– 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.”

One early sign of this shift was the 2010 launch of paywalls for the London Times and Sunday Times. These involved no new strategy; however, the newspaper world was finally willing to regard them as real test of whether general-interest papers could induce a critical mass of readers to pay. (Nope.)

Then, in March, the New York Times introduced a charge for readers who crossed a certain threshold of article views (a pattern copied from the financial press, and especially the Financial Times.) Finally, and most recently, were a pair of announcements last month: The Chicago Sun-Times was adopting a new threshold charge, and the Minneapolis Star-Tribune said that their existing one was working well. Taken together, these events are a blow to the idea that online news can be treated as a simple product for sale, as the physical newspaper was.

For some time now, newspaper people have been insisting, sometimes angrily, that we readers will soon have to pay for content (an assertion that had already appeared, in just that form, by 1996.) During that same period, freely available content grew ten-thousand-fold, while buyers didn’t. In fact, as Paul Graham has pointed out, “Consumers never really were paying for content, and publishers weren’t really selling it either…Almost every form of publishing has been organized as if the medium was what they were selling, and the content was irrelevant.”

Commercial radio is ad-supported because no one could figure out a way to restrict access to radio waves; cable TV collects revenues because someone figured out a way to restrict access to co-axial cables. The logic of the internet is that everyone pays for the infrastructure, then everyone gets to use it. This is obviously incompatible with print economics, but oddly, the industry’s faith in ‘every reader a customer’ has been largely unshaken by newspapers’ own lived experience of the move to the web.

A printed paper was a bundle. A reader who wanted only sports and stock tables bought the same paper as a reader who wanted local and national politics, or recipes and horoscopes. Online, though, that bundle is torn apart, every day, by users who forward each other individual URLs, without regard to front pages or named sections or intended navigation. This unbundling leads to the odd math of web readership – if you rank readers by pages viewed in a month, the largest group by far, between a third and half of them, will visit only a single page. A smaller group will read two pages in a month, a still smaller group will read three, and so on, up to the most active reader, in a group by herself, who will read dozens of pages a day, hundreds in a month.

Against this hugely variable audience behavior, a paywall was all-or-nothing: “If you won’t give us any money, we won’t show you any ads!” Offered this all-or-nothing choice, most readers opted for ‘nothing’; the day they launched their paywall, the Times of London shrank its digital audience from a large multiple of its print circulation to a small fraction of it. This isn’t a problem with general-interest paywalls – it is the problem, widely understood before the turn of the century, and one to which there has never been a convincing answer. The easy part of treating digital news as a product is getting money from 2 percent of your audience. The hard part is losing 98 percent of your advertising base.

To understand newspapers’ 15-year attachment to paywalls, you have to understand “Everyone must pay!” not just as an economic assertion, but as a cultural one. Though the journalists all knew readership would plummet if their paper dropped imported content like Dear Abby or the funny pages, they never really had to know just how few people were reading about the City Council or the water main break. Part of the appeal of paywalls, even in the face of their economic ineffectiveness, was preserving this sense that a coupon-clipper and a news junkie were both just customers, people whose motivations the paper could serve in general, without having to understand in particular.

The article threshold has often been discussed as if it was simply a new method of getting readers to pay, to which the reply has to be “Yes, except for most of them.” Calling article thresholds a “leaky” or “porous” paywall understates the enormity of the change; the metaphor of a leak suggests a mostly intact container that lets out a minority of its contents, but a paper that shares even two pages a month frees a majority of users from any fee at all. By the time the threshold is at 20 pages (a number fast becoming customary) a paper has given up on even trying to charge between 85 percent and 95 percent of its readers, and it will only convince a minority of that minority to pay.

