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Free web content coming to an end? Don't hold your breath

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Barry Diller, chairman and CEO of IAC/InterActiveCorp, created a stir last Friday when he said Web users will have to pay for what they watch and use. Diller, whose company runs the search engine and dating service (he is also the chairman of Expedia Inc. and Ticketmaster Entertainment Inc.), is the latest media mogul to predict the era of free Internet content is ending.

According to published reports, Diller said, it’s “mythology” to view the Internet as a system of free communication while speaking at the Fortune Brainstorm forum. “It is not free and it is not going to be.”

It’s no secret that media companies are working tirelessly to develop effective ways to get consumers to pay for content they access online – there just haven’t been many successful models to follow, and it’s hard to be the first in a market to attempt to charge for content – do that and users will flock to free competitors.

Media companies like Disney see an online future with three revenue streams: Advertising, subscriptions and transactions. Only the first is currently producing at a rate that matters, but a great deal of effort is being expended to change that. The New York Times is reportedly considering charging consumers $5 per month for access to its Web site (or $2.50 for newspaper subscribers). That’s really very reasonable, but still a tough sell when consumers expect free access. When the Rocky Mountain News closed earlier this year in Denver, a group of laid-off journalists completely overestimated how many former Rocky readers would pay for a subscription to a new online newspaper – they received only a fraction of the commitments needed to make it anywhere near sustainable.

Everyone is trying to figure out an efficient way to get users to feel comfortable with online micropayments, a la iTunes, where millions have happily used credit cards to download songs online for typically 99 cents per tune.

I have no doubt that over time, more and more online content will be paid for by users. But I also suspect that it will happen at a rate slower than health care reform – so don’t hold your breath.

As for Life Insurance Selling, visitors to our newly redesigned Web site can expect to continue to enjoy and benefit from our wealth of online content without charge for the foreseeable future. As an advertiser-supported brand with a controlled-circulation magazine, our advertisers want to be sure their messages are being viewed by qualified prospects. We’re updating our site every weekday with the latest insurance industry news and Web-exclusive features, and you can always find articles from the magazine on the site.

So keep visiting, and keep your credit card in your wallet.