BROOKE GLADSTONE:

In January of 2010, The New York Times was facing an existential crisis. It borrowed 250 million dollars from a Mexican media mogul, at a painfully high interest rate. It sold its shiny new headquarters and then leased it back to raise another 225 million.

And then it made the stunning announcement that it would be erecting a paywall that would cut users off after they viewed a certain number of articles each month. This flew in the face of the widely held notion that in the Internet age, information wants to be free.

In the 15 months between the paywall's announcement and its implementation this past April, doomsayers predicted doom. And The Times itself kept its expectations low, hoping for 300,000 subscribers in a year's time.

But then a funny thing happened. The New York Times paywall became a viable present and future business model for monetizing the newspaper industry.

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The Times paywall added 224,000 new subscribers in its first three months. Add to that the new Kindle subscribers, and The Times has already nearly reached its goal of 300,000 users. In fact, the much-maligned paywall could turn out to be a bracing tonic for The Times.

Seth Mnookin wrote about it in this week's New York Magazine. Seth, welcome to the show.

SETH MNOOKIN:

Thank you so much for having me.

BROOKE GLADSTONE:

The advertising online has grown some 16 percent in the first quarter of the paywall and this, despite the fact that these ads are likely to appear before fewer sets of eyeballs?

SETH MNOOKIN:

Advertisers are very interested in an audience that has shown its commitment to the product with their wallet. The idea is that brand affinity might translate to some of the advertisers.

Another thing that you're seeing along with that is the decline in print subscriptions appears to be really drastically reduced, as a result of the paywall.

That might seem counter-intuitive but if you are a print subscriber you get free digital access. So there's actually the possibility that some people who are not print subscribers might say, all right, well if I'm going to pay, I might as well actually just pay to get the actual physical hard copy of the paper and then get that digital subscription as part of that.

BROOKE GLADSTONE:

There's been a lot written about how to get around the paywall — burrow under it, fly [LAUGHS] over it. Why do you think that so many people have opted to pay upwards of 455 dollars a year for The Times, instead of just going around it?

SETH MNOOKIN:

People oftentimes don't think about the fact that they're paying 400 and some odd dollars a year because it's X amount of money per week or per month. It's the same way that I actually don't sit down and think about how much I'm paying annually to my cable company because I would probably start to weep in the corner.

While it is possible to get to things, even once you've reached the article-per-month limit, that's supposed to prompt the paywall, there's a certain point that becomes more of a hassle than it's worth.

And then I think for some percentage of people, there is a belief in what The New York Times is trying to do, and a desire to support that mission. That is overall a very small percentage, and I think that those people have overwhelmingly already signed up.

BROOKE GLADSTONE:

A lot of Internet visionaries who say information wants to be free thought that this was going against the whole ethos of the Web.

SETH MNOOKIN:

People want things for free [LAUGHS], just in general. But what we've seen with the eReaders, what we've seen with the Kindle, what we've seen with iPhone apps is that if you create a relatively frictionless environment for people to buy content, they will buy it.

What had been a big issue with early efforts to get people to pay for newspapers is that it was a big pain in the butt. There was nothing akin to you what you can do on an iPhone, which is hit a button that says Buy This and it will then magically appear.

BROOKE GLADSTONE:

Seth, you are saying this is a frictionless experience but I've been a New York Times print subscriber for years, and I can't figure out how to get it on my Android.

SETH MNOOKIN:

Right. I'm amazed that I continually need to re-enter my password and user name onto my iPhone app and the website, and in the user experience arena there clearly is some work that has to be done.

BROOKE GLADSTONE:

Seth, thank you very much.

SETH MNOOKIN:

Thank you. It's always great to talk to you.

BROOKE GLADSTONE:

Seth Mnookin's article, "The Kingdom and the Paywall" appeared in this week's New York Magazine. He's also the author of The Panic Virus and the book Hard News, about The Times' notorious reporter Jayson Blair.