Last month, Bloomberg published an article, The New York Times Paywall Is Working Better Than Anyone Had Guessed, in which Bloomberg’s Edmund Lee observed:

…it’s clear the New York Times’ pay wall is not only valuable, it’s helped turn the paper’s subscription dollars, which once might have been considered the equivalent of a generous tithing, into a significant revenue-generating business. As of this year, the company is expected to make more money from subscriptions than from advertising – the first time that’s happened.

Digital subscription revenue, which one analyst pegged at $91m, now appears to be a double-digit percentage of the Times’ total subscription revenue, which stands at some $768m. More importantly, according to Lee, “subscription sales are rising faster than ad dollars are falling”.

That’s good news for the New York Times, which faced hefty skepticism when it resuscitated its pay wall in 2011, but it’s also good news for the consumer portion of the paid content market as well.

The even better news: the New York Times isn’t the only player that seems to be having some success in getting consumers to open up their wallets for content. This week, blogger Andrew Sullivan left the Daily Beast to launch his own digital publication, The Dish.

Within a day, he had sold more than 12,000 subscriptions, generating $300,000 in revenue.

Although Sullivan himself noted that the amount of revenue generated thus far isn’t enough to guarantee the success of his new business, the early results are encouraging, especially given that Sullivan is adamantly opposed to advertising, which he believes is “subtly corrupting.”

Giving up too soon?

Sullivan’s desire to shun ads entirely may be an extreme case, but many publishers will face their own dilemmas over advertising. Although paid content doesn’t necessarily have to be ad-free content, figuring out the right revenue mix and designing a paid content service that can deliver it can be difficult.

And it may become more difficult as advertisers funnel more and more dollars into native ads — ads which are often sold at a premium, making them an attractive proposition for publishers.

While The New York Times has demonstrated that a pay wall doesn’t have to be a significant barrier to traffic, publishers looking to capitalize on the native advertising opportunity will obviously need to consider the effect of paid content on traffic.

Which raises an interesting question: as more and more publishers figure out how to convince consumers to part with their money, will they intentionally give up on advertising just as advertisers begin pouring larger sums of money into new and more lucrative ad formats?