Zivity got its capital back in 2007, unsurprisingly considering its founders, married couple Scott and Cyan Bannister, have some entrepreneurial pedigree. Scott used to be a PayPal director and co-founded IronPort, an email security company sold to Cisco for $830m last year, and where he met Cyan. They deliberately avoided funding “from traditional adult media sources” in order to maintain a degree of autonomy and uniqueness to Zivity; their non-hardcore stance made them more palatable to investors who wouldn’t usually want to get involved with this sort of thing. The founders and the site’s top models became “big hits on the high-tech party circuit” according to the LA Times, presumably because they were the only naked girls that particular party circuit had experienced in the flesh before.

But the site ran into trouble, both upsetting some of the female tech community and finding its numbers unable to sustain its staff base, forcing them to cut eight employees earlier this year. And now there’s this latest news. The site absolutely isn’t dying out though, just “going to grow organically, at its own pace”. One wonders how many exhibitionists there are with an SLR camera, a broadband connection, Photoshop, and a bedroom with weird red drapes – there might only be so far this site can grow. But Cyan Bannister, who is now CEO of Zivity, is saying she knows all that, and that’s fine. “Zivity is going to be a sustainable business”, she told VentureBeat, saying that her 20,000 active users weren’t “fantabulous” numbers, but that by splitting off the VC means that investors won’t be demanding unrealistic returns or ”pressure to scale” up the company too fast.

She’s from the FT school of business – deploy a subscription model, and while investors might get anxious at your lower hit count, you’ll be nevertheless raking in a stable source of revenue. It could have been easy for Zivity to panic, start running adverts to placate investors demanding big returns, but poisoning its customer base, which would have inevitably dwindled. This is a site that knows its niche, and is well placed to fully monetise it. As the Web 2.0 bubble wobbles on, we’re likely to see a lot more of this sort of thing, particularly spurred by the recession: downgraded expectations, leading to more stable business plans. And in Zivity’s case, fully engaged and happy customers. Can we learn to just not have it all?

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.

Roberto Civita’s frank summing up – “we have to end up charging for content” – echoed the voice in everyone’s head that people have been up until now trying to smother with a combination of faith in advertising, belief that free content translates into physical sales, and letting their internal monologue play “LA LA LA” at full volume. But now online advertising is clearly not sustainable, it’s time for charging online.

Rob Grimshaw, managing director of FT.com (pictured below), said their paid model, with 20 free articles a month for registered users and subscription thereafter, “is working great for us”, with their 109,000 subscribers generating “millions and millions” of pounds. I caught up with him after his panel, and put it to him that while this was true, the FT was in a unique position given its content and affluent subscriber base.

“We have some natural advantages for sure, I think the brand and the content is universally acknowledged to be quality, so that helps us a lot, but I don’t think there’s anything to say that such models can’t work elsewhere”, he said. “I suspect that one of the biggest factors will be other publishers, particularly in the consumer space, will have to think a lot harder about, is making subscription or content payment very quick and easy. Here I’m really thinking about iTunes-style, Amazon-style quick and easy, and it’s not easy to do that, to get that one touch, instant payment – so easy almost that you don’t even think you’re paying. That takes a lot of hard work on the back end, and technology investment to do it.”

He suggested than rather than it being toughest for consumer titles to monetise online, it was going to be worse for traditional news sources. “You don’t need 100 versions of one newswire story, and what publishers have done is taken a model that works in the print world, taken it online, and it just doesn’t stack up. We’re just going to need less outlets, there has to be some sort of big consolidation for that part of the market to start working properly.

“I think a lot of publishers are going to have to go through the painful process of persuading people to pay for something that was previously free, and that is not going to be something that’s a great deal of fun. But most magazines occupy fairly defined niches, and often they’re the only magazine in that niche. Well, what are you waiting for guys? The consumers doesn’t have anywhere else to go!

“There will be some sites that make it work just with advertising and there will be some sectors where it’s so competitive that that’s the only way to approach it. But for most consumer magazine markets, they’re fairly niche, they’re fairly concentrated. They can make it work, they’ve just got to take the plunge. But they’ll have to get used to the idea than rather than having 3 million unique users, they’re going to have 40,000 subscribers. But they’ll probably be making more money.”

He mooted “some kind of payment platform that the industry would use so people can buy individual articles or access to content over a period, but takes care of the back end of the billing, the issues involved in doing micropayments.” When I spoke to Christie Hefner, former head of Playboy, she expressed support for Steve Brill’s plan to build exactly that. “I’m not as pessimistic as some may about what Steve Brill is attempting, that if we could make the payment process simpler, and micropayments really easy, the possibility is that more content providers would become a part of that consortium. And consumers would get used to the idea that after a certain level of content, they would have to pay.”

