Here’s another story of a newspaper making the grave mistake for charging for news content online. We’ve addressed this issue time and again on this blog – most people will not pay for news online when there are thousands of resources giving away content for free!

Of course, some won’t listen and instead follow Rupert Murdoch’s silly advice, but with more horror stories like this most will finally get the message. If one wants to sell a traditional newspaper subscription, of course you make that a viable business. Just cut some of the ridiculous costs you’ve built up over the years. You might even be able to entice them with special features or services available online only to subscribers. But, don’t be foolish and expect to turn your entire news operation into an online subscription model. Free content is here to stay.

The pay wall argument heated up again at The Paley Center for Media.

The big debate over pay walls is getting down to the fine points; as opposed to grand theological, existential questions, it’s really more of a sharper dispute over the method of getting users to pay. Do you dangle carrots and hope the support follows? Or brandish a stick—perhaps a variety of sticks of different lengths? The debate played along those lines at the Paley Center on Tuesday, with the make ‘em pay side represented by Steve Brill, co-founder of startup Journalism Online, which promises to help news outlets charge for their content, and Vivian Schiller, president and CEO of non-profit NPR, arguing for making pay optional.

The most vocal panelists—the group included Buzzmachine’s Jeff Jarvis and media consultant Shelly Palmer—backed up Schiller’s contention that having a formal pay wall will only drive consumers away. In defense of the pay model, Brill contended that businesses need to run on direct money, and advertising and promotions won’t keep the lights on. Plus, he and others dismissed softer measures of coaxing money through online tip jars as being hard to count on.

Developing the pay habit: People have been exchanging cash for newspapers and magazines for decades, they just need to get back into the habit of doing so online, Brill said. In a conversation after the panel, Brill told me that the pay wall isn’t the only way to achieve that: “We believe in giving publishers a variety of options, including donations and bundling online and print. But some have this religious idea that people will be offended if you try to get them to pay for the news product. I’m just asking, ‘Who really knows?’”

“Who really knows?” Is that the best he can do? He’s trying to turn upside down a revolution in news, information and communication and he’s saying that? The debate at this point is beyond stupid.

Users are used to getting things free, but that’s only part of the reason why this will never work. Bloggers and other journalists are now used to DELIVERING the content for free. Look at a small outfit like Talking Points Memo. The quality of the content is better than that of most newspapers, and they’re growing, even in this crappy environment, and the news is free.

You can’t hide news behind a pay wall because there will also be thousands of free sources. Newspapers could charge in the past because they were the only game in town. Those days are over!

Regarding opinion pieces, your opinion no longer matters if nobody hears it or reads it. Paul Krugman has become exponentially more influential after the Times got rid of the ridiculous pay wall. The instant Krugman writes something now about health care or the economy, bloggers and news sites all over the world are linking to it. Aspiring writers and bloggers are doing everything possible to get noticed and to get LINKED. That’s how the world works now.

Newspapers have so many problems that have nothing to do with the pay model. Their costs structures are completely whacked, and yet you had supposedly smart people dumping piles of money for these dinosaurs just a couple of years ago.

If newspapers and magazines want to charge for something, they need to charge for services and delivery. Let the whole world log on to the web and see your content. Encourage everyone to link it and make it popular as hell. But, if I want the paper version, or if I want a subscription that is sent to my Kindle or any other device in a way that lets me easily read the content whether I’m online or not, then you can charge me. And guess what – I, along with most people who value news and opinion and other good content, will gladly pay for the convenience. I’d be thrilled to have all my magazine subscriptions sent to me electronically so that I don’t have to collect all my magazines before I go on to a plane. Just like books, magazines can be a hassle. Make it easy for me to consume your product, and I’ll pay for that luxury. Imagine the cool ads and sponsorship messages that can be embedded in a magazine designed for an e-book or similar devices.

paidContent.org has this very interesting story.

Need more proof that we’re witnessing the beginning of the e-book boom? It appears that the Kindle version of The Lost Symbol, the latest thriller from The Da Vinci Code author Dan Brown, is out-selling the hardcover version on Amazon (NSDQ: AMZN). Kindle Nation Daily first noticed first noticed the trend by analyzing the category sales rankings on Amazon; the $9.99 Kindle version of the book is currently more popular than the hardcover version, which is retailing for $16.17.

Everything is changing VERY quickly. As more and more people get comfortable getting all their news and reading material on devices instead of paper, we’ll see an acceleration of the trend.

Publishers of magazines and newspapers need to pay attention here. Instead of wasting time wondering how to charge for online content, start thinking about ways to offer PREMIUM DELIVERY options that one can charge for.

I love to read the New York Times online or on my Blackberry, and that should be free. It’s news, and the Times wants to be a leader there, and you can’t maintain leadership if you hide behind a pay wall. On the other hand, I’d pay a small subscription fee to have the Times or may favorite magazines sent to my Kindle in an organized, readable format. This way I can read it at my leisure, regardless of whether I have an Internet connection.

Facebook has announced that it is now cash-flow positive, and than it recently reached the 300 million member threshold. That’s a pretty stunning number.

Again, the free service model is a winner on the web.

Mint.com offers free online tools to manage your money, and it’s been a huge success. Intuit decided to pull the trigger and buy it.

Intuit is buying Mint.com for $170 million in cash, in a deal that gives it control of a startup that had disrupted its dominance in personal money management software with a free online alternative. Intuit, which sells Quicken, and Mint had been in a tight race in the online personal finance market, with both companies claiming more than one million active users of their online products. Last fall, Intuit dropped the $2.99 a month subscription fee that it was charging for Quicken Online, partly in order to better compete with Mint. Intuit says it will now offer both services separately, although it says Mint will be the “primary online personal finance management service” it will offer to consumers.

Both sites make money by referring users to financial services like credit cards and credit counseling services. I guess the free service model still works!