Stats and story selection

On a cold January afternoon, I met editor-in-chief of the Slate Group, Jacob Weisberg, and Slate editor David Plotz in the former’s airy corner office on Morton Street in New York’s West Village. The office has large windows and shelves of hardcovers, including Weisberg’s exposition “The Bush Tragedy.”

The men were busy. Weisberg was en route to Davos, while Plotz had ducked out from answering questions on the online discussion forum Reddit. But both wanted to make the case that Slate has what it takes to survive in the age of analytics. “We rely on data, not intuition” said Weisberg. “The big cultural change at Slate is that it’s moved from being a site driven by instinct to a site driven by evidence.”

The remark comes as a rebuttal to earlier observations that Slate relied on creaky technology even as its competitors shot by it with state-of-the-art tools. The New York Observer in 2010, for instance, talked to members of Slate’s staff and concluded that the site’s tech was “Chitty Chitty Bang Bang.”

Weisberg says those days are done and that technology is at the center of the editorial operation. He points to a new Silicon Valley-style product team and a doubling in the amount of “sideways” readers from social media in the last year as proof that Slate has gotten religion on the analytics front.

Weisberg says Nick Denton of Gawker and Jonah Peretti of BuzzFeed have been inspirations in the push for better analytics. The two viral media evangelists have shaken up publishing by using social media metrics to judge what stories to promote. (Peretti will be speaking at paidContent Live in April.)

But if Slate turns to audience activity to inform its story choice, does this also mean pandering? “We have written traffic-whorey stories here and there,” admits Plotz. But these efforts haven’t been particularly successful, he says. Instead, he credits editorial initiatives like “Bad Astronomy” (a feature for science nerds) with drawing new regular readers to Slate.

In this regard, Slate is like other high-minded publications navigating a tough, even contradictory mission. On one hand, they promise smart and independent ideas; on the other, they’re heeding social media metrics that could tug them to the lowest common denominator. While news sites like BuzzFeed cut their teeth on silly cat photos only to climb up the intellectual and media food chain, it’s unclear whether this process can work in the opposite direction.

So far, Slate appears to be threading the needle by growing its readership, while also publishing thought-provoking pieces (like this one about Palestinian versus Israeli textbooks). Slate says December 2012 unique visitors increased 33% percent from a year ago; meanwhile, comScore stats show Slate is faring well against other ideas publications. Here’s a chart that shows how they compare (note QZ and theAtlanticWire are part of the theAtlantic.com) :

Paywalls and pettifogging

The buoyant numbers are good news, of course, but do they mean Slate is finally in a position to make money? In 2010, Plotz admitted that Slate was not profitable. Like nearly every other digital publication, Slate had discovered the hard way that great writing and a loyal readership are not the same as a business plan.

Since then, many publishers have followed the lead of the New York Times and begun to charge for access to all or portions of their digital content. These so-called paywalls have gained acceptance after being a contentious issue for years — in part because an early effort by Slate to implement one in 1998 didn’t work out.

Slate recently floated the idea of a future “membership” scheme for some readers, but Weisberg is adamant it won’t involve charging for content. The topic is sensitive enough to have produced a bizarre Twitter spectacle in which Weisberg’s Mr. Fox avatar berated a respected Forbes reporter as a “pettifogger” (and worse):

@jeffbercovici Jeff, that story doesn't say that! It calls membership a "model," not a "pay model." Quit pettifogging.—
Jacob Weisberg (@jacobwe) December 14, 2012

So what exactly does the membership involve? Weisberg didn’t elaborate beyond saying it won’t be unveiled until at least the end of the year and that it will be “more akin to a public radio-type membership model — you give a contribution and in return you get benefits.”

As Slate hashes out these details behind the scenes, it’s also trying to cultivate another revenue stream, in the form of an expanded events business. These include loose mixers that let readers mingle with Slate writers; Weisberg says more than 700 people recently bought tickets for one of its “gab-fests” in Washington. Slate is also hosting small, more formal events hosted by advertisers. One example is a UBS-hosted panel at which Weisberg hosted a discussion on exports with political poohbahs.

Other media outlets have run into ethical challenges with custom events like this — most notably the Washington Post, which in 2009 proposed hosting private “salon events” at the publisher’s house for powerbrokers and journalists. It sparked a newsroom revolt, and the paper ditched the idea before it ever became a reality. Weisberg says Slate, which is independent but shares a corporate parent with the Washington Post, won’t run into similar problems because its events are all public and on the record.

All this still doesn’t answer the question of whether Slate is now profitable. Asked directly, Weisberg said he can’t say because of Sarbanes-Oxley disclosure rules that require companies like the Washington Post Co. to disclose material information through broad public channels.

Ads, yes – but not for the Church of Scientology

Digital publications these days need multiple revenue streams to survive, but their core remains advertising. And here Slate, which has recently built up its own sales force outside of the Post, and others face the same dilemma: an increasing amount of web traffic comes in through mobile devices (about 30% now, and 50% by 2014 is probably a safe bet) but ad rates are low and no one is sure what to do about that.

“I don’t think we’ve figured out anything other people haven’t,” says Weisberg. “You have a rapidly expanding audience but CPM’s that are much lower. The key is distinguishing how and when people are using different types of mobile devices.  Between tablet and mobile, those two will diverge rapidly over time. Tablet ads will become more valuable while handsets gravitate to a performance model.”

While publishers wait for the right mobile ad models to emerge, many are seizing on so-called “native advertising” as the secret to juicing ad prices. It’s debatable whether it’s really new but the basic idea is to produce ads that mimic the editorial content around it – ads that resemble nearby stories, tweets, pictures, etc. It may or not be novel, but for now it is clear that native advertising can go horribly wrong such as when the Atlantic printed a “story” about the Church of Scientology replete with gushing “reader” comments about the cult’s virtues.

Weisberg says the Atlantic tripped up by violating three principles: printing ad that confuse readers; tampering with the editorial process; and accepting an ad from someone the publication shouldn’t have done dealt with in the first place. “They are enemies of free speech, they are persecutors of journalists, they’re litigious. They’re a crazy cult who’s made life hell for journalists who’ve tried to do their job. Why do business with them at all?”

In terms of Slate’s own advertising, the publication says revenue in 2012 grew 26 percent from the previous year. Its advertisers include , most recently, Coke, Lexus and Samsung. As for the ad opportunities offered by aggregation tools like Flipboard, Weisberg is skeptical and says they are “too passive” and less useful now that “Twitter has cracked the news personalization process.”

Slate has also built a strong lineup of videos and podcasts that Weisberg says are lucrative for the site. Slate is now producing nine separate podcasts, some of which rate highly on iTunes; one episode of the show Lexicon Valley recently notched up 650,000 downloads. Slate would not disclose how much ads, which are read by show hosts, bring in but said “advertisers pay some of the highest rates in the industry” for the podcasts.

This podcast and other non-print revenue will help determine whether Slate can join an increasingly data-driven media world while still remaining an influential liberal publication. While the verdict is still out, Slate’s confidence remains high.

“We have the brain of the New York Times and the body of BuzzFeed,” said Weisberg as he prepared to dash off to Switzerland – where he would later tweet, “Wish Pussy Riot was in Davos instead of so many Russian oligarchs & kleptocrats.”

(Images by Slate and Kletr via Shutterstock)