By Denise Ross

Sadly, someone with the resources of Leo Hindery Jr. is going to blow his wad on a hapless and hopeless scheme to start charging fees to read news online. There’s just one problem: People won’t pay.

Former Colorado cable TV executive and investor Leo Hindery Jr. is one of three principals in Journalism Online LLC, a national venture announced Tuesday to help newspapers and magazines collect revenue for online content.

Online news leaks through a much looser seive than did music in the hey-day of Napster-ish file-sharing. (And we all know how well that is still working out for the old school music recording industry.) There is only one version of Brittany’s “Oops … I Did it Again,” while there are typically multiple versions of coverage of any given news event. Plus consuming news is arguably a much more transient experience than assembling a soundtrack for one’s life.

It is perhaps the difference between the paper cup from which you drink your morning coffee and your old favorite nickel night beer mug from college (Go Jacks!) or, for those very special songs, the family china. Nickel night mug = treasured memories and maintains a place among your possessions for years. The family china, you’d spend a good chunk of time and money just to replace a missing or broken piece.

But the paper coffee cup is merely a vehicle for a temporary, albeit vital, daily habit. Many a paper cup functions as well as the next, and if your barrista started charging for the cup, you might very well find another coffee shop if the coffee were comparable.

Hindery & Co. appear intent on building walls around content and then charging folks to get through the bouncer-guarded gate. Appealing. Here’s a bullet list from a Denver Busines Journal report about Hindery’s plan to help news organizations make online pay:

• A password-protected website that will offer access to content online for a fee.
• All-inclusive annual or monthly subscriptions allowing access to all member publishers’ content, with revenues shared among publishers.
• Negotiating wholesale licensing and royalty fees with Web portals and search engines.
• Advise member publishers on how to maximize online traffic and advertising revenue.

Even the vaunted and unique New York Times columnists of the famously defunct Times Select couldn’t inspire enough toll-payers to make that walled garden grow.

The underlying problem with this approach is a failure to recognize the change from what Jeff Jarvis astutely calls the old news economy of scarcity to the new news economy of ubiquity. Jarvis has a post on this up now, calling Journalism Online LLC an effort at “a content cartel … to create a company to enable news companies to huddle behind a wall and charge for their content.”

 After saying that the company “will be to negotiate wholesale licensing and royalty fees with intermediaries such as search engines and other websites that currently base much of their business models on referrals of readers to the original content on newspaper, magazine and online news websites” it adds that its hired guns include attorneys David Boies and Theodore B. Olson.

I’d also turn that sentence around: It’s the online news sites that base much of their business models on referrals of readers from search engines and other web sites.

In the scarcity economy, news companies could charge and they did. But that dog doesn’t hunt any more. As news executives must increasingly face the likliehood of withering and dying on the vine, panic is setting in. We’re already seeing more efforts like Journalism Online LLC. The Associated Press, an outfit that exists by essentially charging dues to the dying MSM outlets, is announcing that it will be going increasingly on the offensive, looking for excuses to loose the lawyers in the name of copyright infringement.

AP’s CEO recently appeared on Charlie Rose - where Arianna Huffington ate his lunch - and said that the AP intends to “put a beacon” on its content as it spreads across the web so that AP can be sure it’s charging every outlet that so much as repeats a headline. Arianna talked about honoring and embracing “the link economy.” If someone thinks they’ll incur legal fees for linking to an AP story … well, this puzzle isn’t hard to put together.

The icing on this cake comes in AP loosing its lawyers on one of its own affiliates, threatening this affiliate for using AP content. (I swear it’s true.) Read it all here.

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