Newspapers have two principal sources of revenue, readers and advertisers, and they can operate at mass or niche scale for each of those groups. A metro-area daily paper is a mass product for customers (many readers buy the paper) and for advertisers (many readers see their ads.) Newsletters and small-circulation magazines, by contrast, serve niche readers, and therefore niche advertisers – Fire Chief, Mother Earth News. (Some newsletters get by with no advertising at all, as with Cooks’ Illustrated, where part of what the user pays for is freedom from ads, or rather freedom from a publisher beholden to advertisers.)

Paywalls were an attempt to preserve the old mass+mass model after a transition to digital distribution. With so few readers willing to pay, and therefore so few readers to advertise to, paywalls instead turned newspapers into a niche+niche business. What the article threshold creates is an odd hybrid – a mass market for advertising, but a niche market for users. This is the commercial equivalent of the National Public Radio model, where sponsors reach all listeners, but direct suport only comes from donors. (Lest NPR seem like small ball, it’s worth noting that the Times ‘ has convinced something like one out of every hundred of its online readers to pay, while NPR affiliates’ success rate is something like one in twelve. Newspapers with thresholds now aspire to NPR’s persuasiveness.)

Paywalls held out the possibility, however illusory, that if all readers could be treated as customers, the organization wouldn’t have to pay much attention to them, except in aggregate. Threshold charges blow that up; a single fee-paying user will generate hundreds of times the revenue of the median, ad-viewing reader. This subjects the logic of the print bundle – a bit of everything for everybody, slathered with ads – to two new questions: What do our most committed users want? And what will turn our most frequent readers into committed users? Here are some things that won’t: More ads. More gossip. More syndicated copy. This is new territory for mainstream papers, who have always had head count rather than engagement as their principal business metric.

Celebrities behaving badly always drive page-views through the roof, but those readers will be anything but committed. Meanwhile, the people who hit the threshold and then hand over money are, almost by definition, people who regard the paper not just as an occasional source of interesting articles, but as an essential institution, one whose continued existence is vital no matter what today’s offerings are.

In discussing why the most loyal subset of readers would pay for access to the Times, Felix Salmon described some of the motivations reported by users: “I like the product, understand the incentives involved, and want its production to continue” and “I feel that maintaining a quality NYT is immensely important to the country as a whole.” Now, and presumably from now on, the readers that matter most are disproportionately likely to score high on the God Forbid index (as in “God forbid the Sun-Times not be around to keep an eye on the politicians!”)

The people who feel this way have always been a minority of the readership, a fact obscured by print bundles, but made painfully visible by paywalls. When a paper abandons the standard paywall strategy, it gives up on selling news as a simple transaction. Instead, it must also appeal to its readers’ non-financial and non-transactional motivations: loyalty, gratitude, dedication to the mission, a sense of identification with the paper, an urge to preserve it as an institution rather than a business.

Thresholds are now mostly being tried at big-city papers – New York, Chicago, Minneapolis. Most papers, however, are not the Minneapolis Star-Tribune. Most papers are the Springfield Reporter, papers with a circulation 20,000 or less, and mostly made up of content bought from the Associated Press and United Media. These papers may not do well on the God Forbid index, because they produce so little original content, and they may not find thresholds financially viable, because the most engaged hundredth of their audience will number in the dozens, not the thousands.

On the other hand, local reporting is almost the only form of content for which the local paper is the sole source, so it’s also possible to imagine a virtuous circle for at least some small papers, where a civically-minded core of citizens step in to fund the paper in return for an increase in local coverage, both of politics and community matters. (It’s hard to overstate how vital community coverage is for small-town papers, which have typically been as much village well as town crier.)

It’s too early to know what behaviors the newly core users will reward or demand from their papers. They may start asking to see fewer or less intrusive ads than non-paying readers do. They may reward papers that make their comments section more conversational (as the Times has just done.) The most dramatic change, though, is that the paying users are almost certain to be more political, and more partisan, than the median reader.

