The US newspaper business is in dire straits. Recent death rattles have included Sam Zell’s Tribune group filing for bankruptcy protection and its LA Times title whoring itself ever more shamelessly to advertisers; the Boston Globe, who is owned by the same company that own the New York Times, is scraping together its existence – its unions have just approved cost-cutting measures, like pay cuts and the scrapping of lifetime job guarantees to try and make enough savings to warrant the paper’s ongoing existence.

Now the WSJ is poised to try and fill the gaps in content created by these cost-cutting papers: “We’re going to move in on each of the big cities”, said managing editor Robert Thomson. The paper currently allows free access to certain articles, but has a subscription plan for its premium financial content as well as a fair chunk of its other stories. Now it’s looking to make that more sophisticated, and allow, for instance, a reader interested in today’s Clearnet bid to buy just that story without having to fork out for a whole subscription. They’re also going to create premium subscriptions for their truly niche, high-quality business content, in areas like “energy, commodities, wealth management”.

It comes as the New York Times Co.’s chairman Arthur Sulzberger Jr. hinted a couple of week ago that the NYT might install a micropayment model: ”We continue to take a fresh, hard and deep look at various subscription, purchase and micropayment models”. Ariana Huffington is a fan too – in an interview with German paper Die Welt, she said the following:

“The idea that you can go back to a pre-Internet world where you can create walled gardens around content, and charge for admission, is simply futile. Those who try that are going to fail. Today we live in the linked economy, not a walled-off content economy. The challenge is to find different ways to monetize links among media through advertising or micropayment or whatever, not subscription for exclusive content.”

Well, it’s going to be a bit more sophisticated than that. Micropayments make sense for the WSJ, given their specialised content for specialised readers – you can maximise the profitability of a niche through micropayment, when a businessperson finds they absolutely need its individual bits of information. But a more casual reader will find the barrier of individual payment pretty offputting – a subscription model makes more sense for them, because after one payment they can go back to the browsing style they’re used to.

Micropayment probably needs to be not at the truly micro level of individual stories, but payment for a week’s worth of, say, green tech stories. Bundling a story from elsewhere on the site for free along with the paid package could work well too, both as an incentive to purchase and a means of drawing readers to other parts of the site. The beauty of online means that there is this freedom to offer these different payment structures at once – Huffington et al should be thinking of all of the possible ways to monetise their product.

The San Francisco Chronicle

This, coming at a time when most news organisations are making huge cutbacks, and generally reeling from the massive decline in advertising sales, is a remarkable development and rare sign of encouragement for the Western news media. So are Oak Investment brilliant visionaries, mad, or a bit of both? Fred Harman of Oak, who is joining the board of the Huffington Post, told journalist Kara Swisher on her website D: All Things Digital that he felt the HuffPost was a rock solid bet, and was convinced that now was a better time to invest in news media than ever with bigger, more established rivals locked in a tailspin;

“The cycle of print media is accelerating downward and there are not as many companies with a balance sheet and focus to do it right online… The news market is really up for grabs in a lot of ways…and it is a good time for those who are viewed as authoritative… Who knows how deep this economic situation is going to be. But strong companies that keep investing through a bad cycle can emerge as winners.”

Harman drew parallels with his company’s investment in the Seattle-based aQuantive, the digital marketing company that owns ad industry giants Avenue A/Razorfish, Atlas Solutions, and DRIVE Performance Solutions, which survived the dot-com crash and was acquired by Microsoft in May 2007 for $6 billion.

Interestingly, the HuffPost has now changed it’s sub-title to “The Internet Newspaper,” a feisty claim considering that the 4.5 million unique visitors the HuffPost notched in September is just under a quarter of what other news organisations (including the Guardian, Times and New York Times) consistently pull in. Still, with the kind of money the HuffPost is attracting, and print display revenues in a terminal decline, newspapers around the world will surely be looking towards the HuffPost’s formula of syndicated blogs, aggregated content, and highly partisan politics and seeing which elements they can co-opt to further their own chances of survival.

Also worth noting is the newly minted HuffPost’s stated desire to expand it’s coverage to include business, eco-tech, citizen journalism initiatives, and also create a fund for (gasp) investigative journalism. Allied with their mooted establishment of mean, lean city bureaus, the HuffPost model may give the slash and burn merchants running UK newspapers some pause for thought.