Newspapers have declared free content the enemy. But who are the allies?

Journalism Online's model resembles the pay-wall structure in place at some Dow Jones publications. And that's where its vulnerabilities lie. The Journal and Barron's are must-reads for a devoted and often wealthy readership. Local papers must speak to communities with fragmented interests and the full range of income levels. There's also the matter of simple supply and demand: The real reason newspapers haven't made money with online ads isn't Google; it's the glut of Web pages hosting ads, which have multiplied faster than ad dollars. And the same may happen with subscription dollars. If most news sites charge for access—instead of the few that currently do—will there be enough money to go around?

Worst of all is the timing: The summer of 2009 is a terrible time to start charging for what was free. The Journal established its current pay-wall structure before the recession. Today, newspapers need to bargain with readers who are seeing their wages and salaries dwindle, who are saving more to rebuild nest eggs, and who are seeing the cost of everything from gas to groceries to local taxes get higher. Cable companies are thinking of charging for their online content, nabbing another piece of our monthly budgets.

So is this really the best time to start charging for online news? No. The best time was back in 1994, when the Web made online publishing to the masses a snap. And now that newspapers are finally making the move, they're applying a 1994 solution to the 2009 Web. Today, online publishers are seeing more and more traffic coming through blogs, aggregators like Google News, and social sites like Facebook and Twitter. Ignoring them is even more perilous to a paper's image than it was two years ago, when the New York Times tore down its Times Select pay walls. The hypertext link that made the Web unique is even more powerful today, and pay walls that break those links send would-be readers a clear message: Don't bother.

The most embarrassing part of all this is that newspapers are in the business of knowing what's going on in the world. Their mandate is to see big changes like the Internet coming. But even as many news pages bloomed with stories of dot-com IPOs and kooky Internet trends, most newsrooms themselves treated their Web sites as low-rent annexes. There was no exploration of the Web's potential as a publishing platform, no sense of curiosity that, each year, more and more of their readers were sharing. The core of the business was the print product, which was making lots of money. Until, of course, it stopped making so much.

Diller is right that the next few years will be chaotic ones for online content. Business models will evolve quickly. But it's unlikely the solution will be one that everyone uniformly rejected a decade ago. More likely is some new model, such as one that Ad Age columnist Simon Dumenco imagined: As hardware devices grow ever cheaper, they will start bundling media subscriptions as PCs used to bundle software. "Consumer-hardware companies increasingly have to become media companies, and vice versa," he wrote. "Hardware makers may have no choice but to turn their internet devices into multi-tier-subscription-based media machines." New business models that tap into emerging trends, rather than those trying to resuscitate trends long since gone, will fund journalists' salaries in the future.

For the sake of argument, let's say that news sites are routinely charging readers in five years. By then, the economy may be substantially healthier than now, and advertisers will be looking for sites with large, loyal readerships to sell their ads on. But that won't include newspapers. They'll be catering to that 10 percent of their online audience willing to subscribe. The rest of the Web will have long stopped linking to—and talking about—their stories. The dollars will flow right past the newspapers' pay walls. And then they'll really be sorry.