There has never been a mass market for good journalism in this country. What there used to be was a mass market for print ads, coupled with a mass market for a physical bundle of entertainment, opinion, and information; these were tied to an institutional agreement to subsidize a modicum of real journalism. In that mass market, the opinions of the politically engaged readers didn’t matter much, outnumbered as they were by people checking their horoscopes. This suited advertisers fine; they have always preferred a centrist and distanced political outlook, the better not to alienate potential customers. When the politically engaged readers are also the only paying readers, however, their opinion will come matter more, and in ways that will sometimes contradict the advertisers’ desires for anodyne coverage.

It will take time for the economic weight of those users to affect the organizational form of the paper, but slowly slowly, form follows funding. For the moment at least, the most promising experiment in user support means forgoing mass in favor of passion; this may be the year where we see how papers figure out how to reward the people most committed to their long-term survival.

Clay Shirky is a writer, consultant and teacher on the social and economic effects of internet technologies. He has a joint appointment at New York University (NYU) as a Distinguished Writer in Residence at the Arthur L. Carter Journalism Institute and Assistant Arts Professor in the New Media focused graduate Interactive Telecommunications Program (ITP). His courses address the interrelated effects of the topology of social networks and technological networks, how our networks shape culture and vice-versa. You can follow him on Twitter @cshirky and on his blog.

This article originally appeared in Shirky.com.

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The fuss began in 2009 when the Courant, owned by bankrupt Tribune Co., appointed an “aggregation editor” to compensate for cuts to its local news desk. For several months, the Hartford paper took to siphoning stories from smaller competitors, including “North-Central Connecticut’s Hometown Newspaper,” the Journal Inquirer. The paper sued, saying its bigger rival had taken its stories about local water and education issues and “reproduced them in substance” on the Courant website, sometimes without attribution.

In its claim, the Journal Inquirer accused the Courant of not only copyright infringement but of stealing its news. This type of “hot news” claim was first recognized in 1918 when the Supreme Court found that the Associated Press could stop the International News Service from rewriting its accounts of World War I. The latter’s practice of wiring rewritten AP reports to the west coast sometimes resulted in the INS beating the AP to press on its own stories.

The hot news doctrine shrunk dramatically in the twentieth century but suddenly took on new importance last year after a New York court ruled that Barclays bank was entitled to stop a financial site, Flyonthewall.com, from reporting on the recommendations it sold to its clients. Numerous news organizations led by the AP filed court briefs to support the bank during appeal proceedings. The bank and the news outlets ultimately lost, however, after the Second Circuit Court of Appeals overturned the ruling and set out a difficult five-part test that a company must pass to establish a property right in “hot news.”

The Hartford Courant aggregation case provided a new opportunity to test the boundaries of the “hot news” rules. The paper had argued that the Journal Inquirer’s stories did not qualify as hot news and that its aggregations amounted to “fair use” under copyright law. Those arguments will not be tested, however, because of the settlement, the term of which were not disclosed.

The episode attracted national attention in journalism circles and also resulted in the Courant publisher writing a letter of apology to the paper’s readers. The Journal Inquirer has a detailed account of the events and the settlement here.

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The new mobile initiative, dubbed “iCircular,” will start rolling out on Monday within the mobile sites and apps of the 40 newspapers.

The iCircular feature will be found within newspaper mobile apps on the iPhone. The feature will be available on other formats, such as Google’s Android, later on. It’s HTM5-based, so that will also be available on newspapers’ web and mobile wap sites and ultimately ease iCircular’s transfer to other operating systems. The app will be situated within a special “Deals” section on each of the newspapers’ apps and mobile sites.

“It’s essentially an app within an app,” said Mary Junck, chairman of AP’s board of directors’ revenue committee and CEO of Lee Enterprises (NYSE: LEE). “We didn’t want to create an app separate from the newspapers. We wanted something that would be as integrated into the newspapers as a Sunday circular is in the print editions.”

Interestingly, the program is open to all newspapers, not just AP members, Junck told paidContent in an interview. “This is meant to address a problem and promote an opportunity for all newspapers,” she added.

