Internet firms fish for revenue from fees: "There are plenty of reasons to view company and market research claims with skepticism. In the Internet bubble, investors sent Internet stocks to the stratosphere. Helping fuel the fervor: inflated expectations of Wall Street analysts and market researchers."

Thanks to Robert Loch for sending this article, whose main point is that online subscriptions face reluctance and are not necessarily a panacea. I'm the first to say that there's only so much online content and services people will agree to pay for on a recurring basis. And I wrote in the past that those sites which handle subscriptions as "the new banner ads" are bound to fail.

But this is only half of the story. For one, online fees are not necessarily collected through subscriptions, so resistance to yet another monthly bill won't necessarily prevent online ventures from charging for their services (e.g. with one-time payments on a pay-per-use basis.)

More importantly, it seems the dozens of niche fee-based sites out there are not on the radar of most commentators yet, though you might argue that the media and some analysts have eyes only for big business and so-called "leaders." Being in the business of writing about "billions of dollars" doesn't help, but there are only a few companies that care about "billions of dollars." Even Yahoo or MSN don't make a billion dollars in yearly revenue. But there must be something unsexy, if not downright offensive with small and medium businesses (don't even mention mom-and-pop, oh the horror!)

Anyway, whatever the cause of this myopia, there certainly are misplaced expectations here. The analogy with cable TV is only so good because costs of entry are lower online, and potential reach is larger. In other words 400 TV channels look tiny to a million web sites. Look at fantasy sports as a niche where paying sites don't need hundreds of thousands of customers to break even.

There's simply no such thing as a generic "Internet consumer." What will help most fee-based online services succeed is their ability to target and adapt their offerings beyond what's possible offline. And if it's good and unique, people will forget about the free boring stuff and gladly pay. I'm not saying that everything free is boring by the way, but that compelling paying online content and applications will naturally find a market if they don't face free competition of a similar quality level. Please tell BMW of Manhattan that you'll start giving away Ladas to affluent New Yorkers and call me back if they look afraid (I recently went to NY and I've never seen such a concentration of X5s.)

OK, so now I have a bunch of revealing secrets for you, and I'll throw you them all at once in full rant mode so get ready for a shock. There's an Internet service which has been hugely successful with fees for years and it's called eBay, and what it means it that the Internet is not TV, and if you still don't get it in 2002, it's going to get hard for you to keep doing business with the instant messaging generation, because IM multitasking is not teaching them patience with the slow-of-understanding.

The biggest sites might have trouble reaching their huge financial goals through online fees, and starting that transition with bland undifferentiated services doesn't help. For all we know, Yahoo might give up producing fee services by themselves but instead produce and/or distribute work done by other companies. Even if the big players eventually fail, that wouldn't disparage fee-based business models as a whole. This very idea seems ludicrous to me, as we have to pay for pretty much everything else that we consume. Sure, there's always network TV if you don't mind giving away your own free time to advertisers. Aside from that (hardly costless if you count the lost IQ points,) where are the free milk, taxi rides and shoes?

The illusion of a given right to a free-for-all (as in beer) Internet is already fading, because unlike oxygen, someone had to pay for it. Meanwhile, the ability to reach out and satisfy customers through the Internet is not going anywhere. And if I'm proved wrong in the next two or three years, I can always print out this post and eat it!