LAST year the Guardian newspaper was riding high, having triumphantly exposed phone-hacking at the News of the World. But good journalism is not the same as a good journalism business. On September 15th the Guardian Media Group closed a voluntary redundancy scheme, which had failed to attract the 100 takers the company had hoped for. A nasty fight with its union could follow.

That is an uncomfortable prospect for a left-leaning outfit, but these are uncomfortable times. Last month the firm reported an annual loss of around £76m ($121m). Its newspaper unit lost £54m. Andrew Miller, Guardian Media Group’s boss, wants to cut £25m in costs by March 2016, and has sold businesses, such as the radio division.

In one respect the Guardian is better off than most. It is backed by the Scott Trust, which is designed to ensure it survives “in perpetuity”. The Guardian Media Group probably has around £250m in cash and an investment fund, as well as stakes in companies, notably the publisher of Auto Trader, which it could liquidate for at least £500m. The newspaper could survive for more than a decade even if its losses continue at the current rate. But not in perpetuity.

Most British newspapers are suffering from falling circulation and weak advertising. “Everyone has the same dilemma. It’s just that we’re utterly transparent about it,” says Mr Miller. But the Guardian has some unique challenges. Its readers are younger than those of, say, the Daily Telegraph or the Times, and thus more willing to ditch print newspapers for digital news, says Claire Enders, an analyst. And it has bet heavily on the stumbling horse of digital advertising.

The Guardian is now the third most popular newspaper website in the world, after the Daily Mail and the New York Times. Yet digital advertising is not bringing in nearly enough money to offset print losses. The Guardian’s digital revenues were £46m last year, but advertising accounted for less than £17m of that, with the rest coming from things like online dating and sales of iPad apps. Overall display-advertising rates have fallen as supply has increased. National news sites now fetch only around £7-9 for 1,000 impressions, down from £12-15 before the financial crisis, according to one estimate.

A growing group, both outside the Guardian and within it, now believes the paper should start charging online. It is increasingly alone in not doing so: the paper’s main liberal rival, the New York Times, introduced a metered pay wall in March 2011. As of June the New York Times Company had 532,000 paying digital subscribers across its publications. Barclays, a bank, calculates that this should be more than enough to offset a decline in print advertising.

Mr Miller says his company will continue to “monitor pay walls” and that it is not “anti pay wall”. But a change would be culturally wrenching. The Guardian’s editor, Alan Rusbridger, has been a flag-bearer for “open journalism”, which invites input from readers. Erecting a pay wall, and thereby curbing access to content, is at odds with the paper’s liberal values, as it has defined them in the digital age.

Worryingly, there seems to be little urgency to figure out a model that can pay. Mr Miller says it is still “early days”. The company is ploughing more resources into digital while cutting costs and persisting with free online content. This looks less and less like a long-term business strategy. The day is getting late.