Launch partners include the New York Daily News, The Philadelphia Inquirer, the New York Times (NYSE: NYT) Company’s Boston Globe, Hearst’s San Francisco Chronicle, Cox Media’s Atlanta Journal-Constitution, AH Belo’s The Dallas Morning NewsTribune Company’s Los Angeles Times and Chicago Tribune, and other representatives of nearly every major newspaper company. (The whole list of iCircular newspaper launch partners.)

The idea offers newspapers a chance to make sure they don’t lose the last important revenue stream aside from circulation dollars. For instance, the notion that Craigslist has killed newspaper classified revenues tends to have been overblown, but not by much. Clearly, newspapers were always in a position to head off the disintermediation wrought by Craigslist and other online listings sites.

These days, the rise of daily deals sites threatens to take away that last vestige of healthy advertising revenue, which is already facing some declines due to falling newspaper circulation. In its recent tally of ad spending in the first half of 2011, Kantar Media said that “free-standing inserts” fell by 6.4 percent.

The AP estimates that at launch iCircular will reach 5 million users, allowing newspapers to quickly broaden the 80 million newspaper readers who get pre-print circulars already.

But will it work?

“We’re not sure what we’re going to find from this test, but we’re going to be looking closely at several things in particular,” Junck said. “We’re going to be interested in seeing the audience numbers for iCircular and how often the deals are used. The newspaper partners have all agreed to do heavy promotion for this.”

In an interview with paidContent, Jeffrey Litvack, the AP’s GM’s/global product development, suggested that iCircular’s success may be rooted in what has propelled the daily deals space so far. “Most people find ads annoying, but circulars are ads that consumers seek out — it’s the ultimate opt-in,” he said.

About 20 national retailers are part of the launch, including jcpenney, Kohl’s Department Stores, Kmart , Macy’s, Staples, Target, Toys “R” Us, Walgreens and Walmart. Regional and local stores, such supermarkets and electronics stores are also participating.

“For retailers, they’re encouraged to sign on since they’ll be able to attract customers to local stores by automatically delivering geo-located deals and special offers nearest to the consumer,” Litvack added. “For smartphone users, iCirculars improves on the print coupon by letting them create shopping lists, as well as connect to social media and store loyalty card information. It’s simply more of what people already like and use.”

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Those aren’t the economics of online, where advertisers pay only for the readers who see (or click on) their ads, and where abundance robs publishers of pricing power over their once-scarce inventory.

My favorite illustration of this is the Star Ledger killing its stock tables in 2001, shaving $1 million of costs and losting only 12 subscribers.That means that prior to this, the paper was spending $83,000 per reader to hold onto them. Papers had been scared of losing one reader because, in their economics, every reader was equally valuable. But no longer. I keep urging papers to calculate the net future value of readers and decide who’s worth keeping and serving and who’s not, economically speaking.

The Tribune is losing much money on every one of those Groupon readers – not only the lost retail value of every discounted sale but also the fact that the paper no doubt was already published at a lost – that is, it costs more to produce a copy than its sold for because each reader is valuable to advertisers. But is she?

What the Tribune is also trying to do here is hold onto its critical mass. When its Sunday circulation falls below a certain level, certain lucrative advertisers – coupon and circular advertisers – will stop using papers as their means of distribution. That will be a kick in the kidneys almost equal to the creation of craigslist and it’s coming any day. In fact, it’s already starting … that, surely, is why the Tribune is so desperately trying to hold onto every reader.

But those economics will quickly disintegrate. Watch it happen….

Jeff Jarvis is author of What Would Google (NSDQ: GOOG) Do? and blogs about media and news at BuzzMachine.com. He is associate professor and director of the interactive journalism program and the new business models for news project at the City University of New York’s Graduate School of Journalism. He is consulting editor and a partner at Daylife, a news startup. He writes a new media column for The Guardian and is host of its Media Talk USA podcast.

This article originally appeared in BuzzMachine.

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