Micropayments are the future of content! If I had a nickel for every time I heard that one. Walter Isaacson, a former managing editor of Time, is the latest to pick up this tired banner.

In Time's latest cover story — which you can read without charge on the World Wide Web — Isaacson writes that publications cannot rely on advertising revenues alone, and should get their readers to pay per article instead:

A person who wants one day's edition of a newspaper or is enticed by a link to an interesting article is rarely going to go through the cost and hassle of signing up for a subscription under today's clunky payment systems. The key to attracting online revenue, I think, is to come up with an iTunes-easy method of micropayment.

We ought to cheer the notion that publications will try to start charging for content online. Writers at ad-supported publications will pay the fees and deliver crisp summaries and analysis for free. Outlets which charge will end up reduced to the business of trade publications, which only manage to extract money from people who need the information for their job.

That's pretty much what Time did in its early years, when it was a fancy printed blog. Editors there subscribed to the New York Times and other papers, and wrote up a weekly digest, which Time's founder, Henry Luce, then sold for rather less money than one would pay at the newsstand for all their sources.

But we have to wonder where Isaacson got this idea? Here's a hint: In 1995, Josh Quittner, whom Isaacson had hired the year before, wrote an essay about "Way New Journalism" for the online arm of Wired. Quittner wrote:

Nearly two-thirds of the cost of putting out a newspaper or magazine is the cost of printing it (paper, ink, printing presses) and distributing it (trucks, delivery folks, mail). Uncouple the content from the production and distribution costs, and you see the kind of cash we're dealing with here. Introduce the possibility that by the end of the decade, 100 million people will be on the Net. Now, give those people the technical ability to pay 3 cents for each and every story they read. If only 1 million people read, say, one Time story on O.J. Simpson, that's US$30,000. Pretty soon, you're talking about real money.

When Quittner noted that the technical infrastructure for such micropayments was missing in 1995, it was true. When Wired repeated the claim a year later, it was still true. But when Isaacson mouths the verity in 2009, he makes a fool of himself. He writes that PayPal does not accept micropayments; in fact, it does. Amazon.com lets anyone build their own micropayments service using its billing engine. The existence of 99-cent iTunes songs and 10-cent text messages show that consumers are willing to pay small amounts for digital content.

The problem with micropayments is not technology. It's that consumers are fundamentally uninterested in paying per article. Isaacson dismisses the problem of "mental transaction costs," but it's quite real. It's almost impossible to determine the value of an article before you read it. And the amounts we're talking about — 3 cents? 5 cents? 10 cents? — aren't worth the time it takes to decide how much one is willing to pay.

The advocates of micropayments also forget the basic law of supply and demand. Editors today increasingly talk about "commodity news" — the numbingly same mass of articles written about the same news event, adding nothing to the reader's knowledge. Why would anyone pay for those? The snobs of print media also forget that they have long competed with free radio and television news broadcasts. The news will come out, one way or another. It's the classic vanity of writers to think that they have created the one perfect story that exceeds all others. The clear-minded statistics of Web usage quickly reveal this as a delusion.

Quittner (who, full disclosure, was my boss for six years at Time and Business 2.0 and talked about micopayments incessantly) was right to note the liberating effect of getting rid of the costs of print media. But he was wrong about how we'd pay for it.