Photo: (left to right) Chris Anderson, Gary Hoenig, John Sargent, Alan Murray

Last night's discussion, Free AND Paid Content: Business Models That Work, hinged on whether consumers of news and books should and will pay for content online. But it became a tense intellectual slugging match between John Sargent, CEO of Macmillan Publishing, and moderator Chris Anderson, most recently the author of "Free: The Future of a Radical Price."

"We have not grown up in an atmosphere of free books" -- Sargent

Anderson contended that free digital copies could bring books back into the "cultural conversation," while Sargent held steady as the consistent voice of dissent, expressing a grim forecast for the publishing industry and noting that it's "hard to imagine books as a growth business." Not even "freemiums" will work, Sargent said, warning of the "danger of the experimental stage," in which giving away free books may increase sales the first year and even the second, only to see them disappear completely long-term. "It's early," he said. "We need a device or two and we definitely need a new screen."

Anderson and Sargent were joined by panelists Gary Hoenig, ESPN Publishing's general manager and editorial director, and Alan Murray, deputy managing editor and executive online editor of the Wall Street Journal, each of whom provided moderate voices amid Anderson's proselytizing and Sargent's foreboding.

Anderson moderated the panel hosted in the Condé Nast building where he works as editor-in-chief of Wired. As the group's ostensible mediator, he served more as an antagonist to the three panelists, especially Sargent, highlighting the fact that all are generals in a war that seeks to have readers pay for a product that, in many cases, they can get for free.

The panel, organized by New York University's School of Continuing and Professional Studies Center for Publishing, was commanded by a confident and loquacious Anderson, who began by summarizing the main tenets of "Free" (which he said should really be titled "Freemium") -- describing a new economy in a digital world in which "you give away 90 percent to sell 10 percent."

Anderson charged that each of the panelists, himself included, were "beneficiaries of a 20th century oligopoly" and should welcome change, citing this "very traumatic period" as a time to learn humility.

"What the Internet did is ruin our party," he said, before wondering "why people feel so threatened" by free content -- "something that seems so natural." The old model beget a "general disregard for the reader," he said, confessing, "I have no idea what the reader wants -- I don't even know who the reader is."

"Elitism is just not going to fly," ESPN's Hoenig offered.

"What is the content that you produce that [readers] can't get any place else?" Murray asked.

From there, Anderson said, "Everything we're talking about is up-selling" -- i.e. charging the customer for upgrades or add-ons.

Hoenig concurred: he has more than doubled his Web site's subscriptions simply by "improving the quality of the content," while Murray, citing the Journal's robust business coverage, called the panel's central question of whether people will pay "silly." Of course they will, he said.

The problem, according to Murray, is that newspapers prematurely decided they would give away content over a decade ago. Readers got used to reading their papers for free online, thus "devaluing their own content."

Though the panel's expertise weighed toward magazines and newspapers, Hoenig eventually suggested that this period of struggle was merely an opportunity to publish better books, with Anderson adding that maybe the entire concept of a book should be re-imagined -- not unlike what the recording industry did by selling individual songs on iTunes instead of entire albums.

And though Anderson's optimism toward "free" has yet to reveal itself quantifiably over time, it was hard to entrust the future of book publishing to Sargent, a man who ended the panel by deriding his own technological savvy, divulging, "I don't carry a cellphone -- I'm a long way from Twitter."

--by Joe Coscarelli

Related: Wired's Anderson: The Free Vs. Paid Debate Is Misunderstood