You’re dead right that anyone who thinks they can charge for their bog standard information online just because they need to is doomed. The supply of generally interesting content and very specific interesting content and the ability to sort through it and find it are such that the value of most content is zero.

But you’re dead wrong in saying that micropayments don’t work or can’t work. They are already all around us. There are plenty of circumstances in which people pay for content in small chunks if it’s provided in a format that means they are actually buying something else as well. Generally that’s time or convenience or information that has monetary or social value from which other people are excluded.

Facebook is a good example. There are two factors preventing Facebook charging subscriptions. They are a network business where there is really only room for one or two massively scaled providers. If they charged then they would cease to benefit from network effects and would be very quickly dead. Secondly competition – if they charged then along would come another service that didn’t. The low cost of setting up a social network service means that they can’t charge because a competitor will come along and offer the same service for free and take advantage of those pesky network effects.

So what has this got to do with newspapers? Well, it means that ny newspaper that wants to be a mass medium can’t charge. But a newspaper that wants to specialise and develop deep walled content on something that matters to a big enough audience can indeed charge. They just won’t have anything like the sort of revenues that newspapers currently expect to have.

The second element that this analysis and similar ones never take into account is the feedback loop. Given that online ad revenue can’t sustain any online only news operation, many of these newspapers are going to die and take their websites with them. That has a dramatic impact on the supply of certain types of content and potentially therefore in increasing the price above zero. Your assumption that there will always be an oversupply of reliable information online is an assumption I don’t share.

It is silly to say that it is not possible to charge on a platform where content has previously been free. In fact that’s the norm.

HBO makes good money on a “free” platform because their stuff is high quality and the price for alternative ways of getting that content is too high (wait for it to come to dvd or network TV vs $10 a month)

I pay a few dollars a month for an ESPN Insider subscription because I hate hitting walls inside their site and they bundle it with a magazine.

I pay 99c for a ringtone on my iphone that with a small amount of effort I could make for myself. But hey, what’s 99c vs messing around for 10 minutes with Garageband..

I pay $12 a month for satellite radio even though I can get free radio because it goes deeper than I can get on broadcast radio.

I pay $25 a month to Lynda.com so I can have training videos at my fingertips rather than have to scramble around a bunch of Knowledgebases designed in 1996.

But what you’re doing has to be exclusive and it has to make life more convenient. Anything that doesn’t meet these criteria is indeed doomed to fail as a paid medium.

In the end I feel quite positive about all this. If we get to a point where content producers find niches and alliances that create information that people value enough and ways of delivering them conveniently enough to give them value then journalism becomes harder … but possibly better. That’s good.

I think the Jeff Jarvis quote is particularly true; “Micropayments have never been shown to work except when distribution is tightly controlled (see: mobile phones and iTunes)”.

Printed Matter’s quote is also a really straight forward way of thinking about profitability in papers across the board “Your product is readership, which you sell to advertisers.” – fantastically concise + accurate.