Exactly paywall. The thing The Atlantic doesn't want to talk about, however, is that one user paying you a dollar a month makes you as much money as a million users at 1 CPM.
Ryan Holiday (there I go again) makes a pretty convincing argument that the modern Internet era is a rerun of the age of Yellow Journalism, when sensationalism and immediate gratification sold newspapers. The end of Yellow Journalism occurred when the New York Times invented the subscription model, which allowed them to have a budget for actual news.
The newsmagazines that have survived the print-to-digital experience have largely done so by becoming giant trashy content aggregators. There was an article on Reddit moderators in the Washington Post (!) that pointed out that Reddit gets twice as many readers in a month as CNN - and while CNN has become News Lite, Reddit is the Kittens&Outrage channel.
On the flip side, I get most of my actual content from The Week, which charges me $100 a year for something I can read in the sauna (and which gives me access to their content on any mobile device i own). The best content I've seen lately comes from NSFWCorp at their new home at Pando, and they've got a paywall, too (not as tall as NSFWCorp's, but close). Meanwhile, outfits like WSJ and Janes and STRATFOR will give you a couple articles a month for free, but know that the people who rely on their content will happily shell out for a subscription.
Something I think most of these discussions miss is that before the Internet, not a whole lot of people read the New York Times. After the Internet, a gajillion people grew entitled to read the NYT whenever they felt like it, but rarely did. This meant that the NYT couldn't really charge the people who had a real reason to read the NYT regularly... but the idea that the NYT should disappear behind a paywall to provide for those core customers was so contrary to the egalitarian ideas of the information revolution that everyone mocked them.
In the end, you aren't a NYT customer. You know it and they know it. Reports like this miss the fact that the NYT will succeed if it can charge its customers, regardless of what that does to its non-customers. I think they skip it because it requires pointing out that most of us were never NYT customers and never will be.