I was recently reading a comment from Barry Diller and I thought dude you are such a twit that it is not even funny.

“It is not free, and is not going to be,” Diller said today at the Fortune Brainstorm conference in Pasadena, California. In addition to IAC, he is chairman of Expedia Inc., the online travel service, and Ticketmaster Entertainment Inc.

Diller, 67, joined a group of media chiefs, from Liberty Media Corp.’s John Malone to Walt Disney Co. CEO Robert Iger, who are challenging the accepted model that consumers pay for Internet access and then content is free. Diller predicted there will be three revenue streams: advertising, subscriptions and transactions.

But Diller is not the only twit, included is Sir Royal Twitness is Murdoch!

Media giant News Corporation Ltd intends to charge for all its news websites in a bid to lift revenues, as the transition towards online media permanently changes the advertising landscape.

News Corp chairman Rupert Murdoch told analysts in a conference call after News Corp released its full-year results that the traditional newspaper business model has to change.

"The digital revolution has opened many new and inexpensive methods of distribution," Mr Murdoch said.

"But it has not made content free. Accordingly we intend to charge for all our news websites," he said.

Up until recently I could not come up with any real evidence that these two VERY OLD blowhards who should be retired were wrong. But today I read what should be a warning shot that should not make them sit up straight.

The music industry’s deathwatch kicked off about a decade ago, but it seems the vigil could soon be over.

…

First, piracy punched a big hole in it. Now music streaming — music available on demand over the Internet, free and legal — is poised to seal the deal.

The problem is that if people can get the music they want for free, why would they ever buy it, or even steal it? They won’t. According to a March study by the NPD Group, a market research group for the entertainment industry, 13- to 17-year-olds “acquired 19 percent less music in 2008 than they did in 2007.” CD sales among these teenagers were down 26 percent and digital purchases were down 13 percent.

What the New York Times article was referencing is a finding that teenagers are NOT PAYING for music and they are not STEALING…  This is a very worrisome trend because it means that the music industry has just lost a revenue stream. And these teenagers will grow up and just keep on doing what they have been used to doing when they were young.

What should make everybody sit up is that music was the first industry to get the pitchforks from the Internet. From a personal perspective I have seen this trend sweep across the entire business spectrum. I was in the software industry when Open Source began making inroads into the software industry. I was writing books before and after Google came to the scene. Both Open Source and Google have destroyed my business models. I used to make half decent money with closed source software and writing books. Now those models are DESTROYED! There is not even a niche business model.

Am I angry? Am I annoyed? Am I irritated that I write these blogs for free? NO… To understand the world you don’t fight it, it is what it is and you have to make your peace with it. But of course Diller and Murdoch are used to controlling the news space and hence think they can do what they think is right. Guess what Diller, and Murdoch, YOU’RE WRONG.

What does this mean for the future? Quick answer, content will remain free. If you plan on charging content you will not succeed. I see it with the Wall Street Journal. They now only give you a snippet and ask you to register for the full article. I don’t register and plan on ignoring the Wall Street Journal. What the Wall Street Journal does not understand is that there are other places to get information.

About eight, maybe ten years ago I saw a very interesting business model from Google that quickly died. Or maybe it was killed off on purpose?

The idea was as follows. Instead of having newspapers like Wall Street Journal, you had a search engine. And what you did is broadcast news locally using your phone camera, or camera. Those broadcast news would be managed by Google, and Google would pay you money for your snippets. Your payment is determined by the number of people who look at your news. The news service itself would probably be a charge. But what is stunning with this is that there would be world wide reporters RIGHT AT THE SCENE.

Imagine for the moment, that bloggers captured the demonstrations in Iran? Who would people flock to? CNN reporting from remote? Or the local bloggers with phone camera pictures? Answer, local! Why this idea died I have no idea, maybe the news sites like Murdoch did not want competition. Though, I know one thing, if Murdoch, and Diller plan on charging for their sites then news.google.com will dramatically change. And the winner will not be Murdoch or Diller, but Google!

Murdoch, Diller you are playing with fire and you will loose.