But others aren’t so sure. James Spanfeller, president and CEO of Forbes, said of charging for online content: “I don’t know if we’re going to get that pony back in the barn”. This is the worry that as consumers have had free content for so long, it’s going to be difficult to start bringing in payment. Continuing the doom-laden equine metaphors was Stevie Spring, CEO of Future Publishing, who I chatted to at the Saatchi Gallery afterparty over a steady stream of pineapple canapes. “Frankly it feels like the horse has bolted”, she said. 

“The UK is a buyers market, because when you start with quality premium content delivered from major sources with no profit criteria, like the BBC, like the Scott Trust, it makes it incredibly difficult for any content provider to charge for content.” This is something that, in a case of the pot calling the kettle black, Carolyn McCall of the Guardian had noted earlier: “If you have the BBC, it is very difficult to charge for content”. (She also hinted that Media Guardian would start charging, much to the surprise of Media Guardian writer Stephen Brook, who told the final panel that he had no idea about any such plans).

So will people always choose the free options? “As long as there’s a choice, and as long as there’s a belief that that content is substituteable”, Stevie says. “It’s all very well saying I have a food magazine and my recipes are trusted – you cannot tell me that you’re going to go to bbc.co.uk and you don’t trust the BBC’s recipes, or you go to Top Gear and don’t trust that. There is an absolute trust there.

“You have to be able to offer something that is literally not available anywhere else. When most people are talking about charging online, they’re invariably talking about business to business, the ‘must have on my desk’ information. There’s really very little consumer information that would fall into that category.”

For every steadfast print evangelist at the conference, like Conde’s Jonathan Newhouse or BBC Worldwide’s John Smith, there was another voice of reason like Maurice Levy: “Who can expect the youth to ditch their iPods and move back to print?” There were constant reiterations of Stevie’s assertion that online content must be unique, high quality and high value, and as Rob Grimshaw says: “You don’t just have to offer content online, you can offer tools, services, things which will enhance the user’s experience on the web, and when you’re adding those on the site you can try charging for those rather than the content.” It was slightly depressing that the only person to look at e-commerce at any length was Matt Brittin, UK MD of Google, who amid his hawking of Google products suggested that Amazon-like recommendation engines are a no-brainer for publishers to set up on their sites. This is the kind of thing that needs to be done – it’s time for the big consumer titles to stop mucking around with Twitter, and start thinking of ways to properly monetise their online space.

Managing director Greg Miall said that forecasts like the ones recently are underestimating the true dearth of ad spending. “The market has come down a lot more than the official WPP and Aegis-type estimates”, he said. “Faced with financial armageddon, we simply cannot sustain our current operations as an independent company”.

Magazines seem to be getting especially shafted amid the recession. The Publisher’s Information Bureau announced on Tuesday that the number of magazine advertising pages in the US fell by 26% in the first quarter of this year. Check out their list of publications and their rises or most likely falls in revenue – big titles that are getting hit hard include In Touch (revenue down nearly 50%), New York Magazine (ad pages down nearly 40%), Teen Vogue (ad pages down 41%), Wired (revenue down over 50%, ad pages down a massive 57%.) That said, in their report there were 28 titles that had an increase in the number of advertisements, but in a moment of painful bathos, the title that had the biggest revenue gain year-on-year, Hallmark, has folded recently.

One answer is, as the New York Times suggests, to increase subscription prices, which in America are at crazy prices – you can get Newsweek for 47 cents an issue, for example, or three years of Esquire for $16 (£10.75). Some magazines like The Economist and People are finding that their customers are prepared to pay more than this for a subscription.

You could also get your sorry ad-haemorrhageing ass to the World Magazine Congress next month, a conference featuring the likes of Dylan Jones, Jane Bruton, Conde’s chairman, and the UK MD of Google, all trying to work out what the hell to do when consumers and advertisers alike haven’t got any money to spend. If the printed programme is anything to go by, the best tactic is to sledgehammer the customer with a wave of deranged paper stock: “Some of the innovative methods used in the Congress programme include a triple gate fold cover, thermochromic and ‘Scratch and Sniff’ effects…the programme features a range of tactile and visual enhancements including UV protective coatings, Dayglo florescent inks, cold foil and soft touch effects, pearlescent coatings, hexachrome printing and the use of translucent paper”. My head hurts just imagining it.