Last week, CJR released a new report by the Columbia University Graduate School of Journalism and the Tow Center for Digital Journalism, entitled “The Story So Far: What we know about the business of journalism.” To supplement Chapter Five, which focuses on paywalls, assistant editor Lauren Kirchner spoke with media market analyst Douglas Arthur, managing director at Evercore. This is an edited transcript of that conversation.

Chapter Five of this report starts with two quotes: one is the famous Stewart Brand “information wants to be free” quote, and the other one is this quote from John Lanchester in the London Review of Books last year: “The Internet is the most effective means of giving stuff away for free that humanity has ever devised. Actually making money from it is not just hard, it may be fundamentally opposed to the character and momentum of the net.” What do you think of that, particularly that second idea?

I totally agree with that. I think that the facts prove that it is an undeniable part of the Internet culture, that you can get anything you want at the click of a mouse—and you don’t expect to see advertising, and you sure as hell don’t expect to pay for it. And if you have to pay for it, you go elsewhere! The irony to me is that a lot of these monthly subscriptions to great newspaper and magazine products are less than the cost of getting lunch in midtown during the business day. Yet people are freaking out that they have to pay for it. That’s just an indication that we’ve raised a generation of Internet consumers who expect everything to be always on, always there, at a click of a mouse, period—frictionless.

Right. And it seems like it’s especially difficult when something starts out as free, and establishes itself as free for many years—something like The New York Times website—and then goes behind a wall. As opposed to some other service that has always cost money since it launched—like Netflix, for instance. What do you make of the criticism of the Times’s transition from all-free to their metered plan? Will all the blowback from their readers be worth it in the end, for the potential added revenue?

That’s the great unknown. As you said, it’s been free for a decade, and now they’re trying to extract subscription revenues out of it, so they’re trying to change their approach in mid-stream. In terms of the execution, personally, I think it was too complicated. You’ve got to keep it very simple. People may not like it, but if there’s not a lot of levels and price points and triggers, then at least they’ll understand it. And I think the Times, in my view, made it too complicated. It should have been one price fits all. But I thought the pricing at the low end—fifteen dollars for four weeks of web access—was very reasonable. It was lower than I thought it would be; I thought it would be twenty bucks.

One of the ironies of this whole thing is, people have Kindles and Nooks. All of the publishers have been charging for access to their products on those for a year now. And the adoption rates, I think, have been very good. I get the Wall Street Journal, I get The Washington Post, I get the Times on my Kindle, and I’ve been paying anything from nine bucks to twenty bucks for those, and I didn’t think twice about it. Then, all of the sudden, you’re presented with this Internet access—which in theory has a lot more bells and whistles to it in terms of graphics and audio and video—and people are outraged. Because it was Amazon, because people are used to paying for things there—I mean, people spend hundreds of dollars on Amazon downloading books without thinking twice about it. So it’s a cultural issue, and it takes time to turn around.

What’s your prediction for the Times and others who adopt a metered approach?

Lauren Kirchner is a freelance writer covering digital security for CJR. Find her on Twitter at @lkirchner