It was once thought that paywalls would work only for business-oriented papers like the Wall Street Journal and the Financial Times, but smartly constructed paywalls, which strike the right balance in supporting both ad-subsidized consumption and subscription consumption, are now showing signs of success for mainstream papers as well. (See, for instance, Felix Salmon’s piece on the New York Times’s “porous paywall.”) And a growing number of papers and other publications are testing paywall variations, which will help the industry gain a better sense of what works and what doesn’t. Newspapers are also getting smarter about distinguishing between the more fungible and the less fungible elements of their products – and focusing their talents and investments on the former. Less fungible means more distinctive, and distinctiveness in written news can manifest itself in many forms, from news analyses, to human-interest narratives, to smartly written editorial columns, to editorial skill in creating a bundle of stories, to compelling packages of local news and event coverage. Finally, and crucially important, the huge overabundance of supply in the news market, a consequence of the collapse of geographical boundaries that traditionally separated newspapers, is slowly ebbing as journalists are laid off and newspapers go under. The pruning of supply is ugly, but, from a business standpoint, it’s both inevitable and necessary.