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Newspaper honor boxes outside the Providence train station in 1997.

The Freakonomics Blog at NYTimes.com solicits answers from people who have given a lot of thought to this question What Would Micropayments Do for Journalism?

Clay Shirky, there described as "an adjunct professor in N.Y.U.'s graduate Interactive Telecommunications program and a digital media consultant in New York," nails it, as far as I'm concerned:

Online, small payments only work when the collector of those payments has end-to-end control of delivery, generally by controlling the hardware or software the user has access to. (This is true of all metered billing, in fact.) Whether it's long-distance rates, iTunes purchases, or in-world currencies for online games, the core attribute of successful systems is the ability to prevent the users from expressing their preference not to be nickel and dimed.

Put another way, the fantasy that small payments will save publishers as they move online is really a fantasy that monopoly pricing power can be re-established over we users. Invoking the magic word "micropayments" is thus grabbing the wrong end of the stick; if online publishers had that kind of pricing power, micropayments wouldn't be necessary. And since they don't have that pricing power, micropayments won't provide it.

To a first approximation, articles will be priced at free (which is only to say that what seems to be happening online is what's actually happening). This is because the competitive loss of hiding them behind a paywall reduces the users' ability to share them with friends, and it is this secondary distribution that creates the most important new opportunities online.

Users like sharing. We like it so much, in fact, that we are willing to reward amateur outlets that enable it at the expense of professional ones that forbid it. (This is how Wikipedia rather than Britannica became the English-speaking world's encyclopedia of choice.) This strong preference for sharing in turn means that nickel and diming us not only raises the cost of a piece of content, it sharply lowers the value as well, because payment systems have to forbid such sharing in order to function.

This in turn opens the door to publishers who reward sharing rather than fight it, which creates the competitive pressure that destroys small payment regimes.

Applying micropayments to the majority of online content isn't possible, because it's not possible to establish a monopoly on news. Unlike iTunes, for example, which benefits from a legal regime designed to prevent sharing, discussion of events in the real world can't be kept from circulation. (You can only stonewall things that are on your side of the wall.)

Newspapers used to brag to advertisers that every paid copy was seen by 3.6 readers. (The number varied, of course.) The copy on the lunch counter, left on the bus, at the bar, in a waiting room upped the totals. Making each family member, patron of the lunch counter, bus, bar and doctor pay to read the same online paper -- never mind the same story, or just the comics or obits -- is a little silly. Yet online micropayments would work that way.

YouTube thrives because people can easily embed videos into their own blogs, link to them and send them to friends. It's the antithesis of, "This is mine and you can't see it unless you ante up."

I'd much rather see news sites move toward advertisements for specific products you can purchase online through a link that leads to the advertiser's shopping cart. The referring news site would earn a portion of the purchase price: Passive revenue, painless to the reader, automatic to the news org.

 Tags  news business

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