Pricing models are in the air. A new book called Cheap by Ellen Ruppel Shell argues that modern American consumers have duped themselves into a bargain-hunting haze and lost touch with the true price and the true value of things. I was invited by Ed Champion to join a roundtable discussion of this book, and we wasted no time getting down and dirty in this discussion. I turn out to be one of the naysayers in the group, as you’ll see if you check out this lively conversation. But I’m glad I was exposed to Ruppel Shell’s book. Questions of price and value clearly touch on emotions that cut deeper than any blue light special at K-Mart.

As did my post yesterday about the possibility that the New York Times may begin charging for web access. I wrote that I would stop reading and writing about the New York Times if they began restricting their content to paying subscribers — a perfectly reasonable stance, I think, since there is plenty of excellent content out there that is openly available to readers around the world which I can read and write about instead.

But I got a strong negative reaction to this statement (via comments, twitter and email), and am honestly surprised to discover that many of my own friends are excited that the New York Times might pioneer a new payment framework for web articles. One reason, of course, is that these people are not only readers but are writers or publishing professionals themselves, and therefore don’t like the “free” model for online content any more than the New York Times does.

There’s a lot to be said on this topic. Today, I’d just like to respond to a few things I’ve heard, and explain my side of this debate better. Here’s what a few of you have said, and what I’d like to say back:

Why aren’t you willing to pay for the New York Times?

I am very, very willing to pay for the New York Times. I already pay about $35 a month to get the print edition delivered to my doorstep every morning.

I never said I wasn’t willing to pay for the New York Times, or even that I wouldn’t be willing to pay more to help the New York Times survive. I’d happily pay $5 a month more if I felt it would help anything. But I don’t.

I believe the decision to put NYTimes.com behind a payment wall would be a bad and short-sighted decision. The New York Times should consider itself to be in the global news business, but this move would marginalize it to the world outside of its own subscriber base. Becoming unavailable to the worldwide community of readers would irreparably harm the paper’s position as the most widely referenced American newspaper. It would be the beginning of a slow and painful nose-dive into global irrelevance, because other newspapers would certainly move in to take the Times’s place. This is why I’m against the proposed payment plan — it has nothing to do with my own willingness to pay $5 a month.

Advertising alone cannot support an expensive operation like the New York Times.

Nonsense. Nonsense, nonsense, nonsense. If this were true, the New York Times would have folded in 1895, because the Times has always made more money on advertising than on newsstand sales and subscriptions. So do almost all newspapers and magazines.

I may have mentioned it elsewhere that from 1995 to 1998 I was manager of advertising technology at Time Inc. New Media, which ran websites for Time, People, Sports Illustrated, Life and Fortune. I worked closely with the advertising department and learned a lot, including the fact that every Time Inc. magazine makes more money on advertising than on sales. So do most other magazines, and so does the New York Times and pretty much every newspaper.

You can’t support excellent content solely through advertising? Somebody better warn the television industry, and the radio industry too. They’ve somehow managed to thrive all these decades.

It’s a simple fact: advertising is big money. The reason the New York Times is suffering now is that they haven’t yet figured out how to sell ads online (where they regularly get their ass kicked by Google, which has figured out how). Another reason is that there’s a big recession going on, and ad sales is down. That’s why a decision to put NYTimes.com behind a payment wall is short-sighted: as soon as the economy picks up again, the Times is going to want those pageviews back. I guarantee it.

(And, again, I been around this online ad sales industry a while. They will want those pageviews back — I guarantee it).

Instead of convincing newspaper readers to pay to access the website (a hard sell, except apparently to my friends and a few other eager New Yorkers), the Times should be bringing their advertising strategy into the 21st Century (hint: figure out which publishers are selling ads online, and learn from them). They should also be convincing their investors and potential investors of the long-term revenue potential for the most trusted journalistic source in America. The long-term potential is enormous, and that’s why a retreat behind a payment wall would be such a shame.

The problem with private/dedicated payment plans is mechanical. We need a payment system that works.

This I agree with. Putting the Times behind a payment wall is clearly a desperation move, and a diversionary tactic. The numbers just don’t add up — this idea will not bring in enough revenue to equal a healthy online sales operation.

However, here’s the kind of idea that might work: figure out a way people can pay $10 a month or $20 a month and get privileged levels of online access for every major newspaper in the world. Some consortium or third party provider should then need to figure out how to chop that money up and dole it out correctly to the individual publishers. This is a formula — the cable TV model — that could actually work. I’d pay up, why not? Make it easy for us, and we’ll be in.

But even if this does happen, guess what? The $10/$20 splits won’t support the New York Times and the Los Angeles Times and the Washington Post. They’ll still need advertising revenue to survive, just like they always did.

Advertising has supported some of the most innovative entertainment and publishing of the last 100 years. That’s the funny truth about all this faddish talk about “free” as an innovative new content model: free has been around all our lives. It was “free” that made Lucille Ball and Elvis Presley and Walter Cronkite and the Beatles and Bill Cosby and Michael Jackson and Jerry Seinfeld. As far as content/publishing goes, there’s nothing new about “free”. It’s what always made the world go around.